Employee compensation structures can also include semi-variable costs. For instance, a salesperson’s pay structure may have a fixed salary as well as a variable component in the form of commissions. Similarly, executives may receive fixed salaries and variable bonuses based on performance. Let’s assume that it costs a bakery $15 to make a cake—$5 for […]

The goal for a business is not necessarily to have the lowest possible ratio. “A very low debt-to-equity ratio can be a sign that the company is very mature and has accumulated a lot of money over the years,” says Lemieux. “It’s a very low-debt company that is funded largely by shareholder assets,” says Pierre […]