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Category: Education

What Is IRR Partitioning?

What Is IRR Partitioning? IRR Partitioning is a financial analysis technique used to break down the Internal Rate of Return (IRR) into its component parts, typically operating cash flows and reversion cash flows (sale proceeds). This method provides investors with a clearer understanding of where the returns are coming from and the associated risks. Key Steps in IRR Partitioning Why Is […]

IRR Partitioning Calculation Example

IRR Partitioning: A Calculation Guide The Internal Rate of Return (IRR) is a widely used metric in real estate and investment analysis, offering a comprehensive view of an investment’s profitability. However, understanding the sources of IRR—whether from operational cash flows or the eventual sale of an asset—can provide deeper insights into risk and return. This is where IRR […]

Activity ratios Formulas and Interpretation

Meaning of Activity Ratios Activity ratios are also known as asset management ratios, they measure how efficiently a company is using its assets to generate sales. These ratios help determine if the amount of each type of asset is reasonable, too high, or too low in view of current and projected sales. Below we show […]

What is liquidity ratio in Accounting

Liquidity ratios are all about figuring out if a company can pay its bills in the short term. It’s like checking if you have enough cash on hand to cover your immediate expenses. Current Ratio Current Ratio Formula Current Assets / Current Liabilities Interpretation of Current Ratio (What it tells you) This is a basic […]

What is a firm’s intrinsic value and current stock price?

Question What is a firm’s intrinsic value? Its current stock price? Is the stock’s “true” long-run value more closely related to its intrinsic value or to its current price? Intrinsic Value Definition of Intrinsic value A firm’s intrinsic value is an estimate of its “true” value. It’s based on the company’s expected future cash flows […]

DuPont Analysis and How it Works

DuPont Analysis is a powerful financial framework used to assess a company’s return on equity (ROE) by breaking it down into its component parts. This method allows analysts and investors to understand the underlying factors driving a company’s profitability and efficiency. Here’s an in-depth look at how DuPont Analysis works, its components, and its practical […]

Introduction to Financial Statement Analysis

Definition and Importance of Financial Statement Analysis Financial statement analysis involves evaluating a company’s financial statements to understand its performance, profitability, liquidity, and solvency. The primary purpose of this analysis is to make informed economic decisions regarding investments, lending, or management strategies. By scrutinizing financial statements, stakeholders can gain insights into a company’s operational efficiency […]

USA MBA Application Checklist

Application Checklist for MBA in the USA Starting your MBA journey in the USA is a big and exciting step! To make sure everything goes smoothly, being prepared is very important. We’ve made a simple checklist for you. This list will help you keep track of everything you need to get your application ready for […]