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WorksheetsES 37- Chapter 1
Total questions: 25
Worksheet time: 16mins
(a) are those associated with sales volume, selling price, and introductory marketing expense and are the most significant.
_____________is intended to keep a plant running well, so these projects usually do not affect profits.
Cost Savings
Capacity Increase
Maintenance
Product Upgrade
____________ are intended to increase sales or to keep a product competitive.
Capacity Increase
Product Upgrade
Cost Savings
Product Increase
When a company cannot make enough product for Sales to sell or when it anticipates missed sales in the near future, it would increase its production capacity.
Product Increase
Cost Savings
Capacity Increase
Product Upgrade
Once costs are lower, Sales may be able to drop the selling price, thereby increasing volume and profits.
Maintenance Work
Cost Savings
Product Upgrade
Capacity Increase
WHAT IS CASH FLOW?
When a company invests capital in a project, the money either can't be borrowed
When deciding whether it can afford to invest money, a company must go through the same thought process that we as individuals go through when making a similar decision.
This is what it costs to make a company’s products. It is comprised of production costs and general expenses. Production costs include raw material costs, packaging material costs, manufacturing costs, warehousing costs, and product delivery costs. General expenses includes costs for research and development, marketing, sales, and corporate administration.
Most companies borrow money when they do not have enough cash to fund all the investments they wish to make. These companies carry short-term and long-term loans requiring the payment of interest.
(a) is the net financial result of a company’s operating strategies and plans
Bajkowski describes the three cash flows
Operating cash flow
Investing cash flow
Financing cash flows
Free Cash Flow
_____________________ are associated with how a company uses cash to pay down debt or to borrow more cash (to finance operating and investing), to pay dividends to its shareholders, or to buy back some of its stock
Investment Cash Flow
Free Cash flow
Operating Cash Flow
Financial Cash Flow
A company may decide to buy another company, a brand name, or a proprietary process.
Acquisitions
Capital Investment
Asset Sales
Investing Gains and Loss
Two main expenses exist:
Product Cost
Investment Cost
Expense Cost
Interest Cost
This is what it costs to make a company’s products. It is comprised of production costs and general expenses.
Product Cost
Expense Cost
Interest Cost
Investment Cost
_____________ includes raw material costs, packaging material costs, manufacturing costs, warehousing costs, and product delivery costs. General expenses includes costs for research and development, marketing, sales, and corporate administration.
Product Cost
Interest Cost
Expense Cost
Investment Cost
Most companies borrow money when they do not have enough cash to fund all the investments they wish to make. These companies carry short-term and long-term loans requiring the payment of interest.
Product Cost
Interest Cost
Investment Cost
Expense Cost
A company pays several kinds of taxes: (US)
Income Taxes
Property Taxes
Foreign Taxes
United States Taxes
Companies doing business outside the U.S. must pay taxes to the governments where they do business. Tax laws vary from country to country. When a company pays foreign taxes, it gets a tax credit against its U.S. taxes.
US Taxes
Income Taxes
Foreign Taxes
Property Taxes
are tax-advantaged write-off methods dealing respectively with capital investments and the acquisition-associated goodwill.
Working Capital Changes
Depreciation
Amortization
After Tax Profit
________________is what is left when a company deducts expenses and taxes from income. Income is made up of sales (the cash brought in from selling a company’s products) and other miscellaneous items.
After Tax Profit
Income Taxes
Foreign Taxes
Amortization
a company may choose to sell an asset that it previously purchased (e.g., land, a building, a machine, a brand).
Asset Sales
Working Capital Change
Capital Investments
_______________ is the raw materials, packaging materials, work in process and finished product owned by or in the control of a company.
Accounts receivable
Accounts payable
Inventories
Asset Sales
This helps ensure that it spends money doing the things it has defined as important.
(a)
(a) fund people costs plus the purchase and installation of capital facilities such as buildings, process equipment, utilities, and so o
These upgrade a plant’s basic systems to make them safer (for both its employees and the community) or to reduce the type or amount of emissions from the plant. New regulations or a company’s desire to better protect its employees and the community provide the driving force for these projects.
Maintenance Improvements
Health Improvements
Safety Improvements
Environmental Improvements
These can involve any number of things — labor productivity increases, yield improvements (loss reductions), utility savings, maintenance cost reductions, in-freight cost savings, or distribution (shipping) cost reductions.
Cost Reduction
Product Cost
Maintenance Work
Capacity Increase
(a) is simply getting company agreement to proceed with a project.
