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What is 1 + 3?
that which is owned by an organization; cash, inventory, store fixtures.
Short term/current assets
converts to cash within a year in the normal operation of business.
Long term/noncurrent assets
cash not converted within a year.
statement of an organizations assets, liabilities, and owner's equity at a particular point in time.
invoice concessions from suppliers for prompt payment
the balance of cash coming into and going out of an organization.
Positive cash flow: more cash is coming into organization than going out
ratio of one part of income statment to another, usually to net sales
used to make comparisons among stores easier and evaluate a departments performance over time
Cost of Goods Sold
=cost of merchandise+shipping+workroom costs-cash discounts
the relationship between current assets and current liabilities
-measures an organization's short term debt paying ability, or ability to pay off current debts with current assets
Current Ratio Equation
=current assets/current liabilities
attributable to a specific unit of business(department)
-includes wages, advertising, rent.
=Net(total) sales+customer returns
statement of performance for a given period of time.
-Components: net revenue, cost of goods sold, gross margin, expenses, net income.
when revenue exceeds expenses
when expenses exceeds revenue
Not directly attributed to a specific unit; utilities, interest on debt.
debts owed by an organization
-classified according to the time in which they are due to be paid
te likelihood of assets conversion to cash
Earnings before taxes
-Can be increased by an increasing sales, gross margin;decreasing cost of goods sold, expenses.
revenue sources which may includ rent from leasing property or interest an accounts receivable.
=gross(total) sales-customer returns
difference between assets and liabilites