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The Significance Of Relative Business Income (Cost) Ratio

2010/11/23 13:55:00 42

Associated Business Income (Cost) Ratio Accounting Cashier

What is the related business income (cost) ratio?


The related business income ratio is the ratio of the revenue generated by related pactions to the main business income.


A formula for calculating the ratio of related business income (cost)


Associated business income (cost) ratio = revenue (cost) generated by linked pactions / main business income (cost) x 100%


The significance of the related business income (cost) ratio


  

list

Companies to avoid

loss

To achieve the qualification of new shares or maintain the profit growth rate in order to maintain the company's image, there is a correlation between them.

paction

Manipulating profits, but after deducting non recurring gains and losses, the company can not use these pactions to manipulate profits.

Therefore, the focus should be shifted to related pactions in procurement and sales activities, to examine whether the paction is fair and impartial, whether the paction price is reasonable, whether it is concentrated at the end of the year, and to track the return of the paction proceeds and whether there is a large amount of return after the accounting date.

If the paction price is found to be unfair, concentrated at the end of the year or after a large amount of return after the accounting statement, there may be a possibility of manipulating profits and generating early-warning signals.

In addition, if the index is higher than 70%, it is questionable that the independence of the company's procurement and sales system is doubtful.

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