Working capital or net working determine the operational efficiency and ability of the company to pay its short term obligation. The value of working capital is equal to current assets minus current liabilities as mentioned below.
Working Capital or Net Working Capital = Current Assets – Current Liabilities
Increase in working capital value show positive indication [...]
A quick ratio or acid ratio determine the company ability to meet its short term obligation by converting current assets into cash at short period of time of one month. The need of quick ratio arise to measure the liquidity of the company more accurately by eliminating the some current assets from current assets as [...]
The current ratio is very poplar liquidity ratio; it is used to determine the short term liquidity of the company means that enough current assets (Cash, prepaid Insurance, Cash equivalents, Account receivable and Inventory etc) are available with company to meet it short term liabilities obligations.
In other words current ratio determines the company ability to [...]
EBIT stands for “Earnings before interest and tax”; this term is a part of income statement indicates the earning including interest amount and tax. The other common term used for EBIT are operating profit and operating earnings.
EBIT Explaination
Let me explain the terms in EBIT in detail
Earning – Earning is the profit of organization
Interest – The [...]