Category: Accounting Tutorials

The Return on Assets Ratio (ROA) shows how well a company uses its assets in order to generate profits. ROA is one of the profitability ratios that are used to … Read More

Last week we produced an accounting tutorial setting out how to prepare a bank reconciliation. And we touched on some of the reasons why this is an important control for … Read More

Days Payable Outstanding (DPO) or as it’s also called, creditor days ratio (CDR), is an efficient ratio that shows how long it takes for a company to repay its suppliers. … Read More

The verification process in double-entry book keeping is critical to ensuring accurate data is compiled; and bank statement statements and their reconciliation to bank records form an important part of … Read More

The Debtor Days Ratio shows how quickly a company turn the credit sales made into cash. It’s therefore reasonable that the smaller the debtor days ratio, the quicker a company … Read More

Definition Liabilities are financial arrangements (normally called debt or loans) that create an obligation on a business to expend economic benefits to a third party. The accounting for liabilities is … Read More

A further ratio that can be used in determining the profitability of the firm is the net profit ratio (NPR). This ratio is also often referred to as the Net … Read More