Explain the Various Ways a Public Organization Is Different from a Private

question 8

Essay

Explain the various ways a public organization is different from a private organization.

Understand the significance of contribution margin ratio and its calculation.

Recognize the importance of appropriate activity bases for cost analysis in different business contexts.

Comprehend the concepts of EBITDA and its relevance in financial analysis.

Understand the framework for making production and sales decisions based on contribution margins.

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Definitions:

Ending Inventory

The estimation of goods on hand for sale at the termination of an accounting period, figured by the formula: starting inventory plus acquisitions minus the cost of goods sold.

Inventory Turnover Ratio

A measure of how rapidly inventory is sold or used in a given period, calculated by dividing cost of goods sold by average inventory.

Days' Sales

Often refers to days' sales outstanding (DSO), which measures the average number of days it takes a company to collect payment after a sale has been made.

Inventory

Goods and materials that a business holds for the ultimate goal of resale or processing.