Economists Regularly Make Hostile Comments About Accounting Data

question 26

Essay

Economists regularly make hostile comments about accounting data. It is purely historical. It is aggregated. It doesn't segment by levels of capacity usage. It often is not formatted for information on incremental change. So why is it the key data source for decision control and important in decision management?

Understand the implication of short-run and long-run market adjustments.

Describe how changes in demand affect the market in the short run and long run.

Understand the determinants of the industry supply curve elasticity in the short run and long run.

Understand the concept and implications of anxiety sensitivity.

---

Definitions:

Net Income

Signifies the net income of a corporation following the subtraction of all costs and tax obligations from the overall revenue.

Inventory Turnover

A measure showing the frequency at which a company's inventory is sold and replenished within a given timeframe.

Days in Inventory

A financial metric that calculates the average number of days a company holds inventory before it is sold.

Consigned Goods

Items that are given to a third party to sell but remain the property of the seller until sold.