Financial
Understanding The Break Even Formula
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Break Even Formula
Recall the formula to calculate a company's break-even point is;
Break Even in Units =
Activity Ratios - Examples and Formulas
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ACTIVITY RATIOS:
The second classification of ratios are known as the Activity Ratios. Activity Ratios indicate how much a company has invested in a particular type of asset (or group of assets), relative to the revenue the asset is producing. The most common activity ratios include; the average collection period and the inventory turnover ratio. Lets look at each separately; beginning with the average collection period ratio.
The Break-Even Point when selling multiple products
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Break-even Point for Businesses Selling Multiple Products
Break-Even Point in units - Examples and Formulas
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Break-even Example Using Questions & Answers
How to Calculate Excess Cash on the Cash Flow Statement
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4. EXCESS CASH (DEFICIENCY)
Excess Cash (deficiency) is calculated by subtracting the cash outflows from the cash inflows. If a positive figure results, then the company is considered to have excess cash (IE more cash is coming into the company than is leaving the company).
If, however, a negative figure results, then the company is considered to have a cash deficiency (I.E. more cash is leaving the company than is coming into the company). Below illustrates the monthly forecasted Cash Excess (Deficiency) for Red Deere Electronics.
Equity of Proprietors, Partnerships and Corporations on the Balance Sheet
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EQUITY (fourth component of the Balance Sheet)
To date, we have discussed the Heading component of the balance sheet, the Asset component of the balance sheet, and the Liability component of the balance sheet. The fourth and final component of the balance sheet is known as Equity.
Summary of the Income Statement - Year end Issues
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INCOME STATEMENT SUMMARY:
How to Calculate the Financing Required for a Business
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5. FINANCING REQUIRED
Financing is required when a company has a cash deficiency in any month. As shown above, Red Deere Electronics is forecasting a cash deficiency of $2,000 in April, 200X. Therefore, the company must acquire some form of financing to assist them in paying their April obligations (expenses). Below illustrates the forecasted financing required by Red Deere Electronics.
Step 1 for calulating a Weighted Average - list product lines
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STEP 1 - CREATE A LIST OF YOUR PRODUCT LINE
The first task required in determining your weighted averages is to create a list of your planned product line. A Product Line is a major grouping of similar products. For instance, the product line for a furniture store might include; sofas, dining room sets, chairs, stereos, televisions, and beds. A car dealership's product line might include trucks, cars, and jeeps. Avon's product line includes cosmetics, jewelry, and household products.
Example of Bad Debt Expense and Forecasting
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Bad Debt Expense note to the financial statements
This note will tell the reader the rate or percentage at which you feel customers will default on "payment for purchases" from your company. An example of a bad debt expense note is as follows.
Bad Debt Expense:
The XYZ company is forecasting 5% of total sales will be bad debt. Moreover, the total amount of bad debt for each year, appearing on the 200X and 200Y forecasted income statement, is as follows;