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Accounting 12-14

Chapters 12,13,14 acct 1020

What is a horizontal analysis Is a trend analysis for evaluating a series of finacial statement data over a period of time
What is the purpose of horizontal analysis To determine the increase or decrease that has taken place
Horizontal analysis formula____ computation of change since base year current year-base year amount/ base year amount
Horizontal analysis formula____computation of current year to base year current years amount/base year amount
What is vertical analysis also called common size analysis is a technique for evaluation finacial statment data that express each intem as a percentage of base amount
What are tow things a vertical analysis shows a fincancial statment user relative size of each catagory, percent change in the indivudual asset.
What is a liquidity ratio measure short term ability of a company to pay obligations
Current Ratio --- Formula---Expressed Measures ability of a company to pay current liablilities with current asset, current asset/current liability, ratio
Current Cash Debt Coverage Ratio----Formula----Expressed tells a comp;anies abilit to pay curren tliabilities from cash from operating activties with going into debt, cash provided by operations/average current liabilites, ratio
Days in inventory=----formula----expressed Tells you the average days a company has its inventory before its sold, 365days/inventory turnover ratio, number of days
Inventory turnover ratio---formula---express tells how quickly a company sells its goods, cost of goods sold/average inventory, number of times
Receivalbes turnover ratio---formula---expressed measures the number of times the company collects its recivable, net credit sales/average net receivables, number of times
average collection period===formula---expressed measure the time your AR is not paid, 365days/receivables turn over ratio, number of days
What are solvency ratios solvency is supposed to measure the ability of the company to survive over a long period of time
Debt to total asset ratio---formula----expressed measuring the percentage of financing provided by creditors (paying debt with loans0, total liablities/total assets, percentage
Cash debt coverage ratio---formula---dexpressed companies ability to repay liablilties with cash from operating activites with out acquiring debt, cash provided by operations/total assets, number of times
what are profitibility ratios measuring the income or operating success of a company
Earnings per share---formula-expressed measures the net income earned per share of acommon stock----net income- perfered stock dividents/average common shares outstanding, $amount
Price earnings ratio---formula---expressed Tel you the reflecitn ginvestors view in a company future earnings, stok market pricer per common share/ earnings per share, number
Gross profit ratio---formula---expressed shows relationship between gross profit and net sales, gross profit/net sales, percentage
profit margin ratio---formula----expressed net income/net sales, shoes the extent to which selling price covers all of a companies expenses, percentage
return on assets---formula---expressed what percentage of each dollar a copmany invested in its assets by net income, net incomme/avg. total assets, percentage
asset turn over ratio----formula---expressed $ of sales a company generates for each $ invested in its assets, net sales/avg. total assets, number of times
Return on equity=====formula----expressed shows how mnay $ of net income a compnay earned for each dollar common share quitiy it has, net income-perfered stock dividends/avg. common stock holders equity, percentage
what is the statment of cashflow reports all cash receipts in oif activites during a period
what are the four primary things the scf helps users access 1. the companies entry ability to generate futre cash flows, 2. the entitys ability to pay dividens and meet obligations. 3. the reason for the difference between net income and net cash by opperating activites 4. investing and financing
three activites operating--anything on income statement investing-- buying selling ppe and lending money to others Fiancaing-- dealign with issuing debt/payment of dividentds
most important activite op activites are most imoratn bcuz thats where cahs went or came
prepared sources scf 3 sources 1. comparative balance sheet-indicates the amounts in change in assets, liability, and stockholders equity 2. current income statement-info statement 3.additional info
what is the direct method shows operating cash receipts and payments you adjust every item on income statment from accrual to cash base fasb prefers thsi method
what is the indirect method adjust net income for any items that do not affect cash to determine net cash provided by OP activities
Managerial account is a feild of accounting that provides economic and financial info for managers and other internal users
6 primary activites of the management accountant 1.manufacturing and non manufacturing cost 2.computting th ecost of providing a service of manufacturing a product 3.determining the behavior of costs and expses 4.profit planning and formulizing these plans 5.providing a basis control cost 6.predata
What is financial accounting external users, financial statments, general puropose of reports, reports contain pretain to company as a whole, limited to double entry, GAAP, audited by CPA
What is managerial accounting internal users, internal reports, special purpose for specific decisions, reports pretian to sub of business, very detailed, extends beyound double entry, no audit
three classificiations of manufacturing cost Direct Material DM, Direct Labor DL, Factory Overhead, FOH
Raw materials are the peices purchased to make an items
two classification of raw materials direct material, indirect material
What are direct material are materials physically associted to the item
what are indirect materials items used to make itme but extras
what is direct labor the work of employees that is physicaly associated with the product
What is indirect labor has no physical association
What is manufacturing overhead FOH all cost inidreclty associated with a product
what are product coast is the cost associated with providing a product
manufactured coast are direct material, dl, foh
What are period cost all cost that do not directly relate to the product made
COGSM= begining inventory+purchased goods avail sale-ending invv.
cogs= finsihed goods+ begining bal+cogsm/ cost of goods avail sale-finish good end balance
Created by: 1846955237



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