Business Administration 2257 Study Guide - Final Guide: Longrun, Five Ws, Terracycle
2 Oct 2013
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Liquididty: measures the ability to meet short-term debts. Concerned with the efficiency of working capital investments receivables, inventory and payables. Investment utilization: measures the balance between sales/profit and assets (particularly fixed assets and inventory). Growth: measures improvement (or decline in performance from year to year). Roi= ncf/diff inv relates size of investment to recurring cash flows expected. return can be loosely defined as the amount of money available to pay the investors. If one of the investors is a creditor (such as a bank), then payments are made by way of interest. If the return generated is not sufficient to make these interest payments, then the decision will likely be turned down. Unit contribution = selling price variable cost per unit. Contribution margin rate = selling price variable costs/selling price. Investing: do sources meet expectations is comp growing are assets being used efficiently. Non current ass: land, equipment, marketable sec = net cap ass account.
