COB 242: CHAPTER 6-9, 16
15 Cards in this Set
| Front | Back |
|---|---|
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Contribution Margin
|
Sales-Variable Expenses
% of each $ that goes towards fixed costs
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Margin of Safety
|
Total Sales-Break Even Sales
Below this point is a loss
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Break Even Point (units)
|
(Target Profit + Fixed Expenses)/ Unit Contribution Margin
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Break Even Point (dollars)
|
(Target Profit + Fixed Expenses)/ Contribution Margin Ratio
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Break Even Point
|
(Sales per Unit)(Quantity)=(Variable Cost per Unit)(Quantity) + Fixed Expenses + Target Profit
Ex. 30Q=20Q + 7500 + 0 Q=750
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Variable Costing (Internal)
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Sales - VCOGS (DM, DL, VMOH) - VS&A = CM
(Income Statement) CM - FMOH - FS&A = NI
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Absorbtion Costing (External)
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Sales - Abs COGS (DM, DL, VMOH, FMOH) = GM
(Income Statement) GM - VS&A - FS&A = NI
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Earnings per Share
|
(NI - Dividends) / Avg # of shares outstanding
Earnings per share (EPS) are the earnings returned on the initial investment amount.
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Working Capital
|
Current Assets - Current Liabilities
Working capital, also known as net working capital or NWC, is a financial metric which represents operating liquidity available to a business.
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Current Ratio
|
Current Assets / Current Liabilities
The current ratio is a financial ratio that measures whether or not a firm has enough resources to pay its debts over the next 12 months. Atleast 2
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Acid-Test Ratio
|
(Current Assets - Inventory) / Current Liabilities
In finance, the Acid-test or quick ratio or liquid ratio measures the ability of a company to use its near cash or quick assets to immediately extinguish or retire its current liabilities. Atleast 1
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Accounts Receivable Turnover
|
Sales on Account / Avg Accts Rec. Balance
|
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Inventory Turnover
|
...
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Current Assets
|
Cash, Accts Rec, Inventory, Prepaid Expenses
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Current Liabilities
|
Accounts Payable, Accrued Liabilities
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COB 242: CHAPTER 6-9, 16