The current ratio is one of the liquidity ratios which measures a company’s ability to pay its short term liabilities with its assets. This is a good way to measure overall liquidity as short-term liabilities are due within the next year, giving the company only a short amount of time to raise … Read More about Current Ratio Formula

## Quick Ratio Formula

Quick ratio or acid test ratio is one of the liquidity ratios which measures a company’s ability to pay its short-term, current liabilities with its most liquid (or quick) assets. Quick assets are current assets which can be converted to cash quickly (within 90 days). Examples of quick assets … Read More about Quick Ratio Formula

## Weighted Average Formula

A weighted average is the average value of a set of numbers, with different levels of relevance. This relevance of each number is referred to as its weight, and is represented as a percentage of the total relevancy. All weights in a weighted average formula calculation should be equal to 100%, or … Read More about Weighted Average Formula

## Return on Equity Formula

What Is Return on Equity? Return on Equity (ROE) is a financial measure of profitability which illustrates how effectively a company manages Shareholders’ Equity and gets profit from it. By using Return on Equity investors can see if they’re getting a good return on their investments, while a … Read More about Return on Equity Formula

## Contribution Margin Formula

What is Contribution Margin? Contribution margin represents the incremental profit generated for each product/unit sold.It is a cost accounting calculation that tells a company the profitability of an individual product. The formula for contribution margin is the sale price of the item minus the … Read More about Contribution Margin Formula