Tangible Net Worth (TNW) is a measure of a company’s financial strength, representing the value of its physical, or "tangible," assets after deducting liabilities and intangible assets. Unlike standard net…
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When a company raises debt, it is often subject to conditions, restrictions, and terms known as debt (or financial) covenants. A restrictive covenant is a condition that restricts, limits, prohibits, or prevents…
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A Schedule of Accounts is a detailed listing of the individual accounts that make up a specific category in the general ledger, typically accounts receivable or accounts payable. This schedule…
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The Minimum Interest Coverage Ratio is a financial metric used to assess a company’s ability to meet its interest payment obligations on outstanding debt. It is particularly important for lenders…
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Minimum Liquidity refers to the minimum amount of liquid assets that an individual, company, or financial institution must maintain to ensure they can meet short-term obligations and continue operations without…
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A Letter of Credit (LC) is a financial instrument issued by a bank or financial institution on behalf of a buyer, guaranteeing payment to the seller or beneficiary, provided that…
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Dilution of Receivables refers to the reduction in the value of a company's accounts receivable due to factors such as discounts, returns, allowances, bad debts, or other adjustments that decrease…
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Distress Cost refers to the financial costs and negative consequences a company incurs when it experiences financial distress, which is a situation where a company struggles to meet its financial…
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