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Gross profit ratio (GP ratio) is the ratio of gross profit to net sales expressed as a percentage. It expresses the relationship between gross profit and sales. Components: The basic components for the calculation of gross profit ratio are gross profit and net sales.Net sales means that sales minus…
Gross Profit Analysis (GP Analysis): After studying this chapter you should be able to: Gross profit is the difference between the cost of goods sold and sales. Since the adherence of the actual…
Liquid or Liquidity Ratio / Acid Test or Quick Ratio: Definition: Liquid ratio is also termed as "Liquidity Ratio", "Acid Test Ratio" or "Quick Ratio". It is the ratio of liquid…
Definition of net profit ratio: Net profit ratio is the ratio of net profit (after taxes) to net sales. It is expressed as percentage. Components of net profit ratio: The two basic…
Learning Objective of the article: Define and explain production budget. Prepare a production budget.(Formula and format) Definition and Explanation of Production Budget: The production budget is prepared after the sales budget. The production budget(budget…
Sales Budget: Learning Objectives: Define and explain sales budget. Give and example of sales budget. Contents: Definition and explanation of sales budget Example Definition and Explanation: A sales budget is a detailed schedule showing…
Master Budget: Learning Objective of the Article: Define and explain the term "master budget". What are the parts / components of master budget? What are its advantages and disadvantages? Give example…
History of Managerial Accounting: Managerial accounting has its roots in the industrial revolution of the 19th century. During this early period, most firms were tightly controlled by a few owner-managers who…
Need for Managerial Accounting Information: Learning objectives of this article: What is the need of managerial accounting in organizations and business firms? Every organization - large and small-has managers. Someone must be…
What is Managerial Accounting: Learning objectives of this article: What is managerial accounting? What are functions of managerial accounting? Managerial accounting is concerned with providing information to managers that is, people…
Introduction to Managerial Accounting: After studying this chapter you should be able to: Identify the major differences and similarities between financial and managerial accounting. Understand the role of management accountants in an…
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