What Are Two Ways in Which a Company Can Improve

question 135

Short Answer

What are two ways in which a company can improve its debt ratio?

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Definitions:

Interest Expense

The cost incurred by an entity for borrowed funds, recognized as a finance expense or interest cost.

Discount Rate

The discount rate applied in the evaluation of discounted cash flow (DCF) to calculate the current worth of future cash flows.

Proportionate Consolidation Method

The proportionate consolidation method is an accounting technique where a parent company combines a portion of its subsidiary's assets, liabilities, income, and expenses in proportion to its ownership interest in the subsidiary.

Fair Value

Fair value is the price that would be received for selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.