Business

Cross-Functional What Is the Interest Coverage Ratio? The interest coverage ratio, or times interest earned, divides EBIT by interest expense to show how many times operating earnings cover interest… Business Cross-Functional What Is Internal Rate of Return (IRR)? The internal rate of return (IRR) is the discount rate at which an investment's net present value equals zero, compared with the… Business Cross-Functional What Is Inventory Turnover? Inventory turnover is cost of goods sold divided by average inventory, showing how many times stock is sold and replaced in a… Business Cross-Functional What Are Key Performance Indicators (KPIs)? Key performance indicators (KPIs) are the small set of quantitative measures an organisation selects to track progress toward strategic and operational objectives,… Business Cross-Functional What Is Liquidity Risk? Liquidity risk is the risk that a company cannot meet its obligations as they fall due because operating cash, available funding or… Business Cross-Functional What Is Management by Objectives (MBO)? Management by objectives (MBO) is a performance approach in which managers and employees agree specific, measurable objectives at the start of a… Business Cross-Functional What Is Mergers and Acquisitions (M&A)? Mergers and acquisitions (M&A) are transactions in which companies combine or one acquires another, pursued for scale, market entry, capabilities or synergies,… Business Cross-Functional What Is Net Present Value (NPV)? Net present value (NPV) is the sum of an investment's future cash flows discounted at the appropriate cost of capital, minus the… Business Cross-Functional What Is Net Profit? Net profit, also called net income or the bottom line, is the profit remaining after deducting all expenses, including cost of sales,… Business Cross-Functional What Is Net Profit Margin? Net profit margin is net profit divided by revenue, expressed as a percentage, showing how much of each unit of sales remains… Business Cross-Functional What Is Net Working Capital? Net working capital is the operating capital tied up in day-to-day trading, usually measured as trade receivables plus inventory minus trade payables,… Business Cross-Functional What Is Operating Profit? Operating profit, often called EBIT, is the profit from a business's core operations after cost of sales, operating expenses, depreciation and amortisation… Business Cross-Functional What Is the Price-to-Earnings Ratio (P/E)? The price-to-earnings ratio (P/E) is the share price divided by earnings per share, showing what investors pay for each unit of current… Business Cross-Functional What Is a Profit and Loss Statement? A profit and loss statement (P&L), or income statement, summarises revenue, costs and expenses over a period to show gross profit, operating… Business Cross-Functional What Is the Quick Ratio? The quick ratio, or acid-test ratio, compares cash, short-term investments and receivables with current liabilities, excluding inventory, to test whether a business… Business