profitability Although pride of ownership and career satisfaction are healthy goals, generating profit is the most likely reason you started your business. This guide introduces you to several methods for analyzing your company’s operations and calculating the profitability of your business. What You Should Know Before Getting Started Profitability Ratios • Gross Profit Margin • Operating Profit Margin Ratio • Net Profit Margin Ratio • Other Common Size Ratios 3 4 6 7 7 7 Break-Even Analysis • What
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Part 1 Gross Profit Method Horton, Inc. suffered an inventory loss due to a flood. The following information is available to you. Beginning inventory $100,000 Net purchase 400,000 Sales 400,000 Inventory salvaged from flood 50,000 Instructions Use the gross profit method for estimating inventory to determine the loss due to the flood, assuming (a) gross profit is 25% of sales, and (b) gross profit is 25% of the cost of goods sold. (a) Ending inventory = Beginning inventory
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ANALYSIS AND INTERPRETATION OF FINANCIAL STATEMENTS: CASE STUDIES THESIS SUBMITTED IN PARTIAL FULFILLMENT OF THE REQUIREMENTS FOR THE DEGREE OF Bachelor of Technology in Mining Engineering By SUDIP DAS Roll: 10605038 DEPARTMENT OF MINING ENGINEERING NATIONAL INSTITUTE OF TECHNOLOGY, ROURKELA 2010 ANALYSIS AND INTERPRETATION OF FINANCIAL STATEMENTS: CASE STUDIES THESIS SUBMITTED IN PARTIAL FULFILLMENT OF THE REQUIREMENTS FOR THE DEGREE OF Bachelor of Technology in Mining Engineering
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ANALYSIS AND INTERPRETATION OF FINANCIAL STATEMENTS: CASE STUDIES THESIS SUBMITTED IN PARTIAL FULFILLMENT OF THE REQUIREMENTS FOR THE DEGREE OF Bachelor of Technology in Mining Engineering By SUDIP DAS Roll: 10605038 DEPARTMENT OF MINING ENGINEERING NATIONAL INSTITUTE OF TECHNOLOGY, ROURKELA 2010 ANALYSIS AND INTERPRETATION OF FINANCIAL STATEMENTS: CASE STUDIES THESIS SUBMITTED IN PARTIAL FULFILLMENT OF THE REQUIREMENTS FOR THE DEGREE OF Bachelor of Technology in Mining Engineering By SUDIP
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December 31, 2008. The E Company Income statement for year ending December 31, 2008 Absorption / Contribution Product Information: | | | | | | Units Produced | 400,000 | | Units Sold | 345,000 | | Selling Price per Unit | $19.00 | | Direct Material Cost per Unit | $3.50 | | Direct Labor Cost per Unit | $1.40 | | Variable Selling Costs per Unit | $1.20 | | Fixed Manufacturing Costs | $1,600,000 | | Fixed Selling & Administrative Costs | $1,200,000 | | | |
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Statements Intra-entity Asset Transactions Chapter Outline I. The transfer of assets between the companies forming a business combination is a common practice. The opportunity for such direct acquisition (especially of inventory) is often the underlying motive for the creation of the combination. II. Intra-entity inventory transfers A. The individual accounting systems of the two companies will record the transfer as a sale by one party and as a purchase by the other B. Because the
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Statements Intra-entity Asset Transactions Chapter Outline I. The transfer of assets between the companies forming a business combination is a common practice. The opportunity for such direct acquisition (especially of inventory) is often the underlying motive for the creation of the combination. II. Intra-entity inventory transfers A. The individual accounting systems of the two companies will record the transfer as a sale by one party and as a purchase by the other B. Because the
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accounting for inventory? pA-12 AE evaluates merchandise inventory at the lower of average cost or market, utilizing retail method. Average cost includes merchandise design and sourcing costs and related expenses. AE records merchandise receipts at the time merchandise is delivered to the foreign shipping port by the manufacturer; at this point the title and risk of loss is transferred to the company. 2. For the most recent year, what is the amount of inventory in the balance sheet? What
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merchandise inventory. Inventory is a current asset that will be sold to yield a profit--and the adage "buy low, sell high" is a succinct way to state a merchandiser's profit strategy. In addition to introducing a new asset, we also introduces a new cost category, and a new name for the revenue account. The cost is called Cost of Merchandise Sold (also called Cost of Goods Sold by some companies), and represents the cost of the inventory that was sold during the period. If John purchases 100 units of product
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Records all purchases and sales of goods directly in the Inventory account as they occur. * Perpetual inventory overages and shortages generally represent a misstatement of cost of goods sold. Debi t Inventory over or short, credit Inventory. -Periodic inventory system- records all acquisitions of inventory during the accounting period by debiting the purchases account. Then adds the total in the purchases accounts at the end of the period to the cost of the inventory on hand at the beginning
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