BU121 Lecture Notes - Lecture 4: Gross Profit, Earnings Before Interest And Taxes
Document Summary
Chapter 3: operating decisions and the statement of earnings. Operating cycle: (cash to cash) is the time it takes for a company to pay cash to suppliers, sell goods and services to customers and collect cash from customers. Not equal to expenditures: any the outflow of cash for any purpose. Cost of sales: cost of products sold to customers. Gross profit: net sales minus cost of goods. Operating income: net sales minus (cost of sales plus author operating expenses) Discontinued operations: because of nonrecurring nature it will be computed separately as disk 2 new operations not useful in predicting future recovery earnings. Earnings per-share: net earnings divided by average number of shares.
