What is the difference between a Working Capital turnover ratio and inventory turnover ratio in accounting? Working capital turnover ratio indicates a company’s effectiveness in using its working capital (total amount of current assets) it is also referred to as net sales to working capital
The average working capital is drawn by adding the beginning amount to ending working capital then dividing by two. Working capital is equal to the difference between current assets and current liabilities:
Roster turnover quotient is a ratio that processes how operative a corporation is laying its inventory resources to work generating sales. A low revenue percentage may indicate that a firm is carrying obsolete goods in inventory or its speculation in account is extreme.
Friday, March 18, 2011
Monday, March 7, 2011
What Is Accounting?
Accounting and working in an office environment go hand in hand. Without accounting, no one would get paid, and no one would receive a bill for services rendered. But that is not everything that has to do with accounting. They watch profits, expenses and more importantly, when a company is losing profits. Unless you run your own business, you need accountants to tell you where your business is financially.
Accounting can be as simple as balancing a checkbook. Every child faces accounting situations in their life, from saving their allowances, to spending their allowances, and everything in between. This is accounting.
How is accounting crucial to other types of business? Farmers succeed or fail with accounting. Farms are based upon borrowing money to plant, and paying it back with the harvest. Accounting tracks whether there was enough crops in the year to pay back the loan, or whether the farmer needs to carry that loan over to the next year, where accounting starts all over again, this time with interest.
Accounting keeps us out of financial trouble, whether we are a business or a household. If you don't know how much you are bringing in, how much you are spending, how much is going out, things could get extremely ugly. This lack of accounting practices can lead to unnecessary fees and charges.
Bottom line, accounting is information. This information forms the balance sheet, the profit and loss statement, and the income statement.
Accounting can be as simple as balancing a checkbook. Every child faces accounting situations in their life, from saving their allowances, to spending their allowances, and everything in between. This is accounting.
How is accounting crucial to other types of business? Farmers succeed or fail with accounting. Farms are based upon borrowing money to plant, and paying it back with the harvest. Accounting tracks whether there was enough crops in the year to pay back the loan, or whether the farmer needs to carry that loan over to the next year, where accounting starts all over again, this time with interest.
Accounting keeps us out of financial trouble, whether we are a business or a household. If you don't know how much you are bringing in, how much you are spending, how much is going out, things could get extremely ugly. This lack of accounting practices can lead to unnecessary fees and charges.
Bottom line, accounting is information. This information forms the balance sheet, the profit and loss statement, and the income statement.
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