ACCOUNTING CONCEPTS:-
1. SEPARATE ENTITY CONCEPT – According to this concept, business is considered as a separate legal entity which has its distinct identity separate from its owner. This concept is extremely useful in keeping business affairs strictly free from private affairs of owner. This is the reason why withdrawal by owner from business is treated as drawing.
2. GOING CONCERN CONCEPT – According to this concept, it is assumed that business is established and will continue for a fairly long time in future. This is the reason why while valuing assets of firm current resale value is not taken into account instead depreciation is charge on basis of their expected life.
3. MONEY MEASUREMENT CONCEPT – According to this concept, accounting should necessarily record only those transactions which can be expressed in monetary terms. This is the reason why qualitative facts like change in management are not recorded in books of account.
4. COST CONCEPT – This concept is closely related to going concern concept and emphasizes that asset should be recorded at its cost price and not market price which keeps on changing.
5. DUAL ASPECT CONCEPT – The dual aspect concept states that every business transaction requires recordation in two different accounts. The concept is derived from the accounting equation, which states that: Assets = Liabilities + Equity .The accounting equation is made visible in the balance sheet, where the total amount of assets listed must equal the total of all liabilities and equity.
6. ACCOUNTING PERIOD CONCEPT – According to this concept, accounting should measure transactions at regular intervals for a specified period of time called accounting period. Necessary financial disclosures and reporting need to be made at the end of accounting period which may be quarterly, half-yearly or yearly.
7. MATCHING CONCEPT – This concept is also known as periodic matching of cost and revenue. According to this concept, profits made by business in particular accounting period can be ascertained only when the revenues earned during the period are compared with the expenses incurred in earning the revenue.
Gordon Growth Model plays an important role in determining the intrinsic value of a stock based on a future series of dividends that grow at a constant rate.
ACCOUNTING CONCEPTS:-
1. SEPARATE ENTITY CONCEPT – According to this concept, business is considered as a separate legal entity which has its distinct identity separate from its owner. This concept is extremely useful in keeping business affairs strictly free from private affairs of owner. This is the reason why withdrawal by owner from business is treated as drawing.
2. GOING CONCERN CONCEPT – According to this concept, it is assumed that business is established and will continue for a fairly long time in future. This is the reason why while valuing assets of firm current resale value is not taken into account instead depreciation is charge on basis of their expected life.
3. MONEY MEASUREMENT CONCEPT – According to this concept, accounting should necessarily record only those transactions which can be expressed in monetary terms. This is the reason why qualitative facts like change in management are not recorded in books of account.
4. COST CONCEPT – This concept is closely related to going concern concept and emphasizes that asset should be recorded at its cost price and not market price which keeps on changing.
5. DUAL ASPECT CONCEPT – The dual aspect concept states that every business transaction requires recordation in two different accounts. The concept is derived from the accounting equation, which states that: Assets = Liabilities + Equity .The accounting equation is made visible in the balance sheet, where the total amount of assets listed must equal the total of all liabilities and equity.
6. ACCOUNTING PERIOD CONCEPT – According to this concept, accounting should measure transactions at regular intervals for a specified period of time called accounting period. Necessary financial disclosures and reporting need to be made at the end of accounting period which may be quarterly, half-yearly or yearly.
7. MATCHING CONCEPT – This concept is also known as periodic matching of cost and revenue. According to this concept, profits made by business in particular accounting period can be ascertained only when the revenues earned during the period are compared with the expenses incurred in earning the revenue.
Gordon Growth Model plays an important role in determining the intrinsic value of a stock based on a future series of dividends that grow at a constant rate.
Notes on Attitude & Values in Organisation BehaviorYamini Kahaliya
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Attitude : An attitude is a way of thinking or feeling about something, a certain state of mind at the time.
Leverages one of the most difficult to understand and interpret in financial management.. Here's a short explanation with calculation of financial and operating leverages..
This PPT contains the full detail of topic leverage in financial management
it covers following topics :-
Meaning of Leverage
Types of Leverage
Operating Leverage
Financial Leverage
Difference between Operating & Financial Leverage
Combined Leverage
Illustrations
Exercise
Notes on Attitude & Values in Organisation BehaviorYamini Kahaliya
this document is on Attitudes and values in organisation behavior for BBA/B.com students .
it tells about that how an individual behave in an organisation.
Attitude : An attitude is a way of thinking or feeling about something, a certain state of mind at the time.
Leverages one of the most difficult to understand and interpret in financial management.. Here's a short explanation with calculation of financial and operating leverages..
This PPT contains the full detail of topic leverage in financial management
it covers following topics :-
Meaning of Leverage
Types of Leverage
Operating Leverage
Financial Leverage
Difference between Operating & Financial Leverage
Combined Leverage
Illustrations
Exercise
A breakeven analysis is used to determine how much sales volume your business needs to start making a profit.
The breakeven analysis is especially useful when you're developing a pricing strategy, either as part of a marketing plan or a business plan.
Top of Form 1.Award 8.33 pointsPringle Company distribu.docxturveycharlyn
Top of Form
1.
Award: 8.33 points
Pringle Company distributes a single product. The company’s sales and expenses for a recent month follow:
Total
Per Unit
Sales
$
300,000
$
20
Variable expenses
210,000
14
Contribution margin
90,000
$
6
Fixed expenses
78,000
Net operating income
$
12,000
Required:
1.
What is the monthly break-even point in units sold and in sales dollars? (Omit the "$" sign in your response.)
Break-even point in unit sales
units
Break-even point in sales dollars
$
2.
Without resorting to computations, what is the total contribution margin at the break-even point? (Omit the "$" sign in your response.)
Total contribution margin
$
3.
How many units would have to be sold each month to earn a target profit of $31,200? Use the formula method.
Units sold
4.
Refer to the original data. Compute the company's margin of safety in both dollar and percentage terms. (Round your percentage answer to 2 decimal places. Omit the "$" and "%" signs in your response.)
Dollars
Percentage
Margin of safety
$
%
5.
What is the company’s CM ratio? If monthly sales increase by $61,000 and there is no change in fixed expenses, by how much would you expect monthly net operating income to increase? (Omit the "$" and "%" signs in your response.)
CM ratio
%
Net operating income increases by
$
References
WorksheetLearning Objective: 05-03 Use the contribution margin ratio (CM ratio) to compute changes in contribution margin and net operating income resulting from changes in sales volume.Learning Objective: 05-07 Compute the margin of safety and explain its significance.
Difficulty: EasyLearning Objective: 05-05 Determine the level of sales needed to achieve a desired target profit.
Learning Objective: 05-01 Explain how changes in activity affect contribution margin and net operating income.Learning Objective: 05-06 Determine the break-even point.
2.
Award: 8.33 points
Reveen Products sells camping equipment. One of the company’s products, a camp lantern, sells for $130 per unit. Variable expenses are $91 per lantern, and fixed expenses associated with the lantern total $179,400 per month.
Required:
1.
Compute the company’s break-even point in number of lanterns and in total sales dollars. (Omit the "$" sign in your response.)
Number of lanterns
Total sales dollars
$
2.
If the variable expenses per lantern increase as a percentage of the selling price, will it result in a higher or a lower break-even point? (Assume that the fixed expenses remain unchanged.)
Higher break-even point
Lower break-even point
3.
At present, the company is selling 16,000 lanterns per month. The sales manager is convinced that a 10% reduction in the selling price will result in a 25% increase in the number of lanterns sold each month. Prepare two contribution format income statements, one under present operating conditions, a ...
When should a company simply buy from other companies and resell the products? When should they produce by themselves? I present a costing presentation on this.
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[Note: This is a partial preview. To download this presentation, visit:
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Sustainability has become an increasingly critical topic as the world recognizes the need to protect our planet and its resources for future generations. Sustainability means meeting our current needs without compromising the ability of future generations to meet theirs. It involves long-term planning and consideration of the consequences of our actions. The goal is to create strategies that ensure the long-term viability of People, Planet, and Profit.
Leading companies such as Nike, Toyota, and Siemens are prioritizing sustainable innovation in their business models, setting an example for others to follow. In this Sustainability training presentation, you will learn key concepts, principles, and practices of sustainability applicable across industries. This training aims to create awareness and educate employees, senior executives, consultants, and other key stakeholders, including investors, policymakers, and supply chain partners, on the importance and implementation of sustainability.
LEARNING OBJECTIVES
1. Develop a comprehensive understanding of the fundamental principles and concepts that form the foundation of sustainability within corporate environments.
2. Explore the sustainability implementation model, focusing on effective measures and reporting strategies to track and communicate sustainability efforts.
3. Identify and define best practices and critical success factors essential for achieving sustainability goals within organizations.
CONTENTS
1. Introduction and Key Concepts of Sustainability
2. Principles and Practices of Sustainability
3. Measures and Reporting in Sustainability
4. Sustainability Implementation & Best Practices
To download the complete presentation, visit: https://www.oeconsulting.com.sg/training-presentations
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Discover the innovative and creative projects that highlight my journey through Full Sail University. Below, you’ll find a collection of my work showcasing my skills and expertise in digital marketing, event planning, and media production.
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Improving profitability for small businessBen Wann
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Business Valuation Principles for EntrepreneursBen Wann
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Cracking the Workplace Discipline Code Main.pptxWorkforce Group
Cultivating and maintaining discipline within teams is a critical differentiator for successful organisations.
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3. Introduction
The Breakeven Point
A company's breakeven point is the point at which its sales exactly cover its expenses.
The calculation for the break-even point can be done one of two ways:
• One is to determine the amount of units that need to be sold
• Two is the amount of sales, in dollars, that need to happen.
4. Reason for Calculating Break Even Point
1. The break-even point allows a company to know when it, or one of its products,
will start to be profitable.
2. The calculation should be used when projecting the sale price of an item to be sold
that includes all expected expenses of a business including initial acquisition price
of item (s) purchased to be sold.
3. TO project future income potential if certain sales amounts are reached.
If a business’s revenue is below the break-even point. Then, the company is operating
at a loss.
If it’s above, then it’s operating at a profit.
5. Formulas for Calculating Break-Even Point.
Calculating by Units to be Sold:
BREAK-EVEN POINT (UNITS)
FIXED COSTS ÷ (SALES PRICE PER UNIT – VARIABLE COSTS PER UNIT)
FIXED COSTS ARE: RENT, UTILITIES, AND OTHER COSTS THAT MAY CHANGE
SLIGHTLY.
SALES PRICE PER UNIT: AMOUNT OF MONEY TO BE SET TO SELL A PRODUCT.
VARIABLE COSTS PER UNIT: COSTS THAT CHANGE IN MANUFACTURING OR
PRODUCING A PRODUCT SUCH AS SALARIES, MATERIALS OR INITIAL PURCHASE
PRICE OF A PRODUCT FOR RESELLING.
Total variable costs ÷ Total units produced
6. BREAK-EVEN POINT (SALES DOLLARS)
Formula to Determine Sales Dollars needed to break even.
Fixed Costs ÷ Contribution Margin
Fixed Costs examples as mentioned prior rent, utilities etc.
Contribution Margin: is the difference between the price of a product and
what it costs to make that product.
The calculation is as follows:
(Sale price per unit – Variable costs per unit)/Sale price per unit
7. BREAK-EVEN POINT (SALES DOLLARS)
Fixed Costs ÷ Contribution Margin (Sales price per unit – Variable costs per unit,
with resulting figure then divided by sales price per unit)
$2000/.7333
=$2727
Andy’s team needs to sell $2727 worth Andy’s Energy Drink in a month to break
even. Anything after that amount will be profit.
To confirm this figure: you can take the 1818 units from the first calculation, and
multiply that by the $1.50 sales price, to get the $2727 amount.
8. Business Example for Break-Even Point for
Units to be Sold.
Andy’s Energy Drink: is an energy drink manufacturer in the L.A area.
He is considering introducing a new energy drink and to determine the number of units (items) that
have to be sold in a month to break even.
Projected costs for the first month in production:
Fixed Costs = $2,000 (total, for the month)
Variable Costs = .40 (per can produced)
Sales Price = $1.50 (a can)
Calculating using above figures:
Fixed Costs ÷ (Sales price per unit – Variable costs per unit)
$2000/($1.50 – $.40)
^
Or $2000/1.10=1,818 units
Mr. Andy needs to sell 1,818 units to break even.
9. Conclusion
Break-Even Point calculations for a business are very important for determining
amount of units that need to be sold to meet the fixed expenses of a business. NO
profit or loss calculation.
There are two methods for calculating a Break-Even Point:
BREAK-EVEN POINT (UNITS):FIXED COSTS ÷ (SALES PRICE PER UNIT – VARIABLE
COSTS PER UNIT) Total variable costs ÷ Total units produced to break even.
Break-Even Point (Sales): (Sale price per unit – Variable costs per unit)/Sale price per
unit. Total sales units to be sold to break even.
Use calculation one to determine new price points for a product you want to sell in
order to make a profit.
Use Calculation two determine the amount of sales your business is required to
generate in order to start making a profit.