BU127 Lecture Notes - Lecture 9: Current Liability, Cash Flow
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BU127 Full Course Notes
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I(cid:373)porta(cid:374)t i(cid:374)di(cid:272)ator of a (cid:272)o(cid:373)pa(cid:374)(cid:455)"s a(cid:271)ilit(cid:455) to (cid:373)eet its short-term obligations (cid:1843)(cid:1873)(cid:1855)(cid:1863) (cid:1844)(cid:1853)(cid:1872)(cid:1867)= (cid:1843)(cid:1873)(cid:1855)(cid:1863) (cid:1871)(cid:1871)(cid:1857)(cid:1872)(cid:1871) (cid:1873)(cid:1870)(cid:1870)(cid:1857)(cid:1866)(cid:1872) (cid:1853)(cid:1854)(cid:1864)(cid:1872)(cid:1857)(cid:1871) Current liabilities: mature in less than 1 year. Include trade payables, accrued liabilities, notes payable, deferred revenues. E(cid:454)pe(cid:374)ses that ha(cid:448)e (cid:271)ee(cid:374) i(cid:374)(cid:272)urred (cid:271)efore the e(cid:374)d of the period, (cid:271)ut ha(cid:448)e(cid:374)"t (cid:271)ee(cid:374) paid. Trade payables turnover ratio: measures how quickly management is paying trade accounts (cid:1846)(cid:1870)(cid:1853)(cid:1856)(cid:1857) (cid:1842)(cid:1853)(cid:1853)(cid:1854)(cid:1864)(cid:1857)(cid:1871) (cid:1846)(cid:1873)(cid:1870)(cid:1866)(cid:1867)(cid:1874)(cid:1857)(cid:1870) (cid:1844)(cid:1853)(cid:1872)(cid:1867)= (cid:1867)(cid:1871)(cid:1872) (cid:1867)(cid:1858) (cid:1845)(cid:1853)(cid:1864)(cid:1857)(cid:1871) (cid:1874)(cid:1857)(cid:1870)(cid:1853)(cid:1859)(cid:1857) (cid:1846)(cid:1870)(cid:1853)(cid:1856)(cid:1857) (cid:1842)(cid:1853)(cid:1853)(cid:1854)(cid:1864)(cid:1857)(cid:1871) Current portion of long-term debt: any portion of a note payable that is due within 1 year or the end of the operating period. Deferred revenues: revenues that have been collected but not earned, reported as liabilities because cash has been collected but the revenue has not been earned. It is probable that cash or other assets will be required to settle the obligation: a reliable estimate can be made of the amount of the obligation, examples: warranties, legal disputes, etc.
