COMM 200 Study Guide - Midterm Guide: Gross Margin, Current Liability, Cash Flow
Document Summary
Reflects the return that individual investors would recognize for each share of stock that they owned. Identifies to managers the percentage of sales the company has generated that actually represent profit (net income) for the business. Is the difference between the total revenue that an organization receives and the direct expenses it incurs. Gross profit margin represents the amount of money left over from the sale of the organization"s products and/or services, which can then be used to cover other business expenses and meet profit objectives. Revenue product costs material costs labour costs distribution & packing costs = gpm. Quick ratio = cash + marketable securities + ar. Removes from the current ratio those assets that are not easily converted into cash immediately and therefore would take time to generate cash from in the event of a need for immediate cash resources. Used in measuring the solvency and liquidity position of an organization.
