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b_found_outline - Business Foundations Final Exam Review...

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Business Foundations: Final Exam Review Material Ratio Analysis I. Return on Equity A. Is a measure of how efficiently the company is using the owner’s investments to make a profit; shows Profitability 1. The higher the number the better B. Formula: Profit divided by Amount Invested II. Return on Assets A. Is a measure of how efficiently the company uses assets to generate money; shows Profitability 1. The higher the number the better B. Formula: Net Income divided by Total Assets III. Return on Sales A. Is a measure of how efficiently the company generates profit/dollar of sales; shows Profitability 1. The higher the number the better B. Formula: Net Income divided by Sales Revenue IV. Current Ratio A. Is a measure of how efficiently the company generates cash to pay bills when they are due; shows Liquidity 1. The higher the number the better B. Formula: Current Assets divided by Current Liabilities V. Debt to Equity Ratio A. Is a measure of how much borrowing the company has; shows Liquidity 1. Is comparing the debt that the company has to the owner’s investment. 2. The lower the number the better 3. High ratios indicate a bankruptcy threat B. Formula: Total Liabilities divided by Total Owners Equity

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Business Simulation I. Rehearsal Simulation II. On-line Tutorials Chapter 1: Introduction to Accounting and Business A. Types of Organizations B. The Role of Accounting in Business C. Role of Ethics in Accounting and Business D. GAAP E. FASB F. SEC G. IASB H. Business Entity Concept I. Cost Concept J. Accounting Equation K. Recording Transactions L. Financial Statements Chapter 2: Analyzing Transactions A. T Accounts B. Recording Transactions C. Chart of Accounts D. Double-entry Accounting System
E. Types of Accounts

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This note was uploaded on 07/22/2011 for the course WCOB 1023 taught by Professor Sandeepgoyal during the Spring '08 term at Arkansas.

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b_found_outline - Business Foundations Final Exam Review...

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