3/7/2024 0 Comments Cogsaccounts payableMafumbate J & Ndlovu U & Mafuka A & Gavhure P, 2017." Working capital management of SMEs in COVID-19: role of managerial personality traits and overconfidence behavior,"Įconomic Analysis and Policy, Elsevier, vol. Zheng, Xiaotian & Zhou, Youcheng & Iqbal, Sajid, 2022. " An Inverse Problem Study: Credit Risk Ratings as a Determinant of Corporate Governance and Capital Structure in Emerging Markets: Evidence from Chinese Listed Companies,"Įconomies, MDPI, vol. These are the items that most often cite the same works as this one and are cited by the same works as this one. Any financial analyst not being able to reach a detailed breakdown of the expenses of the companies whose shares are being traded in stock exchanges will not able to calculate these ratios. Their accounting departments will be able to calculate the ratio correctly since they can reach the data. These ratios can only be truly calculated from within the company if need be. In practice, manufacturing companies do not attempt to calculate these ratios due to the difficulty of obtaining the figures. It should not include depreciation, amortisation, payroll and interest expenses to be meaningful for the purposes of the calculation of the ratio. The second major group who explain the ratio by using the COGS figure ignore what is included in COGS. Purchases, in a purely theoretical sense, relate to periodic inventory method, whereas the perpetual inventory method relates purchases with inventory (being debit) and accounts payable (being credit). The first group relates the ratio to purchases and the second group relates the ratio to cost of goods sold (COGS). The extant literature on the ratio is mainly comprised of two groups of authors. Different financial accounting textbooks and academic papers have different explanations for the accounts payable turnover ratio. However, the same thing cannot be said for accounts payable turnover and days in accounts payable ratios. Generally speaking, financial accounting textbooks are in harmony on the explanation of accounts payable and accrued liabilities/expenses.
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