CAPM, or the capital asset pricing model, is a type of financial model used in corporate finance to describe the relationship between the risk of a security (such as a stock) and the market as a whole. Investment bankers often use this model to analyze individual stocks or whole portfolios, and CAPM forms a foundation …
Bloomberg is a giant in the financial services sector, offering finance professionals tools and products that help them analyze markets, make trades, and stay up to date with the latest relevant news. However, Bloomberg also works in media, software, machine learning, and data analytics. And according to Forbes, it’s one of the best employers in …
GAAP, or generally accepted accounting principles, is the foundation for careers in accounting. These principles explain how an accountant should approach all aspects of the job and seek to standardize financial reporting. In this guide, we’ll go over: What Is GAAP? GAAP stands for generally accepted accounting principles. These principles govern the accounting profession in …
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The current ratio is a metric used by accountants and finance professionals to understand a company’s financial health at any given moment. This ratio works by comparing a company’s current assets (assets that are easily converted to cash) to current liabilities (money owed to lenders and clients). In this guide, we’ll cover: Current Ratio Definition …
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The quick ratio is a formula and financial metric determining how well a company can pay off its current debts. Accountants and other finance professionals often use this ratio to measure a company’s financial health simply and quickly. In this guide, we’ll go over: Quick Ratio Definition The quick ratio, also called an acid-test ratio, …
EBITDA stands for earnings before interest, taxes, depreciation, and amortization. Finance professionals use EBITDA, calculated from details reported in annual financial statements, to determine a company’s profitability. Essentially, EBITDA looks at how much money a company makes before expensing taxes and interest without considering the depreciation of assets. EBITDA Definition EBITDA is a measure of …
Assets are resources that either an individual or a company uses. For example, someone’s personal assets may include their work experience or a life insurance policy. On the other hand, a business’s assets are things the company can use to generate revenue. In this guide, we’ll go over: Asset Definition An asset is generally any …
The accounting equation is a principle in accounting that says that a company’s assets must be equal to its liabilities and equity. This equation relies on the double-entry system of accounting, where every transaction results in positive or negative changes to at least two of these accounts: assets, liabilities, or equity. In this guide, we’ll …
Revenue shows how much a company makes from selling goods or services. Revenue, or income, is found on several financial statements and is used by finance professionals to determine profitability. For straightforward business models, calculating revenue is fairly simple. But, the more complex the business, the harder it is to determine income accurately. In this …
Understanding how to calculate profit margins is a core responsibility of accountants and many other finance professionals. Profit margins are an easy way to determine if a company is profitable and can inform investing decisions and help with crafting budgets. In this guide, we’ll go over: What Is a Profit Margin? A profit margin is …
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