What is the formula for calculating the inventory turnover ratio in Excel?

July 9, 2024 No Comments

A: The inventory turnover ratio is used in fundamental analysis to determine the amount of times a company sells and replaces its inventory over a fiscal period. The inventory turnover ratio compares a company’s sales and its inventory. To calculate a company’s inventory turnover, divide

What is the difference between the gearing ratio and the debt-to-equity ratio?

July 9, 2024 No Comments

A: Gearing ratios form a broad category of financial ratios of which the debt to equity ratio is the predominant example. Accountants, economists, investors, lenders and company executives all use gearing ratios to measure the relationship between owners’ equity and debt. You often see the

What is the difference between the S&P 500 and the Fortune 500?

July 9, 2024 No Comments

A: The Fortune 500 and the S&P 500 are different measures of companies in the United States, and they are compiled by two different companies. The Fortune 500 is an annual list of the 500 largest companies using the most recent revenue figures and includes

What is the difference between the standard error of means and standard deviation?

July 9, 2024 No Comments

A: The standard deviation, or SD, measures the amount of variability or dispersion for a subject set of data from the mean, while the standard error of the mean, or SEM, measures how far the sample mean of the data is likely to be from

What is the difference between work in progress (WIP) and raw materials in accounting?

July 9, 2024 No Comments

A: Raw materials and works in progress (WIP) are distinct categories in financial accounting for business inventory. Each applies to a different stage in the production process. The first stage in the production process involves gathering raw materials, or basics. When labor or other capital

What is the difference between work in progress and work in process?

July 9, 2024 No Comments

A: In general, the terms “work in progress” and “work in process” are used interchangeably to refer to products midway through the manufacturing or assembly process. Most commonly referred to as “work in progress,” it represents one of several production stages that must be carefully

What is the Directional Movement Index (DMI) formula and how is it calculated?

July 9, 2024 No Comments

A: Legendary trader and author J. Welles Wilder Jr. introduced the directional movement index, or DMI, in 1978. Wilder wanted an indicator that could measure the strength and direction of a price movement so traders could avoid false signals. The DMI is actually two different

What is the fixed asset turnover ratio and why is it important?

July 9, 2024 No Comments

A: The purpose of any business is, of course, to generate profit, so there are a variety of metrics that business owners and investors use to assess the efficiency of a company’s business model. While many popular metrics, such as the net profit margin, measure

What is the formula for calculating free cash flow in Excel?

July 9, 2024 No Comments

A: Free cash flow (FCF) is used in fundamental analysis to measure the amount of cash a company generates, after accounting for its capital expenditures. To calculate a company’s FCF, refer to its balance sheet and subtract its capital expenditures from its total cash flow

What is the formula for calculating gross national product (GDP)?

July 9, 2024 No Comments

A: Gross national product (GNP) is a slightly modified version of gross domestic product (GDP). The GNP of a country is equal to the value of all goods and services produced by the nationals within an economy, plus the value of total imported goods and

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