Business Administration 2257 Study Guide - Final Guide: Cash Flow, Net Income, Cash Management

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Assess performance of existing department, product line, etc. Unit contribution = selling price variable cost per unit. Contribution margin rate = uc / selling price. Breakeven as a % of market = breakeven sales / total market sales. For target profit breakeven, add target profit to breakeven sales. Return on investment = recurring annual return / initial investment (%) Payback = initial investment / recurring annual return (# of years) Collection from sales (recurring), using sales forecast and schedules. Identify nature and timing of all cash inflows, including. Subtract outflows from inflows to calculate net cash flow for period. Add net cash flow of current period to ending balance of previous period to calculate new ending balance. Estimate expense levels using vertical analysis, management policy, or past i/s. Operating expense d/expense + expense reallocation = total operating profit. Non differential d/ interest d/amortization = net earning before tax. Enter items not expected to change from the last balance sheet.