COMM 200 Chapter Notes - Chapter 14: Quick Ratio, Three Steps, Inventory Turnover
Document Summary
Sales revenue - dollar amount the organization has received as a result of selling its products: 2. Costs of goods sold - expenses that are directly incurred in the manufacturing of a product: 3. Gross profit margin - difference between total revenue and the direct expenses: 4. General operating expenses - indirect expenses that must be paid, they include administrative expenses, marketing, and operational overhead: 5. Earnings before interest and taxes - determined by subtracting general operating expenses from gross profit margin: 6. Interest expense - interest payments that the organization is obligated to pay on debt: 7. Earnings before taxes - amount of earnings produced before taxes: 8. Net profit or loss - the firm"s profit or loss from the sale of its product. Statement of cash flows: the statement of cash flows provides managers with a full understanding of the total movement of cash into and out of the business.