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Otherwise known as Earnings Before Interest, Taxes, Depreciation and Amortization. Learn more about this indicator of a company's financial performance.
Whether a company chooses FIFO or LIFO has important implications for the bottom line and for tax liability.
The Debt-Service Coverage Ratio (DSCR) is a simple way to analyze whether a company can adequately manage its borrowing costs. The ratio helps banks evaluate the credit worthiness of an organization that is applying for a loan. It also tips off investors to companies carrying a debt level that could be destructive.
Selling, general and administrative expenses (SG&A) are a company's total direct and indirect costs from selling its product or service as well as its total general and administrative expenses. The company reports its SG&A on the income statement.
Contribution margin is a cost accounting concept that allows a company to determine the profitability of individual products.
Operating leverage tells investors about the relationship between a company's fixed and variable costs. The higher a company's fixed costs in relation to its variable costs, the greater its operating leverage, and vice versa.
Inventory turnover is a ratio that shows how quickly a company uses up its supply of goods over a given time frame. Inventory turnover may be calculated as the market value of sales divided by ending inventory, or as cost of goods sold (COGS) divided by average inventory.
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