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The expenditure-income ratio is a financial metric that compares an individual's or household's total expenditures to their total income over a specific period. It is calculated by dividing total expenses by total income, often expressed as a percentage. A lower ratio indicates better financial health, suggesting that a person is spending less than they earn, while a higher ratio may signal potential financial strain or reliance on debt. This ratio helps in budgeting and assessing overall financial stability.
What else can I help you with?
Is credit income or expenditure?
Credit is neither an income or an expenditure. It becomes an expenditure when you use it. expenditure
What is between revenue and expenditure?
revenue is income and expenditure is an expense
Importance of accounting ratios?
accounting ratio help management to predict the further income or the improvement in expenditure of an organisation. it guards management making the budget of the organisation.
Where does cash at bank go in a income and expenditure account?
In an income and expenditure account, cash at bank is typically recorded under the "Income" section if it represents cash inflows from various sources, such as donations or revenue. However, it can also appear in the "Expenditure" section if it reflects cash outflows for expenses incurred. Ultimately, cash at bank serves as a measure of liquidity and financial position rather than a direct component of income or expenditure itself.
What happens when expenditure exceeds income?
We can say that the business is in profit
The ratio of the change of the national income to the change in autonomous expenditure that brought it about- is known as?
the "Multiplier"
Is credit income or expenditure?
Credit is neither an income or an expenditure. It becomes an expenditure when you use it. expenditure
What do you mean by income over expenditure or expenditure over income?
income over expenditure is profitexpenditure over income is loss
How to calculate the burden ratio of bank?
(Non Interest Op Expenditure - Non Interest Income)/ Average Assets
What is the difference between income and expenditure incurred?
Inflow of money is income . Outflow of money is expenditure
What does the income-expenditure identity say about the relationship between income and expenditure?
The income-expenditure identity states that in an economy, total income equals total expenditure. This means that the amount of money earned by individuals and businesses is equal to the amount of money spent on goods and services.
What is between revenue and expenditure?
revenue is income and expenditure is an expense
What is income expenditure?
A statement that records the income and expenditure of an organization such as a charity,whose main purpose is not the generation of profit.
What is the difference between capital income and capital expenditure?
Income is money coming in, expenditure is money going out (spending).
Why does aggregate income equal aggregate expenditure?
Aggregate income equals aggregate expenditure because, in an economy, every dollar spent on goods and services (expenditure) generates an equivalent dollar of income for someone (income). This relationship is rooted in the circular flow of income and expenditure, where households receive income from firms in exchange for labor and then spend that income on goods and services produced by those firms. Thus, total spending in the economy matches total income generated, ensuring that aggregate income and aggregate expenditure are equal.
How do changes in aggregate expenditure effect income?
Changes in aggregate expenditure directly impact income through the multiplier effect. When aggregate expenditure increases, it stimulates production, leading to higher income for businesses and workers. This increase in income further boosts consumption, creating a cycle of increased spending and income. Conversely, a decrease in aggregate expenditure can lead to reduced income and economic contraction.
Is it true for an economy as a whole. income equals expenditure because the income of the seller must be equal to the expenditure of the buyer?
Yes
