Relationships among Profitability Measures Notes
Return on Common Stockholders Equity Ratio
A widely used measure of profitability from the common
stockholders viewpoint is the return on common
stockholders equity ratio (ROE). This ratio shows how many
Customer Value Map - JC Penney
On Par with
SA: BA from Waterloo. Worked on banner ads which were bought on by Google
2005 in Toronto did MBA. 2007 graduated and became a management consultant and then worked for
Then started entrepreneur, with no ideas, but with handful partners.
Basic Concepts of AIS Notes
Accounting information system (AIS) collects and processes
transaction data and communicates financial information to
All steps in the accounting cycle.
Documents that provide evidence of transactions
Future of IFRS Notes
The definitional structure of assets, liabilities, equity, revenues,
expenses may change over time as the IASB and FASB evaluate
their overall conceptual framework for establishing accounting
standards. In addition, high-quality i
Effects of Special Journals on General Journal Notes
Special journals substantially reduce the number of
entries that companies make in the general journal.
Only transactions that cannot be entered in a special
journal are recorded in the general journal.
Accept an Order at a Special Price Notes
Sometimes a company may have an opportunity to obtain
additional business if it is willing to make major price
concessions to a specific customer.
An order at a special price should be accepted when the
INCREMENTAL ANALYSIS Notes
Incremental Analysis Approach
How Incremental Analysis Works
Types of Incremental Analysis
Accept an Order at a Special Price
Make or Buy
Sell or Process Further
Retain or Replace Equipment
Eliminate an U
Asset Turnover Ratio Notes
The other factor that affects the return on assets ratio is
the asset turnover ratio.
This ratio measures how efficiently a company uses it assets
to generate sales.
Asset Turnover Ratio
Average total assets
How Incremental Analysis Works Notes
Business decisions involve a choice among alternative
courses of action.
The process used to identify the financial data that change
under alternative courses of action is called incremental
In some cases, bo
Alternative Accounting Methods Notes
Variations among companies in the application of GAAP may
For example, one company may use the FIFO method of
inventory costing, while another company in the same
industry may use LIFO. If the inv
Limited Resources Notes
When a company has limited resources (floor space, raw
materials, or machine hours), management must decide
which products to make and sell in order to maximize net
In an allocation of limited resources decision, it is nece
Price earnings Ratio Notes
The price-earnings ratio (P-E ratio) is an oft-quoted
statistic that measures the ratio of the market price of each
share of common stock to the EPS.
The P-E ratio is a reflection of investors assessments of a
companys future ea
Sales Mix CVP Analysis Notes
One of the assumptions of CVP analysis (discussed in
Chapter 5) is that if more than one product is involved, the
sales mix of the products remains constant.
Sales mix is the relative combination in which a companys
Times Interest Earned Ratio Notes
The times interest earned ratio (also called interest
coverage) indicates the companys ability to meet interest
payments as they come due.
Times Interest Earned Ratio
Income before interest
expense and income taxes
Sell or Process Further Notes
Many manufacturers have the option of selling products at a
given point in the production cycle or continuing to process
with the expectation of selling them at a higher price.
The sell-or-process further decision should be m
Norms: Increasing Efficiency in meeting duration
Assignment 1- Strategy 1:
Tar! The final product should be done by Jan 23 rd.
Requirements of the assignment, THURSDAY, FRIDAY and SATURDAY
10-page double space, 4 sections
Next Meeting: Poin