The cash ratio is a financial ratio that measures a company’s ability to pay off its short-term debt obligations with its cash and cash equivalents. It is a more conservative measure of liquidity than the current ratio, as it only considers a company’s most liquid assets. The formula for calculating the cash ratio is as… Read More »
Cash flow to stockholders is a financial metric that measures the net cash flow a company pays to its stockholders (i.e. shareholders) during a given period. It is also known as cash flow to equity. The cash flow to stockholders is calculated by subtracting a company’s dividend payments to its stockholders from its net income… Read More »
Cash flow to creditors is a financial metric that measures the net cash flow a company pays to its creditors (i.e. lenders and bondholders) during a given period. It is also known as cash flow to debt. The cash flow to creditors is calculated by subtracting a company’s interest payments to its creditors from its… Read More »
The cash flow identity is a fundamental principle in finance that states that the cash flow from a company’s operations, investing activities, and financing activities must all equal each other over a given period of time. The cash flow identity is expressed by the following equation: Cash Flow from Operations + Cash Flow from Investing… Read More »
Cash flow from assets is a financial metric that measures the cash generated or used by a company’s operating, investing, and financing activities. It is also known as cash flow from operations or cash flow from operating activities. The cash flow from assets is calculated by subtracting a company’s capital expenditures (money spent on long-term… Read More »
The cash cycle, also known as the cash conversion cycle, is a financial metric that measures the time it takes for a company to convert its investments in inventory and other resources into cash received from sales. The cash cycle is used to evaluate a company’s efficiency in managing its working capital. The cash cycle… Read More »
The cash coverage ratio is a financial ratio that measures a company’s ability to pay off its current liabilities with its available cash and cash equivalents. The cash coverage ratio is also known as the cash ratio or the liquidity ratio. The cash coverage ratio is calculated by dividing a company’s cash and cash equivalents… Read More »
The capital intensity ratio is a financial ratio that measures the amount of capital required to generate a certain level of revenue or sales. It is calculated by dividing the total assets of a company by its annual sales revenue. The capital intensity ratio reflects the degree to which a company relies on its assets… Read More »
Capital gains yield is a measure of the change in the market price of a security, such as a stock or bond, over a certain period of time. It represents the percentage increase in the market price of the security, not including any dividends or other income earned from the security. The capital gains yield… Read More »
The capital asset pricing model (CAPM) is a financial model that is used to calculate the expected return on an investment, based on the risk of that investment relative to the overall market. The model was developed by William Sharpe, John Lintner, and Jan Mossin in the 1960s and is widely used in finance and… Read More »
Float management is the process of monitoring and managing the various types of float that exist within a company’s cash management system, with the goal of optimizing cash flow and minimizing the cost of float. Measuring float involves tracking the amount of time that funds remain in each type of float, including disbursement float (the… Read More »
Collection float and net float are two related concepts that are used to measure the timing and availability of funds within a company’s cash management system. Collection float refers to the time delay between when a company receives a payment and when the funds are actually credited to its bank account. For example, if a… Read More »
Disbursement float is the time delay between when a company initiates a payment and when the payment is actually debited from its bank account. Disbursement float represents the time period during which a company still has access to the funds that it has earmarked for payment, before those funds are actually withdrawn from its account.… Read More »
In finance, float refers to the difference between the balance shown in a company’s bank account and the actual amount of money available in the account. The term “float” is often used to describe the time delay between when a payment is made and when it is actually processed and cleared by the bank. For… Read More »
Cash management and liquidity management are related concepts, but they refer to slightly different aspects of a company’s financial management. Cash management refers to the process of managing the inflows and outflows of cash within a business in order to optimize cash balances and ensure that the business has sufficient cash on hand to meet… Read More »