# Accounting Ratios

Accounting Ratios – Financial Accounting Ratios – Accounting Ratio Analysis – List of Accounting Ratios including profit margin, gross margin, asset turnover ratio, current ratio, quick ratio and other key accounting ratios.

Financial accounting ratios help analyze company’s performance in any given year and through out the years. Balance sheet shows the financial position of a company at a given point in time. Income statement shows financial performance through a given time period, e.g. a year. Cashflow statement depicts the flow of cash through a given time period. Accounting ratios help connect the statements together and make sense of what is happening with the business.

## accounting ratios

Accounting Ratios diagram # Net Present Value – NPV

NPV – Net Present Value – How to calculate net present value (NPV)? Net present value is calculated as a sum of cash flow through project life cycle adjusted to the discount interest rate. NPV is calculated to estimate the net benefit of a project and other types of multiyear engagements. NPV Calculation Diagram – net present value calculation methodology.

NPV is a key finance tool. Usually, the initial cashflow is negative due to the investment required (e.g. purchase of new equipment). As time progresses, the company starts to generate positive cash flow. The further away is the cashflow, the more discounted it becomes (i.e. cash today is worth more than the same amount of cash in the future).

## npv calculation diagram

Net Present Value – NPV diagram # Supply and Demand

Supply And Demand – Supply And Demand Graph – Economics Graph – Supply and demand graphs depict the equilibrium between suppliers and consumers. The graph is an intersection of two curves mapped against quantity and price. The most famous economics framework of the supply demand equilibrium.

Consumers are willing to pay a higher price for a low quantity of goods. The price declines as the quantity demanded increases. Suppliers on the other hand are willing to supply a large quantity at a high price and a low quantity at a low price.

## supply and demand graph

Supply and Demand diagram  