ECO 1192 Lecture Notes - Lecture 7: Inventory Turnover, Current Liability, Management Accounting
7 Nov 2017
School
Department
Course
Professor
Document Summary
Analysis of the costs and benefits of business activities. Assets: anything of value that a business possesses and can use for profit. Owner"s equity: property rights of stockholders calculated as net assets. Current assets: can be converted to cash in under a year. Long-term assets: will take over a year to be converted to cash. Long-term liabilities: claims not expected to draw on current assets. Operating revenues: includes sales of goods or services and investment income. Operating expenses: includes salaries, utilities, rent, interest on loans, purchases of goods or services, depreciation of capital assets. Working capital = current assets - current liabilities. Leverage ratio: equity ratio (total owner equity / total assets) Profitability ratio (profits after tax / total assets) A 3-5 year road map of the operating, financial, and hr status of a business. Helps owners understand cash flows for hiring or investments. Presents a firm"s intensions and future revenue to attract investors.
