A business needs to have spare capacity for activities such as production and staff. The capacity cushion calculation indicates the level of spare capacity a business has relative to its total capacity.
Last modified October 14th, 2022
Tag: Accounting Ratios
Quality of Earnings Ratio
Cash Flow Ratios Calculator
Cash Flow Ratio Analysis
Vertical Analysis Calculator
A vertical analysis shows each line of financial statements as a percentage of a base line item so that comparisons can be made. This free Excel calculator produces a vertical analysis of an income statement in relation to total revenue, and of a balance sheet in relation to total assets.
Last modified July 16th, 2019
Accounting Rate of Return
Days Sales Outstanding
Degree of Operating Leverage Calculator
The degree of operating leverage shows the effect on operating income of the cost structure of a business. The higher the fixed costs the higher the leverage and the more volatile and risky the operating income of a business is viewed.
The degree of operating leverage calculator allows for details relating to two businesses or accounting periods to be entered so that comparisons can be made.
Last modified February 24th, 2023
Operating Leverage Ratio Analysis
The operating leverage shows the level of fixed cost leverage within a business, and the degree of operating leverage shows the impact of the cost structure on the operating income of the business.
The operating income for a business with high leverage can change dramatically for a given change in the number of units sold, and its earnings are said to be more volatile and therefore more risky
Last modified January 27th, 2023
Cash Flow Statement Analysis
It is quite feasible for a business to show a healthy balance sheet and be profitable, but if it runs out of cash it will fail.
The balance sheet only shows the position at a particular point in time, and the income statement deals in profit not cash. The purpose of the business cash flow analysis is to correct this situation.
Last modified January 4th, 2023
Income Statement Analysis
Income statement analysis can be carried out using ratios based on information contained within the income statement. Understanding how to read a income statement and regular monitoring of the income statement ratios provides owners and management with a useful tool to help them manage their business more effectively.
By analyzing the income statement a business is able to see how it is performing relative to earlier accounting periods, and how its performance compares to other businesses in the industry.
Last modified June 7th, 2022
Balance Sheet Analysis
Balance sheet ratio analysis can be carried out using ratios based on information contained within the balance sheet. Knowing how to analyze a balance sheet gives the reader a better understanding of a business, allows changes over time to be monitored, and allows comparisons of different businesses to be made.
Last modified December 20th, 2019