ACC345 Week 1 Discussion 2
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345
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Business
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Feb 20, 2024
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docx
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Write:
In your initial post, discuss the metrics to evaluate in your business or the business you work for to achieve financial results. The author Joe Knight in the video
Finance: What Managers Need to Know
Links to an external site.
talks about accounting estimates and the need to know what questions to ask. What metrics are used in the business you work for or in your business? Explain the difference between profit and cash flow, and discuss transparency.
Make sure your post is more than 200 words and that you include a brief quote or paraphrase the video or reading material where appropriate (see the Writing Center’s
Quoting, Paraphrasing, & Summarizing
Links to an external site.
guide for assistance with in-text citations).
A business can use a variety of measurements. The company I work for now, Oliver Technologies, employs the cost of customer acquisition together with client retention and loyalty. Customer loyalty and retention refers to the proportion of customers that make repeat purchases or stick with your firm over a prolonged period of time. The average amount of money your business spends to bring on a new client is known as the cost of customer acquisition. Both new and returning customers are treated to the greatest prices, which are competitive with those of other companies. The amount of time and money needed to make a sale from them is the only distinction between the two.
According to Joe Knight, there are three distinctions between profit and cash flow. 1. Profit is realized when a sale is made, not when money is received. This occurs when the project is transported or finished. 2. Large sums of money are frequently used to buy expensive equipment, which alters cash flow and prevents multiple sales from being recorded as profits because the money is immediately used as a cost. 3. When we truly pay an expense, it is not recorded on the income statement; rather, the expense is recorded when
the service is rendered. Similar to the payroll illustration. (Harvard Business Review, 2009, 13:40).
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