chap9 - PTO = Cost of goods sold Avg Accts Pay 7 Acct 284...

Info icon This preview shows pages 1–9. Sign up to view the full content.

View Full Document Right Arrow Icon
1 Acct 284 Chap. 9 CHAPTER 9 Reporting and Interpreting Liabilities
Image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
2 Acct 284 Chap. 9 Current Liabilities Accounts payable Accrued payables Income taxes payable Payroll taxes payable Deferred Revenues Notes Payable (Interest Bearing) Current portion of long-term debt
Image of page 2
3 Acct 284 Chap. 9 Long Term Liabilities Notes Payable Bonds (Chapter 10)
Image of page 3

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
4 Acct 284 Chap. 9 Aren’t Liabilities Bad? Before After Assets 100 200 Liabilities 0 100 Equity 100 100 IBIT 20 40 Interest rate 10% Tax Rate 30% What is the impact on ROE of adding debt?
Image of page 4
5 Acct 284 Chap. 9 Impact on Return on Equity Before After Income before Tax $20 $40 Interest 0 10 Income before tax 20 30 Tax 6 9 Net Income 14 21 Equity 100 100 Return on Equity 14% 21%
Image of page 5

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
6 Acct 284 Chap. 9 Ratio Analysis Current ratio ( liquidity ): CR = Current assets Current liabilities Accounts Payable Turnover Ratio:
Image of page 6
Image of page 7

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
Image of page 8
Image of page 9
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: PTO = Cost of goods sold Avg. Accts. Pay. 7 Acct 284 Chap. 9 Contingent Liabilities-a potential liability that has arisen as a result of a past event probable: likely reasonably possible: chance > remote, < likely remote: chance slight 8 Acct 284 Chap. 9 Cash Flow Effect of Current Liabilities Increases to current liabilities are added to net income in the operating section Decreases to current liabilities are deducted from net income in the operating section 9 Acct 284 Chap. 9 Time Value of Money Interest = P x IR x T PV = Amt (PVF t i ) FV = Amt (FVF t i ) PVA = Pmt (PVAF t i ) FVA = Pmt (FVAF t i ) * Remember to use TIMELINES!!...
View Full Document

{[ snackBarMessage ]}

What students are saying

  • Left Quote Icon

    As a current student on this bumpy collegiate pathway, I stumbled upon Course Hero, where I can find study resources for nearly all my courses, get online help from tutors 24/7, and even share my old projects, papers, and lecture notes with other students.

    Student Picture

    Kiran Temple University Fox School of Business ‘17, Course Hero Intern

  • Left Quote Icon

    I cannot even describe how much Course Hero helped me this summer. It’s truly become something I can always rely on and help me. In the end, I was not only able to survive summer classes, but I was able to thrive thanks to Course Hero.

    Student Picture

    Dana University of Pennsylvania ‘17, Course Hero Intern

  • Left Quote Icon

    The ability to access any university’s resources through Course Hero proved invaluable in my case. I was behind on Tulane coursework and actually used UCLA’s materials to help me move forward and get everything together on time.

    Student Picture

    Jill Tulane University ‘16, Course Hero Intern