Learn how to use simple financial ratios to determine how much of Walmart's inventory is not yet paid for.
- A financial ratio is just one accounting number…divided by another accounting number.…That sounds simple and it is.…But we will find it amazing how much we can learn…just by dividing one number by another.…Let's continue using Walmart as an example.…I like using Walmart because to most of us,…Walmart is a pretty easy business to understand.…The company buys land and builds large buildings.…They fill those buildings with inventory,…the items that they sell to you and to me.…They pay their operating expenses such as wages,…property taxes, utilities, insurance and so forth.…
If they have any bank loans, they pay interest.…Then they pay income taxes on any profits…that are left over.…In the end, the remainder, the number that accountants call…net income, that belongs to Walmart's shareholders.…Now as a disclaimer, I have to admit that…I am a Walmart shareholder.…Because of various investment portfolios I have…in my retirement fund, I own about…0.000004%…of Walmart.…Okay, I'm not their biggest shareholder,…but I do own a little bit.…
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.
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- 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.