Buying Assets to generate Income

Related BrainMass Solutions

• Classifying Cash Flows

  Investing: plant and property are long-term assets the company needs to generate sales. 6. Operating: paying for operating items is an operating expense (by definition) 7.

• Signs of a Profitable Firm

  In order to sustain its operations and thus generate sales and cash flows in the future, the firm was required to make $1,250 of capital expenditures on new fixed assets and to invest $300 in net operating working capital.

• Roger Corporation and Sean Corporation

  their assets to generate sales.

• A decision whether to borrow money or sell stock is an examp

  A firm must depend on its ____ activities to generate profits. investing operating nonrecurring financing 9. During May, the Family Resort had revenues of $20,000 and expenses of $8,000.

• 3 ratio components of Return on Equity (ROE) are described and illustrated.

  Profit Margin = Net Income / Sales 2. Asset Turnover = Sales / Assets 3. Financial Leverage = Assets / Equity Profit Margin measures the percent of profits you generate for each dollar of sales.

• Deciding which company to buy

  Return of assets shows how well company assets are used to generate profits. Cash flow analysis will help check on the financial health of the company.

• Net income and Return assets

  Return on Assets = Net Income / Total Assets = 72,000/500,000 = 14.4% The solution explains how to calculate the net income and the return on assets for Shiloh Networking

• Your friend Lucy slept through a class in which her professo

  Then, even though no actual money is spent to pay for amortization or depreciation expenses, each year, on the income statement, a business will include an expense reflecting the "cost" of using those assets to generate income during the period of time

• Accounting:Describing the balance sheet and income statement

  Assets: These represent the physical and non-physical items that the company uses to generate its income. These items can also be sold later in order to generate cash resources. 2.