Help with a business question

User Generated

avan41

Business Finance

Description

Explain why the four steps involved in the controlling function are important. Why is a good understanding of the various ratios used by accountants and managers important to the controlling function? Give specific examples.

User generated content is uploaded by users for the purposes of learning and should be used following Studypool's honor code & terms of service.

Explanation & Answer

Thank you for the opportunity to help you with your question!

Four steps in controlling functions are important because by doing this we are establishing the standards of the business.We have to set the standards to achieve our goals.Standards are measured in term of the output, in terms of loyalty, customer attractions, quality of goods. And these thing are very important for business progress.

For the progress of the business , the managers and accountants should have good knowledge of various ratios, few are as ...

(1)Net sales to working capital, it should be high as it tells how working capital is utilized.

(2)Net sale to Inventory..greater the turnover of inventory, higher the profit.

(3)Current ratio...this is the ratio of current asset to current liabilities and determine how good the financial position of the company.It should be high.

(4)Net profit to net sale...This should be high , this tells about the profit

So these are few whose good knowledge is a must to run the business efficiently.



Please let me know if you need any clarification. I'm always happy to answer your questions.


Anonymous
Super useful! Studypool never disappoints.

Studypool
4.7
Trustpilot
4.5
Sitejabber
4.4

Similar Content

Related Tags