Explore how to do simple computations by converting everything to percentages, including stock prices and income statements.
- Let's take a disturbing but brief journey…back to middle school math.…I'm sure that you learned, as I did,…about the least common denominator.…For example, maybe you were asked the following…type of question.…Which of the following fractions is the largest:…1/7th, 2/11th, 3/17ths or 5/29ths?…Well, the horrible way that we learned how to do this…in school was to compute the least common denominator…for all four of these fractions.…And in this case, the least common denominator is 37961.…
So we are now supposed to figure out how many…37961ths there are in each of the four fractions.…Nightmare.…I'm sure it was good middle school mental exercise…for all of us to find least common denominators,…but there's a much easier way to do this.…Just convert each of the four fractions…into a decimal as follows.…1/7th, 0.143.…2/11ths, 0.182.…3/17ths, 0.176.…And 5/29ths, 0.172.…
Now the question is easy to answer.…Which of the four fractions is the largest?…2/11ths.…Which is the equivalent, with rounding, to 0.182.…This is easy.…No least common denominators, no confusion, easy.…
In this course, join accounting professors Jim and Kay Stice as they help you discover how to leverage the power of numbers to approach businesses problems and make everyday decisions. They explore the power of ratios and percentages, how to monitor and evaluate your budget, how to forecast the timing and amount of a business loan, and much more.
- Explain the rule of 72.
- Determine net income based on wholesale and retail costs.
- Apply the appropriate methods to convert fractions to percentages.
- Define “consumer price index.”
- Identify the difference between mean and median.
- Recall how to calculate conditional and unconditional probability.
Skill Level Beginner
1. The Power of Ratios and Percentages
2. Applied Probability and Statistics
3. Numerical Planning and Measurement
4. Interest: Paying and Earning
5. The Art of Numerical Estimation
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