Accounting 610 – Accounting in a Corporate Environment – Week 2

Week 2 – Balance Sheets and General Cost Accounting

We deep dived into the balance sheet and understanding the nature of assets, liabilities, and stockholders equity. We also went into Cost Volume Profit (CVP) analysis, which is an incredibly important concept. From this we talked more about revenue and its relation to variable costs to create contribution margin and calculating Break Even analysis by the unit and sales dollar amounts. We looked at this both from a ratio method or using an equation method (which I prefer). This week brought back memories of when I was doing analysis for a manufacturer many years ago. I ultimately decided to abandon that course of action simply because there wasn’t any financial reward to it as commensurate with the skill required to do the job or the value of the analysis.