The document provides an overview of key concepts related to financial statements, taxes, and accounting. It discusses the three main financial statements - the income statement, balance sheet, and statement of cash flows. It explains the differences between cash and net income, and how the balance sheet represents stocks of money at a point in time while the income statement reflects flows over a period of time. The document also covers accounting concepts like the double-entry system, as well as taxation for individuals and corporations.
The Different Types of Fixed-Income SecuritiesBrian Zwerner
Longtime financial executive Brian Zwerner serves as the managing principal of Kensington Blake Capital, LLC, in Atlanta, Georgia. Among his other responsibilities at the firm, Brian Zwerner invests in money market securities and bonds, otherwise known as fixed-income securities.
Liquidity Ratio
Measures the relationship between current assets and current liabilities with the help of data extracted from the balance sheet of the company
Assess the ability of business to meet its short-term obligation usually one year
Assess whether the business has sufficient cash and current assets to pay back its current liabilities
Types of Liquidity Ratio
Current Ratio, Quick Ratio, Cash Ratio
Current Ratio
It measures the ability of the business to meet its current liabilities by converting current assets into cash during the operating cycle of the firm to pay off the debt efficiently on time
Higher the current ratio, better is the firm’s position in managing its working capital
The standard current ratio showing an efficient liquidity is 2:1
Formula, Current Ratio = (𝐂𝐮𝐫𝐫𝐞𝐧𝐭 𝐀𝐬𝐬𝐞𝐭𝐬)/(𝐂𝐮𝐫𝐫𝐞𝐧𝐭 𝐋𝐢𝐚𝐛𝐢𝐥𝐢𝐭𝐢𝐞𝐬)
Quick Ratio
Quick ratio is also known as acid-test ratio
It takes into account only those current assets which are highly liquid so it excludes the inventory/stocks from current asset
Formula, Quick Ratio = (𝐂𝐮𝐫𝐫𝐞𝐧𝐭 𝐀𝐬𝐬𝐞𝐭𝐬 −𝐒𝐭𝐨𝐜𝐤𝐬 −𝐏𝐫𝐞𝐩𝐚𝐢𝐝 𝐄𝐱𝐩𝐞𝐧𝐬𝐞𝐬)/(𝐂𝐮𝐫𝐫𝐞𝐧𝐭 𝐋𝐢𝐚𝐛𝐢𝐥𝐢𝐭𝐢𝐞𝐬)
Quick assets = Current Assets – Stocks – Prepaid Expenses
A standard quick ratio is considered to be 1:1 which is safe for any business
Thus, quick ratio is an indicator of a company’s short-term liquidity position and measures ability of business to meet its short-term obligations with most liquid assets
Cash Ratio
Cash ratio is the most stringent measure of liquidity which takes into account only cash & cash equivalents to get the working capital efficiency of business
The metric calculates a company's ability to repay its short-term debt with readily-liquidated cash resources
Formula, Cash Ratio = (𝐂𝒂𝒔𝒉 & 𝑪𝒂𝒔𝒉 𝑬𝒒𝒖𝒊𝒗𝒂𝒍𝒆𝒏𝒕𝒔)/(𝐂𝐮𝐫𝐫𝐞𝐧𝐭 𝐋𝐢𝐚𝐛𝐢𝐥𝐢𝐭𝐢𝐞𝐬)
Cash equivalents are the assets that can speedily get converted into cash as and when required like cash on hand, demand deposits, money market instruments, savings accounts.
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The Different Types of Fixed-Income SecuritiesBrian Zwerner
Longtime financial executive Brian Zwerner serves as the managing principal of Kensington Blake Capital, LLC, in Atlanta, Georgia. Among his other responsibilities at the firm, Brian Zwerner invests in money market securities and bonds, otherwise known as fixed-income securities.
Liquidity Ratio
Measures the relationship between current assets and current liabilities with the help of data extracted from the balance sheet of the company
Assess the ability of business to meet its short-term obligation usually one year
Assess whether the business has sufficient cash and current assets to pay back its current liabilities
Types of Liquidity Ratio
Current Ratio, Quick Ratio, Cash Ratio
Current Ratio
It measures the ability of the business to meet its current liabilities by converting current assets into cash during the operating cycle of the firm to pay off the debt efficiently on time
Higher the current ratio, better is the firm’s position in managing its working capital
The standard current ratio showing an efficient liquidity is 2:1
Formula, Current Ratio = (𝐂𝐮𝐫𝐫𝐞𝐧𝐭 𝐀𝐬𝐬𝐞𝐭𝐬)/(𝐂𝐮𝐫𝐫𝐞𝐧𝐭 𝐋𝐢𝐚𝐛𝐢𝐥𝐢𝐭𝐢𝐞𝐬)
Quick Ratio
Quick ratio is also known as acid-test ratio
It takes into account only those current assets which are highly liquid so it excludes the inventory/stocks from current asset
Formula, Quick Ratio = (𝐂𝐮𝐫𝐫𝐞𝐧𝐭 𝐀𝐬𝐬𝐞𝐭𝐬 −𝐒𝐭𝐨𝐜𝐤𝐬 −𝐏𝐫𝐞𝐩𝐚𝐢𝐝 𝐄𝐱𝐩𝐞𝐧𝐬𝐞𝐬)/(𝐂𝐮𝐫𝐫𝐞𝐧𝐭 𝐋𝐢𝐚𝐛𝐢𝐥𝐢𝐭𝐢𝐞𝐬)
Quick assets = Current Assets – Stocks – Prepaid Expenses
A standard quick ratio is considered to be 1:1 which is safe for any business
Thus, quick ratio is an indicator of a company’s short-term liquidity position and measures ability of business to meet its short-term obligations with most liquid assets
Cash Ratio
Cash ratio is the most stringent measure of liquidity which takes into account only cash & cash equivalents to get the working capital efficiency of business
The metric calculates a company's ability to repay its short-term debt with readily-liquidated cash resources
Formula, Cash Ratio = (𝐂𝒂𝒔𝒉 & 𝑪𝒂𝒔𝒉 𝑬𝒒𝒖𝒊𝒗𝒂𝒍𝒆𝒏𝒕𝒔)/(𝐂𝐮𝐫𝐫𝐞𝐧𝐭 𝐋𝐢𝐚𝐛𝐢𝐥𝐢𝐭𝐢𝐞𝐬)
Cash equivalents are the assets that can speedily get converted into cash as and when required like cash on hand, demand deposits, money market instruments, savings accounts.
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Subscribe to Devtech Finance
Introduction to image processing (or signal processing).
Types of Image processing.
Applications of Image processing.
Applications of Digital image processing.
Learning mathematical proof, lessons learned and outlines of a learning envir...Nicolas Balacheff
SDSU seminar, 2005
This talk outlined aspects of learning mathematical proof and presented the principles of the design of a learning environment (V. Luengo PhD 1997)
Early warning systems for food water-energy nexus in GMS regionPrabhakar SVRK
For a full paper on this subject, please refer to the links below:
http://enviroscope.iges.or.jp/modules/envirolib/view.php?docid=3390
http://gis.gms-eoc.org/GMS2020_WS-MATERIALS/2.1.4%20Prabhakar_Climate_Risks_to_Agriculture.pdf
Water-Food-Energy Nexus in the context of groundwater use in India: Experience from three Indian States
A presentation by Aditi Mukherji
Presented at an ‘Expert Group Meeting on Improving Access to Water, Sanitation and Energy Services in Asia and the Pacific’ in Bangkok, Thailand on 20 March 2013
Chapter 02 Financial Background A Review Of Accounting, Financial Statements, And Taxes
1. Financial Background: A Review of Accounting, Financial Statements, and Taxes Chapter 2
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31. Progressive Tax Systems, Marginal and Average Rates--Example Q: Given the following tax brackets, calculate the total taxes (in dollars) a taxpayer earning $11,000 will pay. Also calculate the marginal and average tax rates. A: Since the taxpayer earned above $5,000 (but less than $15,000) she will pay two different tax rates. The first $5,000 will be taxed at 10%, so she will owe $500 on that amount. However, she earned an additional $6,000 which will be taxed at the 15% tax rate, for a tax of $900. Thus, her total tax in dollars is $500 + $900, or $1,400. Her marginal tax rate is 15%, or what she would pay in taxes on the next dollar of income. Her average tax rate is 12.7%, or $1,400 $11,000. Example 25% Over $15,000 15% $5,000 - $15,000 10% 0 - $5,000 Tax Rate Bracket
38. Personal Taxes—Example Q: The Smith family had the following income in 2003: During 2003 they sold an investment property for $50,000 that they had purchased three years earlier for $53,000. They also sold some AT&T stock for $14,000 for which they had paid $12,000 five years before. They paid $12,000 interest on their home mortgage and $1,800 in real estate taxes. State income tax of $3,500 was withheld from their paychecks during the year. They contributed $1,200 to their church. They have two children living at home. Assume the exemption rate is $3,050 per person. What is their taxable income and their tax liability? Further, what are their marginal and average tax rates using the tax rates for the married, filing jointly column in Table 2.4? Example 600 Dividends from General Motors 1,200 Interest on Boston bonds 800 Interest on IBM bonds 2,000 Interest on savings account 42,000 Sue $45,000 Joe Salaries
39. Personal Taxes—Example A: The income on the Boston bonds is exempt from taxation; thus their taxable income is $90,400, including salaries, interest and dividend income. They had a capital loss on their investment property of $3,000 and a capital gain of $2,000 on the sale of stock. Thus they have a net capital loss of $1,000. Since this is less than $3,000 it can be used in its entirety to offset ordinary income. Therefore their total income is $89,400 or $90,400 - $1,000. Their deductions total $18,500 and include mortgage interest of $12,000, state and real estate taxes of $5,300 and a charitable deduction of $1,200. They also have exemptions totaling $12,200, or $3,050 x 4. Their taxable income is their total income less total deductions and total exemptions, or $58,700. Example
40. Personal Taxes—Example A: Their tax liability is as follows: Their average tax rate is 16.3%, or $9,556 $58,700 while their marginal tax rate is 27%. Example $9,556 Tax liability $3,038 27% of the amount in the third bracket ($58,700 - $47,450) x .27 $5,318 15% of the amount in the second bracket ($47,450 - $12,000) x .15 $1,200 10% of the entire first bracket $12,000 x 0.10
44. Corporate Taxes—Example Q: Calculate, using the corporate tax rates in Table 2.5, the tax liability for a corporation making EBT of $280,000. A: Applying the corporate tax table results in the following tax liability: Example $92,450 Total $70,200 $180,000 x .39 $8,500 $25,000 x .34 $6,250 $25,000 x .25 $7,500 $50,000 x .15