Learn how to test quality of earnings with cash conversion, accruals, working capital, normalized profit, a worked example, and a quiz....
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8 Minutes
6 Minutes
Unit Economics: How to Know Whether Each Customer Really Creates Value
Unit economics shows whether each customer or transaction creates real value by connecting contribution margin, CAC, LTV, retention, and payback....
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3 Minutes
Payback period in investment: A Simple Guide
Payback Period: A Key Investment Metric In finance, the payback period tells you how long it takes for an investment to recover its initial cost using the cash it generates. It answers one practical...
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7 Minutes
Understanding Islamic Banking: Principles of Riba, Murabaha, Takaful, and Sukuk Explained
Islamic banking, a growing and dynamic financial system, adheres to the principles of Islamic Shariah, avoiding riba (usury) and other prohibited practices. It offers a range of financial products and services that align with...
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5 Minutes
Time Value of Money (TVM): Unveiling the Power of Future Dollars
Time Value of Money: Understanding the Essence of Financial Decisions The Time Value of Money (TVM) is a fundamental financial principle that highlights the idea that a dollar today is worth more than a...
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5 Minutes
Future Value of Money (FV): Predicting the Worth of Your Investments
Future Value of Money (FV): Unveiling the Growth of Your Investments The Future Value of Money (FV) represents the worth of an investment or a sum of money at a specific future date, considering...
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6 Minutes
How to calculate IRR | Internal Rate of Return Simplified
Understanding IRR: A Simple Guide to Internal Rate of Return Want to know if an investment is a good idea? Calculating the Internal Rate of Return (IRR) helps figure that out. The IRR (Internal...
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4 Minutes
Equivalent Annuity (EA) Simplified
The equivalent annuity is like finding the yearly cash flow that would match up to the value of a project or investment today. It's calculated by dividing the NPV (Net Present Value) by something...
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4 Minutes
Modified Internal Rate of Return (MIRR) Simplified
The Modified Internal Rate of Return (MIRR) is different because it looks at how cash comes in and goes out over time. It's like a smarter way to see if an investment will make...
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3 Minutes
Internal Rate Return (IRR) Simplified
The internal rate of return (IRR) is a capital budgeting technique that measures the discount rate at which the NPV of a project or investment is equal to zero. It is the rate of...
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4 Minutes
Profitability Index (IP) Simplified
The Profitability Index (PI) is like a report card for investments. It helps decide if an investment is a good deal or not by comparing how much money it might make with how much...
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2 Minutes
Net Present Value (NPV) Simplified
Net Present Value (NPV) is a way to figure out the value of money today, based on cash flows expected in the future. It helps in making smart decisions about investments or projects....
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9 Minutes
Capital Budgeting Techniques: Making Smarter Investment Choices
Unveiling the Dynamics of Capital Budgeting: Strategies, Formulas, and Calculations Capital budgeting involves the critical decisions companies make when investing in long-term projects or assets. Finantial ratios play a crucial role in guiding these...
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4 Minutes
Working Capital Turnover Ratio: It measures how efficiently a company manages its working capital to generate sales
The Working Capital Turnover Ratio shows how good a company is at using its money to make sales. It's like seeing how well a lemonade stand uses its lemons and sugar to sell lemonade....
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5 Minutes
Cash Ratio or Acid Test Ratio | Assessing Short-Term Financial Strength
The Cash Ratio helps figure out how much money a company has ready to pay its bills immediately. It's like checking if you have enough cash in your pocket to cover your costs right...
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5 Minutes
Return Ratios: Unveiling a Company’s Profitability and Efficiency
Return ratios provide valuable insights into a company's ability to generate profits, utilize its assets effectively, and manage its debt obligations. By analyzing return ratios, investors and analysts can make informed decisions about potential...
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4 Minutes
Coverage Ratios it assess a company’s ability to meet its financial obligations: debt payments, interest expenses, and dividend payments
Coverage Ratios The coverage ratios are financial metrics that evaluate a company’s ability to cover its expenses or obligations. These ratios help investors and stakeholders evaluate the financial health of a company, indicating its...
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9 Minutes
GAAP and IFRS | Differences Between IFRS and GAAP Accounting
GAAP and IFRS – Differences Between IFRS and GAAP Accounting International Financial Reporting Standards (IFRS: International Financial Reporting Standards) is an accounting method used in many countries around the world. It has several key...
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