Help with a business question

timer Asked: Nov 19th, 2015
account_balance_wallet $5

Question 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.

Tutor Answer

School: Rice University

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.

flag Report DMCA

Good stuff. Would use again.

Similar Questions
Related Tags

Brown University

1271 Tutors

California Institute of Technology

2131 Tutors

Carnegie Mellon University

982 Tutors

Columbia University

1256 Tutors

Dartmouth University

2113 Tutors

Emory University

2279 Tutors

Harvard University

599 Tutors

Massachusetts Institute of Technology

2319 Tutors

New York University

1645 Tutors

Notre Dam University

1911 Tutors

Oklahoma University

2122 Tutors

Pennsylvania State University

932 Tutors

Princeton University

1211 Tutors

Stanford University

983 Tutors

University of California

1282 Tutors

Oxford University

123 Tutors

Yale University

2325 Tutors