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Accounting: Difference between revisions
→Accounting for a New Business 2: adding links to Finnish Wikipedia
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::in managerial economics, is a form of cost accounting. It is a simplified model, useful for elementary instruction and for short-run decisions. ( Wikipedia ) | ::in managerial economics, is a form of cost accounting. It is a simplified model, useful for elementary instruction and for short-run decisions. ( Wikipedia ) | ||
* '''[[w:Contribution margin]]''' | * '''[[w:Contribution margin]]''' ( [[w:fi:Katetuottolaskenta]] ) | ||
::In [[w:cost-volume-profit analysis]], a form of [[w:management accounting]], '''contribution margin''' is the marginal profit per unit sale. It is a useful quantity in carrying out various calculations, and can be used as a measure of [[w:operating leverage]]. Typically, high contribution margins are prevalent in the labour-intensive tertiary sector while low contribution margins are prevalent in the capital-intensive industrial sector.n ( Wikipedia ) | ::In [[w:cost-volume-profit analysis]], a form of [[w:management accounting]], '''contribution margin''' is the marginal profit per unit sale. It is a useful quantity in carrying out various calculations, and can be used as a measure of [[w:operating leverage]]. Typically, high contribution margins are prevalent in the labour-intensive tertiary sector while low contribution margins are prevalent in the capital-intensive industrial sector.n ( Wikipedia ) | ||
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* '''[[w:Margin_of_safety_(accounting)#Margin_of_Safety|Margin of safety]]''' represents the strength of the business. It enables a business to know what is the exact amount it has gained or lost and whether they are over or below the break even point. ( Wikipedia ) | * '''[[w:Margin_of_safety_(accounting)#Margin_of_Safety|Margin of safety]]''' represents the strength of the business. It enables a business to know what is the exact amount it has gained or lost and whether they are over or below the break even point. ( Wikipedia ) | ||
* '''[[w:Operating leverage]]''' is a measure of how revenue growth translates into growth in operating income. Leverage, and of how risky (volatile) a company's operating income is. ( Wikipedia ) | * '''[[w:Operating leverage]]''' ( [[w:fi:Velkavipu]] ) is a measure of how revenue growth translates into growth in operating income. Leverage, and of how risky (volatile) a company's operating income is. ( Wikipedia ) | ||
::Homework: ex. 4,5,6,7 | ::Homework: ex. 4,5,6,7 | ||
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* The '''[[w:current ratio]]''' is a [[w:financial ratio]] that measures whether or not a firm has enough resources to pay its debts over the next 12 months. It compares a firm's [[w:current asset]]s to its [[w:current liabilities]]. ( Wikipedia ) | * The '''[[w:current ratio]]''' is a [[w:financial ratio]] that measures whether or not a firm has enough resources to pay its debts over the next 12 months. It compares a firm's [[w:current asset]]s to its [[w:current liabilities]]. ( Wikipedia ) | ||
* The '''Acid-test''' or '''[[w:quick ratio]]''' or '''liquid ratio''' measures the ability of a company to use its ''near cash'' or quick assets to extinguish or retire its [[w:current liability|current liabilities]] immediately. Quick assets include those [[w:current asset]]s that presumably can be quickly converted to cash at close to their [[w:book value]]s. ( Wikipedia ) | * The '''Acid-test''' or '''[[w:quick ratio]]''' or '''liquid ratio''' ( [[w:fi: Maksuvalmiussuhde]] ) measures the ability of a company to use its ''near cash'' or quick assets to extinguish or retire its [[w:current liability|current liabilities]] immediately. Quick assets include those [[w:current asset]]s that presumably can be quickly converted to cash at close to their [[w:book value]]s. ( Wikipedia ) | ||
* '''[[w:Return on investment]]''' ('''ROI''') is the concept of an [[w:investment]] of some resource yielding a benefit to the investor. As a performance measure, it is used to evaluate the efficiency of an investment or to compare the efficiency of a number of different investments. ( Wikipedia ) | * '''[[w:Return on investment]]''' ('''ROI''') is the concept of an [[w:investment]] of some resource yielding a benefit to the investor. As a performance measure, it is used to evaluate the efficiency of an investment or to compare the efficiency of a number of different investments. ( Wikipedia ) | ||
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=== Further learning === | === Further learning === | ||
: [[w:analysis#Business|Business and investment analyses]]:''' | : '''[[w:analysis#Business|Business and investment analyses]]:''' | ||
:# [[w:Financial statement analysis|Financial statement analysis]] – the analysis of the accounts and the economic prospects of a firm | :# '''[[w:Financial statement analysis|Financial statement analysis]]''' – the analysis of the accounts and the economic prospects of a firm | ||
:# [[w:Fundamental analysis|Fundamental analysis]] – a stock valuation method that uses financial analysis | :# '''[[w:Fundamental analysis|Fundamental analysis]]''' – a stock valuation method that uses financial analysis | ||
:# [[w:Technical analysis]] – the study of price action in securities markets in order to forecast future prices | :# '''[[w:Technical analysis]]''' ( [[w:fi: Tekninen analyysi]] ) – the study of price action in securities markets in order to forecast future prices | ||
:# [[W:Business analysis|Business analysis]] – involves identifying the needs and determining the solutions to business problems | :# '''[[W:Business analysis|Business analysis]]''' – involves identifying the needs and determining the solutions to business problems | ||
:# [[w:Price analysis|Price analysis]] – involves the breakdown of a price to a unit figure | :# '''[[w:Price analysis|Price analysis]]''' – involves the breakdown of a price to a unit figure | ||
:# [[w:Market analysis|Market analysis]] – consists of suppliers and customers, and price is determined by the interaction of '''[[w:supply and demand]]''' ( Wikipedia ) | :# '''[[w:Market analysis|Market analysis]]''' – consists of suppliers and customers, and price is determined by the interaction of '''[[w:supply and demand]]''' ( Wikipedia ) | ||
:build upon understanding of accounting and business math terminology and procedures. | :build upon understanding of accounting and business math terminology and procedures. | ||
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