This was arbitrarily determined by FASB

Because the statements are interrelated and build on each other

Because each statement has more information than the previous one

So that all financial reporting can be consistent throughout the industry

Total debt divided by Equity

Stock price divided by earnings per share

Net Income divided by Equity

Net Income divided by Assets

Assets = liabilities + owner's equity

Working capital ratio = current assets divided by current liabilities

Quick ratio = current assets – inventories

Growth rate = (current year – previous year) divided by the previous year

Sales less cost of goods sold

Cost of goods sold less salaries

Sales less operating expenses

Operating expenses less cost of goods sold

Fixed costs and contribution margin

Sales, expenses, and gross profit

Assets, liabilities, and owner's equity

Stock price and earnings per share

Management accounting is rigid to ensure accuracy

Financial management reports are tailored to the needs of individual managers

Accountants primarily communicate financial data to top management

Management accounting is a small part of a manager's responsibilities

To enable management to understand the organization's financial situation

To provide software programs to collect financial data

To ensure that stakeholders have accurate financial information for decision-making

To ensure that everyone speaks the same financial "language"

Maturity

Growth

Decline

Introduction

Focus on developing similar products

Create a "new and improved" marketing

Create new products

Attempt to rebrand the mature product

It makes email marketing easier

It gives the ability to promote each product individually

It allows for increased consumer data analysis

It becomes easier to determine where products are in the product life cycle