tailieunhanh - Business Ratios and Formulas phần 3

nó là bằng chứng rằng không phải là tài sản quá nhiều đã được thêm vào bởi một công ty trong những năm gần đây, tháng 5 lần lượt dẫn để nghi ngờ rằng có rất ít tiền mặt có sẵn cho như vậy đầu sản. Một biến thể của phương pháp này là để chạy các tính toán tương tự cho các lớp học khác nhau của tài sản, | Cash Flow Measurements I 55 CASH FLOW RETURN ON SALES Description This is a general measure for determining a company s ability to generate cash flow at various levels of sales volume. It will tend to fluctuate in accordance with a company s step costs. For example if a company is operating at maximum production capacity it has reached a point where its cash flow is likely to be maximized. If it were to increase its costs in order to add capacity the resulting cash flow could very well drop until sales increase to the point where incremental cash inflows exceed the incremental cash outflows associated with added production capacity. Formula Divide total sales into cash flow. This ratio is more useful when it is subdivided into individual product lines so managers can see which products are generating the most cash flow relative to sales volume. The formula is Net income Noncash expenses - Noncash sales Total sales Example The Better Back Chair Company is experiencing a dismal cash flow from its sales. The CFO decides to split the company into its various product lines to determine where the cash flow problems are the worst and organizes the information for Table . The table reveals that only the Norwegian product line is generating a positive cash flow return on sales. Furthermore the table reveals considerable quantities of noncash sales on two of the three product lines extra investigation reveals that the controller has been booking sales prior to shipment so that sales have been artificially inflated. The CFO fires the controller and sets up better controls over the recording of sales. Cautions This ratio will vary considerably by industry as well as a company s break-even level which in turn is based on its relative level of fixed costs. Also it may not make sense to pour more resources into a product line that generates a high ratio of cash flow return on sales if that product line has already achieved its maximum market share potential. In addition it may