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Exam (elaborations)

Longitudinal IV - Exam 1 Questions & answers

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Longitudinal IV - Exam 1 Questions & answers

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  • June 30, 2024
  • 28
  • 2023/2024
  • Exam (elaborations)
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Longitudinal IV - Exam 1
list 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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