How should I evaluate a company with negative cash flow investing activities?

June 30, 2024 No Comments

A: Cash flow from investing activities is one of the three sections of a company’s statement of cash flows. The cash flow statement is a financial statement that summarizes the amount of cash and cash equivalents entering and leaving a company. The cash flow statement (CFS) measures how well a company

How to calculate the inventory turnover ratio?

June 30, 2024 No Comments

A: Managing inventory levels is important for companies since it can show whether sales efforts are effective or whether costs are being controlled. The inventory turnover ratio is an important measure of how well a company generates sales from its inventory. What Is Inventory Inventory is the account of

I have lost my original Bills of Lading. Can I obtain a new set?

June 30, 2024 No Comments

A: If an original bill of lading is lost, destroyed or stolen, a new bill generally cannot be obtained unless the original has been found. Instead, the shipper must obtain an order by the court that directs the transport line or carrier to make delivery

I need a telex release for a Bill of Lading. What must I do to obtain it?

June 30, 2024 No Comments

A: A telex release is typically issued by the freight carrier after all original copies of the bill of lading are surrendered. Some carriers require payment of all fees before the telex release is transmitted to the receiving agent. Shippers and forwarding agents can usually

If a company has a high debt to capital ratio, what else should I look at before investing?

June 30, 2024 No Comments

A: A variety of equity valuation metrics can be utilized to evaluate a company along with the debt to capital ratio to get a more complete picture of the company’s viability as an investment. The debt to equity ratio can be used as an alternative

In what types of financial situations would credit spread risk be applied instead of default risk?

June 30, 2024 No Comments

A: Default risk and spread risk are the two components of credit risk, which is a type of counterparty risk. Think of default risk as more closely associated with the general conception of counterparty risk: noncompliance with the specifications and terms of a contract. Spread

In which industries is Average Collection Period most important?

June 30, 2024 No Comments

A: The industries in which average collection period – the median amount of time necessary for a business to recover its receivables – is most important are those in which receivables make up the greatest portion of cash flows. These industries include banks and financial

Is a deficit in the balance of payments a bad thing?

June 30, 2024 No Comments

A: First, it’s important to distinguish between the balance of payments and the current account. When the terms “trade deficit” or “trade surplus” are used in media, they are almost always references to the current account. The current account is just one part of the

Is it possible for a company to have a positive cash flow and a negative net income?

June 30, 2024 No Comments

A: This situation may seem a bit counter-intuitive at first, but it is actually quite common and not too difficult to understand. Let’s break down the factors at play to examine more closely how a company can have a negative net income and a positive

How is market to market accounting different than historical cost accounting?

June 30, 2024 No Comments

A: Historical cost accounting and mark-to-market, or fair value, accounting are two methods used to record the price or value of an asset. Historical cost measures the value of the original cost of an asset, whereas mark to market measures the current market value of

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