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Matching Concept
Matching concept is based on the accounting period concept. The expenditures of a firm for…
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Need for a Uniform and Common Theory of Accounting
The frequent attempts by experts and professionals on having a “theory” that would guide accountants…
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Working Capital Cycle
Generation and disbursement of cash is carried out in the manner depicted by the following…
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Gross Working Capital and Net Working Capital
Gross working capital means the investment in current assets, whereas the Net working capital means…
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Management Accounting – Working Capital
Working capital is defined by experts as follows - “Working capital is the amount of…
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Management Accounting – Useful Ratios
Short–term Financial Position or Test of Liquidity(a) Current Ratios= Current AssetsCurrent Liabilities(b) Quick or Acid…
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Classification on the Basis of Financial Aspects
Ratios can be further classified based on their functional aspects as discussed below. Liquidity Ratios…
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Ratio Classification on the Basis of Financial Statement
Balance Sheet Ratios Ratios calculated from taking various data from the balance sheet are called…
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Limitations of Ratio Analysis
Although Ratio Analysis is a very useful accounting tools to analyze and interpret different accounting…
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Advantages of Ratio Analysis
● It is powerful tool to measure short and long-term solvency of a company. ● It is…