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Longitudinal IV - Exam 1.
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Longitudinal IV - Exam 1.
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Longitudinal IV - Exam 1list the three main components of the balance sheet in order
assets, liabilities, net worth
list the three types of assets on a balance sheet
current, fixed others
list the three types of liabilities on a balance sheet
current, accrued, long-term
formula for net worth/owner's equity
assets-liabilities
list the five components of an income statement in order
sales, cost of goods sold, gross profit, expenses, net profit
formula for net profit
gross profit - total expenses
formula for gross profit
sales - cost of goods sold
what is a systematic way of determining (1) how well the assets of a
business are being managed and controlled AND (2) whether return on
invested funds is satisfactory
financial analysis
Formula for cost of goods sold
,beginning inventory + cost of goods purchased - ending inventory
formula for current assets
cash + accounts receivable + inventory
4 ways you can use financial ratios in your future practice life?
controlling, planning, seasonality, and borrowing
___ examines differences in financial status between periods to identify
seasonal variations
seasonality
___ establishes a basis for credit and negotiate for best financing terms
borrowing
___ is when you track and compare financial performance of the
business over time
controlling
four classifications of financial analysis
profitability, efficiency, liquidity, solvency
___ measures the overall success in daily operations
profitability
profit sensitive to proportion of Rx sales to total sales
net profit to sales
, profit generated by assets provided by owners
net profit to net worth
profit not influenced by how assets were financed (borrowed or owners'
equity)
net profit to total assets
___ measures how well resources are being utilized
efficiency
what measures how efficiently inventory is being managed; how
frequently inventory is cycled as an indicator of how efficiently it is
managed
inventory turnover turnover
best example of average days to collect accounts receivable
insurance claims
what measures how efficiently receivables are collected, is important for
cash flow, and you need credit sales data to calculated
average days to collect accounts receivable
what is a desirable average days to collect accounts receivable
< 30
what is an OK average days to collect accounts receivable
45
what is a "problem" average days to collect accounts receivable
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