Terms in this set (21)
Original
working capital
current assets - current liabilities
current ratio
current assets/current liabilities
debt to total assets
total liabilities/total assets
basic earnings per share
income available to common shareholders/weighted average number of common shares
price earnings ratio
market price per share/basic earnings per share
net income
sales revenue - cogs = gross profit
gross profit - operating expenses = income before tax
income before tax - income tax expense = net income
cogs
beginning inventory + purchases = cog available for sale
cog available for sale - ending inventory = cogs
gross profit margin
gross profit/net sales
net sales
sales - sales returns and allowances - sales discounts
profit margin
net income/net sales
accrual basis
transactions are recorded in the period in which the events occur rather than when the company
actually receives cash
cash basis accounting
revenue is recorded when cash is received & expense is recorded when cash is paid
weighted average unit cost
cog available for sale/Units available for sale
bank rec - bank statement
+deposits in transit
-outstanding cheques
+/- bank errors
bank rec - companys books
+EFT collections, interest and other deposits
-EFT payments, service charges and NSF cheques
+/- company errors
straight-line depreciation rate
100%/useful life
FOB destination
seller is responsible (use freight out)
straight-line
cost-residual value/useful life
straight-line depreciation rate
100%/useful life
diminishing balance
(cost - accum. dep.) x depreciation rate(straight-line rate x multiplier)
units-of-production
(cost - residual value)/total estimated units of activity x actual units of activity during year