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ACCT 9-12 Managerial Accounting

ACCT 9-12 Managerial Accounting - 1 Evaluating...

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1. Evaluating Profitability a. Gross Profit Ratio = Gross Profit / Net Sales b. Profit Margin Ratio = Net Income / Net Sales c. Reasons gross profit ratios change i. Selling products with a lower mark-up ii. Increased competition can lower sale prices iii. Paying higher prices to suppliers iv. Sales mix Managerial Accounting a field of accounting that provides economic and financial information for managers and other internal users 2. Comparison of Financial and managerial accounting a. Primary Users of reports i. External user, stockholders, creditors and regulators ii. Internal users, officers and managers b. Types and frequency of reports i. Financial statements, quarterly and annually ii. Internal reports, as frequently as needed c. Purpose of Reports i. General purpose ii. Special reports for specific decision d. Content of reports i. Pertains to the business as a whole, highly aggregated (condensed), limited to double entry accounting and cost data, generally accepted accounting principles
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