Answer: Please refer to Explanation
Explanation:
<u>Income Statement </u>
Profitable Company - <em>Bottom line in surplus</em>
Unprofitable Company - <em>Bottom line in Deficit</em>
The Bottomline in the Income statement refers to the Net Profit after all adjustments and deductions have been made. This is the figure that is taken to Retained Earnings and therefore funds the business. If the Bottomline is in Deficit that means the company made a loss and by definition are Unprofitable. The reverse is true.
<u>Balance Sheet</u>
Profitable Company - <em>Financially healthy</em>.
Unprofitable Company - <em>Financially failing</em>.
The Balance Sheet shows the health of a company by checking it's assets vs it's Liabilities and Equity. If it is shown for instance that there is too much debt in the company or that Current Liabilities are more than Current Assets, this shows that the company is not healthy and this is usually a symptom of an Unprofitable company. However a balance sheet showing strong Net Assets and a good Debt - Equity balance is considered healthy and is related to a Profitable Company.
<u>Statement of Cashflow.</u>
Profitable Company - <em>Inward flow of cash</em>
Unprofitable Company - <em>Outward flow of Cash</em>
The Statement of Cashflow (SCF) shows the actual amount of cash that a company has and spends. Other statements can include amounts for which cash has not been paid yet due to the Accrual system in Accounting. The SCF only deals with cash. A Profitable Company will have more cash coming in than going out because it would mean they are making profits as well as being in a strong financial position.
An Unprofitable Company on the other hand will show more cash leaving than coming in. This Outward flow of cash will signify that the company is spending more than it gets which is the sign of unprofitability.
In a typical balance of payments crisis part the interest parity curve shifts in. Capital exodus results from downward pressure on interest rates, whereas imports rise as income levels rise.
As a result, the exchange rate depreciates, moving the BP curve to the right. The I and Y combinations that result in balance of payments equilibrium are provided by the BP curve. A given domestic price level, a certain currency rate, and a specified net foreign debt are used to build the BP curve. When the capital account deficit equals the current account surplus, equilibrium has been reached. Interest rates between two countries must be equal for interest rate parity to persist in a fixed exchange rate regime.
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Answer: B costs
Explanation:
In business and accounting, cost is the monetary value that has been spent by a company in order to produce something.
Cost accounting aids in decision-making processes by allowing a company to calculate, evaluate, and monitor its costs.
The correct answer is the Coase theorem
Suppose that a large tree on Betty's property is blocking Chuck's view of the lake below. Betty accepts Chuck's offer to pay Betty $100 for the right to cut down the tree. This situation describes the Coase theorem.
