NO. 41-60 41. Analytics is the process of using sophisticated methods to dig deeper into data and release its latent value.42. Sensitivity analyses, to put it another way, investigate the relative contributions of several sources of uncertainty to the total uncertainty of a mathematical model.43. If a company’s current ratio falls below 1, it suggests it does not have enough short-term cash on hand to pay its immediate debts.44. A higher debt servicing ratio indicates a better ability to generate sufficient cash flow to cover debt payments.45. The dividend yield is a financial ratio that measures the return on investment in the form of dividends paid by a company.46. However, it is important to note that the dividend yield should be analyzed along with other factors such as the company’s financial health, dividend growth, and sustainability.47. It provides insight into how much of the company’s profits are distributed to investors versus being retained for other purposes.48.A higher dividend payout ratio suggests that a larger portion of earnings is being paid out as dividends, while a lower ratio indicates that the company retains more earnings for reinvestment or other uses.49. This chapter lays the groundwork for the future study of accounting by introducing fundamental topics.50. By comparing cash flow and profit, you can gain a better understanding of the dynamics at play and how they affect business decisions.51. This metric takes into account the time it takes to sell inventory, collect receivables, and settle payables.52. Both DIO and DSO can be viewed in a positive light because they are tied to liquid, short-term assets like inventories and accounts receivable.53. A lower DIO score is preferable since it implies that sales are being made quickly, which bodes well for the company’s turnover.54. The shorter the DSO, the better, as it shows the company is collecting capital quickly and adding to its cash position.55. It begins with cash in hand and tracks it as it is used to buy goods and pay bills, then as it is invested in research and development, and finally as it is earned via sales and refunded through receivables.56. Along with other metrics, the CCC value provides insight into a company’s financial health in terms of its management’s ability to generate and reinvest capital from its short-term assets and obligations.57. In summary, while profit provides an overview of a company’s financial performance, cash flow focuses on the actual movement of cash and its impact on liquidity.58. Profit helps evaluate the overall financial health and profitability of a company, while cash flow helps assess the company’s ability to meet its short-term financial obligations and fund ongoing operations.59. In summary, markup is the percentage added to the cost of a product to determine its selling price, while margin is the percentage of revenue that remains after accounting for the cost of goods sold.60. Markup helps businesses set their selling prices to cover expenses and generate a profit, while margin helps evaluate the profitability of each sale and compare the performance of different products or businesses within the same industry.
