COMM 200 Chapter Notes - Chapter 14: Cash Flow Statement, Gross Profit, Retained Earnings
Document Summary
Financial statements keep managers up-to-date on the success of the organization"s sales and marketing initiatives: this enables organizational control on costs and maintaining gross profit margin & overall profitability margin. Gross profit margin: the portion of an organization"s revenue that is left over after the organization has paid the direct costs associated with its products or services. Profitability margin: the portion of an organization"s revenue that is left after all operating expenses associated with its products or services have been paid out. There are three primary financial statements: the statement of comprehensive income (income statement, the statement of changes in financial position (balance sheet, the statement of cash flows (cash flow statement) The statements provide information to managers regarding an organization"s current liquidity and solvency position, as well as its overall financial capacity. = represents the flow of money within the organization that is directly related to day-to-day business dealings: revenue and re-occurring expenses (manufacturing, distribution, etc. )