The profit for a firm may be determined from the perspective of an accountant or economist. The costs are usually categorized into explicit costs and implicit costs to calculate the economic profit and accounting profit. Answer and Explanation:1 The correct answer is optio...
equal to the difference between accounting profit and implicit costs Accounting profit is equal to: a. total revenue minus implicit costs. b. total revenue minus explicit costs. c. total revenue minus explicit and implicit costs. d. economic ...
If economic profit equals accounting profit, what do implicit costs equal? 1. How would you determine the economic profit of a company? 2. Should managers maximize economic profit or accounting profit? Why? Economic profits are: A: The same as accounting profits. B: Accounting profits minus i...
This same identity is also expressed in another way: total assets minus total liabilities equals total owners’ equity. In this form, the equation emphasizes that the owners’ equity in the company is always equal to the net assets (assets minus liabilities). Any increase in one will inevitably...
ROA (i,t−1): assets return obtained by dividing current year operating profit by the average of the firm’s total assets i (Lobo et al. 2018; Nam 2020). ADJROA (i,t−1): firm i’s assets return minus the average of the assets return of the peer firm’s assets return (Lobo...
Costs include rent, taxes, utilities, salaries, wages, anddividendspayable. Shareholders’ Equity The shareholders’ equity number is a company’s total assets minus its total liabilities. It can be defined as the total number of dollars that a company would have left if it liquidated all of ...
fixed costs of a company and dividing that by its contribution margin. Thecontribution margin, calculated as sales revenue minus variable costs, can also be calculated on a per-unit basis in order to determine the extent to which a specific product contributes to the overall profit of the ...
not so simple. Whether an investment is seen as a profit or as a loss may depend on the types of costs analyzed. While revenue minus expenses equals profit, not all expenses qualify. Generally, profitability is determined by examining two types of costs: accounting costs and economic costs. ...
The actual production cost (\({Prod}_{i,t}\)) equals cost of goods sold plus change in inventory. Abnormal production cost is the actual production cost (scaled by lagged total assets) minus the assumed normal level of production cost from Eq. (3). ...
Net Income is the final profit figure on a company’s income statement, representing the total amount of money a startup has earned after deducting all operating expenses, interest, taxes, and other costs from its revenue. For venture-backed startups, Net Income is negative in the early year...