REC 475 Lecture Notes - Lecture 3: Inventory Turnover
Document Summary
Financial objectives: improving profit (aka the bottom line, appropriate accounting methods, investment activities, managers must generate a profit, facility construction/improvement are investment decisions. Ex: restaurants expanding too quickly and then can"t stay open. Debt and inventory management: liquidity- ability to meet short term financial obligations. The ability to get money immediately, getting cash quickly. Ex: banking account is super liquidity money right away. Ex: trying to sell a house is not liquidity it will take at least few weeks to get the money: solvency- ability to meet long term financial obligations. Basically it is having a plan to keep your business stable so you don"t have to liquidize every month to stay a float. Questions to figure out if something is solvency: How is their leadership: will help the company strive. Main thing about solvency is that the business has to make sure they have money for all of these the factors they have.
