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Accounting Profit is a company's sum total earnings, computed according to Generally Accepted Accounting Principles (GAAP), and involves the explicit costs of operating business, like interest, depreciation and taxes.
Accounting profits tend to be more than economic profits as they skip some implicit costs, like opportunity costs. For instance, if you invest $100,000 to establish a business and gained $120,000 in profit then your accounting profit would be $20,000. Economic profit would put in implicit costs; like the opportunity cost of $50,000 should you have been employed in its place during that particular period. As shown by this, you would have an economic loss of $30,000 i.e. $120,000 - $100,000 - $50,000).
Financial Perspective How do we produce value for our shareholders? This perspective covers traditional measures e.g. growth, liability, shareholder value. But these are set on
Explain TWO limitations of using accounting ratios to assess the performance of a firm and suggest how each limitation may be improved
How do the different cost classifications can assist the management
Q. Show the Pricing during market growth? Pricing during market growth: in the growth stage there is steep rise in the turnover of the company. As prices of new competitors
what is the topic about? what are the practical implications? what are the practical criticisms?
Steady state condition In many cases, the Markov process will converge to a steady state or equilibrium. In general, as number of transitions `n' increase, the state values
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Explain about Office and administrative expenses These expenses are not related to factory but they pertain to the management and administration of the business. Such expenses
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