accounting Flashcards
(17 cards)
internal stakeholders (management accounting)
- includes managers, employees, owners
- information used to support business decision making
- no rules for information provision
- can include budgets, forecasts, sales reports
external stakeholders (financial accounting)
- includes shareholders, creditors, government
- communicates entity’s performance and financial position
- must follow Australian accounting standards board
- includes balance sheet, income statement, statement of cashflows
Shareholder approach
focus on improving shareholder value by enhancing the firm’s earning; increasing the market value of its shares, and increasing the amount or frequency of the dividend paid
Stakeholder approach
aim to maximise ALL stakeholder’s value, not just its shareholders’; commitment to corporate responsibility through Corporate Social responsibility (CSR) reporting and commitment to Sustainable Development Goals (SDGs)
total contribution margin (cm)
total sales revenue - total variable costs
contribution margin per unit (cmu)
sales revenue per unit - variable costs per unit
break even
= total fixed costs/CMU
B/E can can be determined when CM=fixed costs
NPV
NPV = - initial investment + the sum of all discounted net future cash flows
Discounted net future cash flow = annual net cash flow × discounted rate
strait line depreciation
Depreciation expense = depreciable base/useful life
Depreciable base = purchase price –residual value
return on assets
profit/total assets x 100
return on equity
profit/average owners equity x 100
profit margin
Profit /sales x 100
gross profit margin
(sales - cost of goods sold) / sales x 100
inventory turnover
Cost of goods sold / average inventory
debtors turnover
Sales / average accounts receivable
Target profit
Target sales/target value = (Total fixed costs + Target Profit)/CMU
required units
TFC+TP/CMU
