Current Asset Introduction Classification Current (short- Noncurrent term)Assets (Long-Term) Assets Resources or claims to resources that are Resources or claims expected to be sold
Income Measurement Concepts Illustration Facts: Company with$100,000 in cash Buys condo for$100,000 Rents condo for $12,000 per year End of the first year: Condo valued at
Return on Invested Capital Importance of Joint Analysis Joint analysis is where one measure is assessed relative to another Return on invested capital (ROI) is an important joint analysis
Short-Term Forecasting Objective and Users Main objective is analysis of liquidity Sufficient cash to effectively operate Ability to service short-term debt Liquidity is of interest to both internal and external users Managers(cash for operations) Creditors (loan safeguards) Investors(return implications) Auditors( going concern analysis) Numerous others