COMM 103 Chapter Notes - Chapter 14: Inventory Turnover, Accounts Receivable, Income Statement
Document Summary
Gross profit margin: is the position of an organization"s revenue that is left over after the organization has paid the direct costs associated with producing its products or services. In analyzing the current financial position of a company, managers generally rely on three primary financial statements: the income statement, the balance sheet and the statement of cash flows. Operational transactions: represent the flow of money within an organization that is directly related to day to day business dealings. Liquidity: the amount of assets an organization possesses that can easily be converted into cash. Capacity: the ability of an organization to generate revenue and to grow its revenue streams. Solvency: the ability of an organization to meet long term fixed expense requirements and to fund future growth. Gross profit margin: the difference between revenues and the direct expenses incurred by a business. General (operating) expenses: indirect expenses such as admin, marketing etc.