Which is the most widely used liquidity ratio?
current ratio
How do you interpret a comparative income statement?
Interpretation: (a) The comparative income statement reveals that there has been increase in net sales of 25% while the cost of goods sold has increased disproportionately by 50% thereby resulting in a decrease of gross profit of 25%.
Why do we need to study comparative politics?
Comparativists (practitioners of comparative politics) seek to identify and understand the similarities and differences among political systems by breaking broad topics such as democracy or freedom down into the factors we find in individual systems.
What are the 3 liquidity ratios?
A liquidity ratio is a type of financial ratio used to determine a company’s ability to pay its short-term debt obligations. A company shows these on the. Three liquidity ratios are commonly used – the current ratio, quick ratio, and cash ratio.
What is the nature of comparative politics?
NATURE OF COMPARATIVE POLITICS: Comparative government includes the study of features and legal powers of political institutions existing in various states. It is the study of state and other political institutions in terms of their legal powers, functions, and positions on a comparative basis.
What is a bad current ratio?
A current ratio of above 1 indicates that the business has enough money in the short term to pay its obligations, while a current ratio below 1 suggests that the company may run into short-term liquidity issues.
What is the advantage of comparative balance sheet?
Advantages of Comparative Balance Sheet Comparison – It is effortless to compare the figures for the current year with the previous years because it gives both the year figures in one place. It also helps to analyze the figures of two or more companies or two or more subsidiaries of one company.
What are the main objectives of preparing comparative balance sheet?
Comparative balance sheets provide users with at least three periods of data from prior accounting periods. By helping to identify trends, they help to provide the context needed to make the most informed business decisions.
How do you analyze comparative income statement?
To find the percentage change, first calculate the dollar change between each period. Consider the following example of comparative income statement analysis. If you made $45,000 in 2015 and $50,000 in 2016, the dollar change is $5,000. Then, divide the dollar change by the base year profit.
Why comparative study is important?
1. Comparative studies try to clarify whether certain behaviour patterns are characteristic for a certain group or a certain culture or whether they are valid for humanity. 2. They offer help in the education of those who wish to work in other countries and other cultures.
What is the downside of holding too much cash?
Therefore, the major disadvantage of too much cash on hand is that it lowers the return on assets. Another disadvantage of too much cash on hand is that it increases the cost of capital. The excess cash might also make the management team complacent, which increases the risk of damaging the business value.
What is a good cash position?
A stable cash position is one that allows a company or other entity to cover its current liabilities with a combination of cash and liquid assets. However, when a company has a large cash position above and beyond its current liabilities, it is a powerful signal of financial strength.
Why comparative analysis is important?
More specifically, comparative analysis enhances the understanding of one’s own society by placing its familiar structures and routines against those of other systems (understanding); comparison heightens our awareness of other systems, cultures, and patterns of thinking and acting, thereby casting a fresh light on our …
What is the important of comparative politics?
Comparative politics is central to the development of political theory. Therefore, comparing what happens when different countries, for their own reasons, modify constitutions, or party systems, or whatever, provides useful informa- tion about the probable consequences of different political orders.
What is the meaning of comparative politics?
Comparative politics is the comparative study of other countries, citizens, different political units either in whole or in part, and analyzes the similarities and differences between those political units. Comparative politics also entails the political study of non-US political thought.
What is a good cash ratio?
Key Takeaways. The cash ratio is a liquidity ratio that measures a company’s ability to pay off short-term liabilities with highly liquid assets. There is no ideal figure, but a ratio of at least 0.5 to 1 is usually preferred.