Strategy for evaluating accounting information: Select, Identify and explain

What are some of the methods for evaluating capital expenditures?

What does evaluating accounting information mean?

Some capital expenditures are selected out of necessity, such as a government requirement to change the system for discharging environmentally harmful vapors or to comply with an OSHA requirement. After budgeting for the required capital expenditures, companies might use the following techniques for evaluating other capital expenditures. Payback. This calculates the number of years it will take to recoup the cash spent on a project. A criticism of payback is that the time value of money is not considered and the cash flows over the entire life of the project are not considered. Accounting Rate of Return or Return on Investment. This approach looks at the increase in accounting profit compared to the increased investment.

Data is a memory challenge.

Accounting information is the language of business as it is the basic tool for recording, reporting and evaluating economic events and transactions that affect business enterprises. It processes all documents of a business financial performance from payroll, cost, capital expenditure and other obligations to sale revenue and owners equity.

Realizar mediciones comparativas delos ratios de eficiencia con los dos periodos anteriores nos permite tener una idea clara de la evolución o involucion de la empresa en el periodo comparado

Some capital expenditures are selected out of necessity, such as a government requirement to change the system for discharging environmentally harmful vapors or to comply with an OSHA requirement. After budgeting for the required capital expenditures, companies might use the following techniques for evaluating other capital expenditures. Payback. This calculates the number of years it will take to recoup the cash spent on a project. A criticism of payback is that the time value of money is not considered and the cash flows over the entire life of the project are not considered. Accounting Rate of Return or Return on Investment. This approach looks at the increase in accounting profit compared to the increased investment