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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
=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.
- Winter '09