What is Direct costs and indirect costs?

What is Direct costs and indirect costs?

Costs can be classified as direct costs or indirect costs. The intent behind this classification is to assign costs in order to cost objects. Expense…
What is Variable, fixed and mixed costs?

What is Variable, fixed and mixed costs?

As the process of business activities alterations, some costs change and some do not. The response of a cost to a big difference in business…
What is Product costs and period costs?

What is Product costs and period costs?

Costs might be classified as product or service costs and period of time costs. This classification is normally used for monetary accounting purposes. A shorter…
What is Manufacturing costs and non-manufacturing costs?

What is Manufacturing costs and non-manufacturing costs?

Costs may be classified as manufacturing costs and non-manufacturing costs. This classification is usually used by manufacturing companies. Manufacturing costs: Manufacturing costs can be further…
Financial Leverage: Theory and Mathematical Explanation

Financial Leverage: Theory and Mathematical Explanation

Financial leverage (or simply leverage) means acquiring assets while using funds provided by means of creditors and desired stockholders for the main benefit of common…
Preparation of common size statement: Mathematical Solution

Preparation of common size statement: Mathematical Solution

Common size statement is one in which all the items are expressed as a percentage of a base item. Common size statements are helpful in discovering…
Vertical analysis of financial statements: Mathematical Solution

Vertical analysis of financial statements: Mathematical Solution

Vertical analysis (common-size analysis) is usually a popular method involving financial statement analysis that shows each item on a statement as a portion of a…
Horizontal analysis of financial statements: Mathematical Solution

Horizontal analysis of financial statements: Mathematical Solution

Horizontally analysis is usually a financial statement research technique that shows changes within the amounts of corresponding financial statement items over a period of time.…
Capital Gearing Ratio: Mathematical Solution

Capital Gearing Ratio: Mathematical Solution

Capital gearing ratio is a useful tool to investigate the capital structure of any company and also computed by dividing more common stockholders equity by…
Fixed Assets to Equity Ratio: Mathematical Solution

Fixed Assets to Equity Ratio: Mathematical Solution

Fixed assets to equity ratio measures the contribution of stockholders as well as the contribution of debt sources within the fixed assets with the company.…
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