Horizontal Analysis (side-by-side) - ANS compare year to year analysis of each account's dollar
amount changes and percentage changes; dollar change=current year minus previous year;
%change= dollar change/previous year
Vertical Analysis of Balance Sheet - ANS each item is stated as a percent of total assets.
Vertical Analysis of Income Statement - ANS account balance/net sales
ratio analysis - ANS the assessment of a firm's financial condition using calculations and
interpretations of financial ratios developed from the firm's financial statements
current ratio - ANS current assets/current liabilities
acid-test ratio - ANS (Current Assets - Inventory) / Current Liabilities
total asset turnover - ANS net sales/average total assets
A/R turnover - ANS Sales/Average A/R, net
Days' sales uncollected - ANS 365 / A/R Turnover
inventory turnover - ANS COGS/Average Inventory
debt-to-equity ratio - ANS total liabilities/total equity
times interest earned - ANS EBIT/ interest expense
profit margin - ANS net income/net sales
return on assets - ANS net income/average total assets
working capital - ANS current assets-current liabilities
fixed costs - ANS costs that remain constant as output changes
variable costs - ANS costs that vary directly with the level of production
direct costs - ANS Costs that can be specifically identified with a particular project or activity.
indirect costs - ANS Costs that cannot be easily and accurately traced to a cost object.
, schedule of cost of goods manufactured - ANS Direct Materials used
+Direct Labor
+Factory Overhead
=total manufacturing cost
+beginning WIP
-ending WIP
=COGM
direct labor - ANS the work of factory employees that can be physically and directly associated
with converting raw materials into finished goods
indirect labor - ANS The labor costs of janitors, supervisors, materials handlers, and other
factory workers that cannot be conveniently traced to particular products.
prime cost - ANS Direct Materials + Direct Labor
factory overhead - ANS manufacturing costs that are not raw material or direct labor costs
(depreciation, rent, insurance, utilities, etc.)
Inventory to COGS - ANS Raw material inventory+purchases-RM used(also called DM)=ending
RM inventory
WIP beginning+DM+DL+FOH-Ending WIP=COGM
Finished Goods+COGM-Ending Finished Goods=COGS
total quality management - ANS managing the entire organization so that it excels on all
dimensions of products and services that are important to the customer
process cost - ANS the total cost incurred in producing and delivering outputs
job costs - ANS customizable
build to order - ANS manufacturing a product only when there is an order from a customer
Predetermined Overhead Rate - ANS estimates cost of a job and is calculated by
total estimate overhead/total estimated activity base
raw materials to WIP - ANS WIP Inventory $$
RM inventory $$
Direct labor to WIP - ANS WIP inventory $$
------S&W Payable $$
Indirect materials to overhead - ANS FOH............$$
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