BU127 Study Guide - Title Search, Ddb Worldwide, Financial Statement
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BU127 Full Course Notes
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Document Summary
Chapter 9: reporting and interpreting property, plant, and equipment; natural. Understanding the business insufficient capacity results in lost sales costly excess capacity reduces profits. Long-lived (or long-term or capital assets): are tangible or intangible resources owned by a business and used in its operations to produce benefits over several years. Actively used in operations: expected to benefit future periods. Assets subject to depreciations: buildings and equipment, furniture and fixtures. Natural resource assets subject to depletion: mineral deposits and timber. Definite life: patents, copyrights, franchises, trademarks, goodwill. Fixed asset turnover = net sales revenue/average net fixed assets. Ratio measures a company"s ability to generate sales given an investment in fixed assets. Buildings amount recorded for purchase (acquisition cost) is also called cash equivalent price: purchase price, renovation and repair costs, legal and realty fees, title fees. Equipment: purchase price, installation costs, modification to building necessary to install equipment, transportation costs.
