ADPR5910 Exam 2 Lecture Notes 4

ADPR5910 Exam 2 Lecture Notes 4 - ADPR5910 Notes 3/3/2011...

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ADPR5910 Notes 3/3/2011 Budgetary Controls and Financial Statements - Fixed o Dependent on yearly activities - Flexible Preparing a Budget - Budget conservatively for income, liberally for expenses - Know what the competition’s doing - Be a historian o How budgets have been built in the past in the organization - Embrace intuition Financial Ratios - Gross profit margin o Sales o Cost of goodsSales - Profit margin o Net IncomeSales o Return on sales - Return on equity o Net IncomeOwner'sequity o How much a firm is earning on its investment - Revenue per employee o Total Revenuenumber of employees o Financial Health - Economic Value Added (EVA) - Earnings before interest, taxes, depreciation, and amortization (EBITADA) o Makes financial health look better than it is o Shows available cash before all of these aspects (excludes key costs that go into the orgs functioning) o Unrealistic o Depreciation: decline of value over time - Pro forma earnings o Questionable measure of financial health o Excludes nonrecurring expenses
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ADPR5910 Exam 2 Lecture Notes 4 - ADPR5910 Notes 3/3/2011...

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