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Chapter 11

MGMT 1000 Chapter Notes - Chapter 11: Cash Flow Statement, Retained Earnings


Department
Management
Course Code
MGMT 1000
Professor
Kathleen Rodenburg
Chapter
11

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Chapter 11 Understanding Accounting
LO-3 Financial Statements
Balance Sheets
Current Assets: Cash, bank, and other assets that can be converted to cash within a year
Fixed Assets: Land, buildings, and equipment have long-term use/value
Intangible Assets: Cost of obtaining rights such as patents and trademarks
Retained Earnings: Net Profits Dividend payments to shareholders
Cash Flow Statement
LO-5 Analyzing Financial Statements
Soleny Ratios: Borroer’s Aility to Repay Det
Short-Term Solvency Ratios
Measue a opay’s liuidity ad its aility to pay iediate dets
Currents Assets ÷ Current Liabilities
Long-Term Solvency Ratios
Debt-to-Equity ratio: Debt ÷ Oe’s Euity
Profitability Ratios: Earnings Power for Owners
Return on Equity
Net Income ÷ Total Oe’s Euity
If it’s highe tha last yea, the iestos ill e happy
If it’s loe tha the idusty o the iestos ill e oeed
Return on Sales
Net Income ÷ Sales Revenue
If it’s highe tha last yea, the iestos ill e happy
If it’s loe tha the idusty o the iestos ill e oeed
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