4 average per unit sales 34 chart 35 defined 176

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Unformatted text preview: the burden is an extra $100. Acceptable payroll burden rates vary by market, by industry, and by company. Personnel burden Payroll burden. See above description. Plant and equipment This is the same as long-term, fixed, or capital assets. Product development Expenses incurred in development of new products (salaries, laboratory equipment, test equipment, prototypes, research and development, etc.). Profit before interest / taxes This is also called EBIT, for Earnings Before Interest and Taxes. It is gross margin minus operating expenses. R Receivables turnover Sales on credit for an accounting period divided by the average accounts receivables balance. Retained earnings Earnings (or losses) that have been reinvested into the company, not paid out as dividends to the owners. When retained earnings are negative, the company has accumulated losses. Return on assets Net profits divided by total assets. A measure of profitability. Return on investment Net profits divided by net worth or total equity; yet another measure of profitability. Also called ROI. Return on sales Net profits divided by sales; another measure of profitability. ROI Return on investment; net profits divided by net worth or total equity, another measure of profitability. HURDLE: THE BOOK G.6 ON BUSINESS PLANNING S Sales break-even The sales volume at which costs are exactly equal to sales. The exact formula is: =Fixed_costs/(1-(Unit_Variable_Cost/Unit_Price)) Sales on credit Sales made on account; shipments against invoices to be paid later. Short term Normally used to distinguish between short-term and long-term, when referring to assets or liabilities. Definitions vary because different companies and accountants handle this in different ways. Accounts payable is always a short-term liability, and cash, accounts receivable and inventory are always short-term assets. Most companies call any debt of less than five-year terms short-term debt. Assets that depreciate over more than ve years (e.g., plant and equ...
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This note was uploaded on 01/26/2014 for the course BUINESS 102 taught by Professor Unknown during the Winter '09 term at University of Phoenix.

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