As an office manager there are ratios and reports that need to be monitored on a monthly basis while others are part of the year-end report and review. The ratios that are being chosen are Current Ratio, Operating Margin and Working Capital. The one of the practice management ratios that is the most important is the Current Ratio or also known as Solvency Ratio. Current in a financial report indicates that it can either exchange the asset to cash within a one-year period or the liability is due within one year. Current assets are assets that can be changed to cash within one year. Current assets are cash, cash equivalents, accounts receivable, bad debt allowance, and any inventory that is on hand. Current liabilities are notices that must be funded within one year. Current liabilities are all notes and accounts payable due within one year, interest payable, wages payable, and income taxes payable. It is an signal of the business ability to pay back its short term accountability. To obtain this, the business should take all the current assets and distribute to current accountability. If the current ratio is less than one, this specifies the company has more debt due within one year than it has assets it can use to pay those debts.
We are required to give the informations needed to calculate a real exchange rate.
1. Informations needed to calculate a real exchange rate are <em><u>nominal exchange rate</u></em>, <em><u>domestic price in home currency</u></em>, and <em><u>foreign price in foreign currency</u></em>.
- Real exchange rate can be calculated with the formula:
<em>Real exchange rate = (Nominal exchange rate × Domestic price level) ÷ foreign price level</em>
2. A higher real exchange rate implies that the <em><u>domestic currency is depreciating.</u></em>
Therefore, real exchange rate depends on nominal exchange rate and price
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Answer:
C. Pay more than the minimum amount every month.
Explanation:
Because credit cards have very high interest rates, and the interest is compounded every day, it is recommended to pay more than the minimum amount every month, so that the total credit card bill is paid out more quickly.
What happens when you pay more than the minimum amount every month is that you are paying not only the interest and principal that is due, but you are also paying additional principal. This additional principal payment is what will reduce the amount that will need to be paid in the future.
