In this article we will discuss about interest cover and income gearing in a company. Interest Cover: This ratio is calculated to analyse the company's ability to meet interest obligations. It is expressed as number of times interest earned. It is measured as a ratio of profit before interest and tax to interest charges. The more the number of times [...]
In this article we will discuss about the estimation of working capital need of a company in special situations. Seasonal Industries: In the seasonal industries, the level of working capital requirement will not be similar all through the year. In times of off-season, the working capital requirement and the levels of investment in current assets and liabilities are very low. [...]
Learn how to calculate the working capital leverage of a company with the help of suitable examples. One of the important objectives of working capital management is by maintaining the optimum levels of investment in current assets and by reducing the levels of current liabilities, the company can minimize the investments in working capital thereby improvement in return on capital [...]