BUS 082 Lecture Notes - Lecture 30: Inventory Turnover, Income Statement, Quick Ratio
23 Sep 2020
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Liquidity ratios measures a firm"s ability to turn assets into cash to pay its short term debts. Acid -test ratio ( aka: the quick ratio) The information is found on the firm"s balance sheet. Measure how effectively a firm"s managers are using the firm"s various resources to achieve profits. How much income is being generated per sale. Activity ratios measure how effectively management is turning over inventory. This information is found on the firm"s balance sheet and income statement. Finance: the function in a business that acquired funds for a firm and manages them within the firm. Financial management: the job of managing a firm"s resources to meets its goals and objectives. Make sure they are giving credit to the right people. Control function and treasury function: two main functions. Treasury is finding the money and figuring out how to use it. Undercapitalization : not enough money to start with.
