What are Lending Ratios? Lending ratios, or qualifying ratios, are ratios used by banks and other lending institutions in credit analysis. Financial institutions assign a credit score to borrowers after performing due diligence, which involves a comprehensive background check of the borrower and his financial history. Lending ratios are extensively used in the underwriting approval…
What are Growth Stocks vs Value Stocks? In this article, we will talk about the key features and differences between growth stocks vs value stocks. Definition Growth stocks are stocks that come with a substantially higher growth rate compared to the mean growth rate prevailing in the market. It means that the stock grows at…
What are VBA Variable Types? In Excel VBA, individuals can use different variable types and constants in their worksheets. A variable is defined as storage in the computer memory that stores information to execute the VBA code. The type of data stored in the variable depends on the type of data of the variable. For…
What is Sub vs Function? In this article, we will discuss the key differences between a sub vs function. Both are sets of commands that are used to perform specific tasks in Microsoft Excel’s Visual Basic Application (VBA). A sub, also known as a subroutine or sub procedure, is a piece of code that is…
What is Excel IF Statement? IF Statement is one of the popular Excel instructions that can be used as a decision-making statement. It is one of the foundational concepts in programming, and it gives the required intelligence to a program so that the program implements decisions based on the criteria set by the user. In…
What is Capital Loss? Capital loss is the reduction in the value of a company’s capital, i.e., investments, capital assets, etc. The loss is realized when capital assets are sold for a price lower than the original price. How to Calculate Capital Loss The formula for capital loss is as follows: Capital Loss = Purchase…
What is Absolute Return? Absolute return can be defined as the return, i.e., absolute gain or loss, an investment generates over a specific period of time. The gain or loss is expressed as a percentage of the total investment. How is Absolute Return Calculated? Absolute return is calculated as follows: Say, for example, an investor…
What is Beyond Budgeting? Beyond Budgeting is the idea of abolishing traditional budgeting processes to eventually improve management control over an organization. By abandoning traditional budgeting processes, a company aims to establish a highly decentralized organizational system and adaptive set of management processes. Rationale Behind Beyond Budgeting The rationale behind the Beyond Budgeting framework is…
What is the Housing Expense Ratio? The housing expense ratio is a ratio that compares housing expenses to earnings before tax (EBT) or pretax income. The ratio is often utilized in credit analysis initiated by lenders during the lending process. In other words, lenders, such as banks, use the ratio during due diligence while qualifying a…
