BU227 Study Guide - Final Guide: Asset, Shares Outstanding, Reserve Requirement
Document Summary
Ability to generate earnings as compared to expenses/costs. Measures how much the company earned from the use of assets. Ongoing operations: common, expected to run into the future (i. e. bookstore selling books) Peripheral activities: activities that outside of the normal course of business (i. e. bookstore selling off old bookshelves) How much the firm earned for each dollar of shareholders" investment. Measures how much profit each sales dollar generated during the period. High/rising = efficient management of sales and expenses. What portion of profit was generated in cash. How efficiently a company utilizes its investment in property, plant and equipment over time. [beginning + ending balances of property, plant and equipment (net of accumulated depreciation)] 2. Measures the effectiveness of credit granting and collection activities. Measure the efficiency of inventory management how many times the average inventory was produced and sold during the period. Average inventory = (beginning inventory + ending inventory) 2.
