An important tool in predicting the volume of activity, the costs to be incurred, the sales to be earned, and the profit to be received is: A. Target income analysis. B. Cost-volume-profit analysis. C. Least-squares regression of costs. D. Variance analysis.
Do historical betas provide good measures of the future riskiness of firms (or divisions)? 3. Using the computed beta, find the cost of equity, the weighted average cost of capital (WACC), and the hurdle rate for the company. Discuss the negative impact of the added premium to the cost of capital. 4.
Ensure currency, reliability and validity of data. 4. Classify and code the data according to accounting and organisational principles. 5. Calculate costs, profit and loss and/or breakeven analysis etc where necessary.
3. You could alternatively explore how different fiscal policies have affected your chosen business P5 2 Your report should include an extensive analysis on how the internal operations of the business has been affected by the economic changes you outlined earlier. You should explain how key activities of the business have been affected such as: 1. Operations 2. Human resources 3.
Among them, critical accounting estimates includes: Sales revenue, Receivables, and sales incentive, and bad debt expense. 1b. What dose Pepsi say in Footnote 2 about its use of accounting estimates? What risk do these estimates pose for the auditor? The preparation of our consolidated financial statements in conformity with generally accepted accounting principles requires us to make estimates and assumptions that affect reported amounts of assets, liabilities, revenues, expenses and disclosure of contingent assets and liabilities.
Answer: FALSE Diff: 1 LO: 1-1 EOC: QC1-1 AACSB: Reflective Thinking Learning Outcome: Define and use cost-volume-profit analysis to analyze the effects of changes in costs and volume on a company's profits 5) Planning, directing, and controlling are a manager's three primary responsibilities. Answer: TRUE Diff: 1 LO: 1-1 EOC: QC1-1 AACSB: Reflective Thinking Learning Outcome: Define and use cost-volume-profit analysis to analyze the effects of changes in costs and volume on a company's profits 6) Managerial accounting develops reports that help internal parties effectively and efficiently run the company. Answer: TRUE Diff: 1
The computation of ratios facilitates the comparison of firms which differ in size. Ratios can be used to compare a firm's financial performance with industry averages. In addition, ratios can be used in a form of trend analysis to identify areas where performance has improved or deteriorated over time. Because Ratio Analysis is based upon Accounting information, its effectiveness is limited by the distortions which arise in financial statements due to such things as Historical Cost Accounting and inflation. Therefore, Ratio Analysis should only be used as a first step in financial analysis, to obtain a quick indication of a firm's performance and to identify areas which need to be investigated further Profitability.
P7 Solvency is when a business is able to pay is expenses as it has money available within the business. To determine solvency, businesses can use ratios such as current ratio and acid test ratio. These ratios allow businesses and potential investors to see how well that are able to meet their liabilities. Current Assets Current ratio = Current liabilities The acid test ratio shows the assets compared to liabilities, like the current ratio, but by taking out the stock figure from the current assets, it shows how well a business can meet its liabilities without having to sell stock, Current assets - stock Acid test ratio = Current liabilities Profitability Ratios can also show how profitable a business really is either as a snapshot or over time. There are three ways of working out how profitable a business really is: * Gross profit percentage – This calculation shows gross profit as a percentage of the turnover.
A major accounting contribution to the managerial decision-making process in evaluating possible courses of action is to | | a) | assign responsibility for the decision. | | | b) | determine the amount of money that should be spent on a project. | | | c) | decide which actions that management should consider. | | | d) | provide relevant revenue and cost data about each course of action. | Question 2 | | 0 / 1 point | Which is the first step in the management decision-making process?
The financial planner should analyze your information to assess your current situation and determine what you must do to meet your goals. Depending on what services you have asked for, this could include analyzing your assets, liabilities and cash flow, current insurance coverage, investments or tax