Loading presentation...

Present Remotely

Send the link below via email or IM

Copy

Present to your audience

Start remote presentation

  • Invited audience members will follow you as you navigate and present
  • People invited to a presentation do not need a Prezi account
  • This link expires 10 minutes after you close the presentation
  • A maximum of 30 users can follow your presentation
  • Learn more about this feature in our knowledge base article

Do you really want to delete this prezi?

Neither you, nor the coeditors you shared it with will be able to recover it again.

DeleteCancel

Make your likes visible on Facebook?

Connect your Facebook account to Prezi and let your likes appear on your timeline.
You can change this under Settings & Account at any time.

No, thanks

MGMT 1053: Chapter 14

No description
by

Melissa Newman

on 15 February 2016

Comments (0)

Please log in to add your comment.

Report abuse

Transcript of MGMT 1053: Chapter 14

Chapter 14
Accounting & Financial Statements
The Nature of Accounting
Accounting
The recording, measurement and interpretation of financial information, often used in making business decisions. Accounting is NOT bookkeeping.
Public
CPA: Certified Public Accountant
Can express unbiased opinion of financial statement accuracy
Private
Employed by corporations, government agencies, and other organizations to prepare their financial statements.
Uses of Accounting Information
Internal
Managerial accounting refers to the internal use of accounting statements by managers in planning and directing the course of the organization.
External
Annual Report
The Accounting Equation
Assets = Liabilities + Owner's Equity
Owned items of value
Debts owed to others
Funds contributed to the company
Process of collecting, recording, and analyzing raw data, and it occurs constantly through the business’s life.
Accounting Cycle
1. Examine Docs
2. Record
Transactions
3. Post Transactions
4. Prepare
Statements
Financial Statements
Income Statement ("the bottom line")
Revenues = total amount of money received (or promised) from the sale of goods or services, as well as from other business activities such as investments.
CoGS = Amount of money a firm spent to buy or produce the products it sold during the period to which the income statement applies.
Net income = Total profit (or loss) after expenses have been deducted from revenues.
Balance Sheet ("snapshot")
Current assets = Short-term assets that can be converted to cash within one year.
Long-term assets = Fixed assets represent a commitment of organizational funds for at least one year,
Accounts receivable = money owed to business by its customers.
Current liabilities = Short-term debts that the business must repay within one year.
Accounts payable = money owed to a company’s suppliers for goods and services purchased with credit.
Owner's Equity = owners’ contributions to their business along with income retained to finance continued growth and product development.
Cash Flow Statement
Explains how the company’s cash changed from the beginning of the accounting period to the end. Change in cash is explained in three categories: 1) cash from operating activities; 2) cash from investing activities; and 3) cash from financing activities.
Ratio Analysis
Ratio analysis refers to calculations that measure an organization’s financial health. Financial ratios are used to weigh and evaluate a firm’s operating performance.
Profit Margin

Shows the overall percentage profits earned by the company.
Example: A profit margin of 7.5% means that for every $1 in sales, the business generates 7.5 cents in profits.
ROI
Shows how much income is generated by each $1 the owners have invested.
Example: An ROI of 22.5% means that for every $1 invested by stockholders, the company returned 22.5 cents.
=Net income/Sales
=Net income/Owner's Equity
Shows profitability over a period of time
Full transcript