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17 Cards in this Set
- Front
- Back
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real accounts (3)
can be found where (2) |
cash, accounts receivable/payable, retained earnings
balance sheet and statement of owner’s equity |
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nominal accounts aka
examples can be found |
temporary
revenue accounts, expense accounts income statement |
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statement of retained earnings
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retained earnings have changed OVER TIME
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what analytical tool is used to assess the short term viability of a company
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statement of cash flows
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return to equity/investment
median upper quartile |
21%
52% |
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return on assets median
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14.7%
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what tool is used to assess the managers use of resources
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return on assets
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gross profit margin averary
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22% or better
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net profit margin
average top quartile Optimal |
2.7%
7.5% optimal- 2.3% or better |
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current ratio optimal
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btwn 2 and 5
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quick ration or acid test optimal
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btwn 1 and 2
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solvency ratio
total debt/ total owner equity optimal |
less than .8= 80%
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turnover is optimal
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10-12
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turnover in days optimal
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30-36
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why do you not wnat turnover to be more than 12 times a year or every 15 dys
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may have too little inventory and be unable to help customers
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benefit of straight-line depreciation
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easier to calculate
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benefit of sum of years method
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more depreciation realized up front more tax savings up front when a new company may need the money
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