Working capital equals current assets minus current liabilities. The acid-test ratio equals quick assets current assets - inventory - prepaid expenses) divided by current liabilities.
Inventory a current asset) turnover equals cost of goods sold divided by divided inventory. The average collection period number of days' sales in accounts receivable, a current asset) equals the number of days in a year divided by the accounts receivable turnover net credit sales / average receivables). The foregoing are some of the many ratios that can be used to evaluate working capital management.

The catalog sales firm is using an online processing system known as an online, real-time system OLRT). OLRT systems handle transactions as they are entered, processing the input and providing output soon enough to affect a current decision making process, e.g., inventory and credit status of phone call orders. The sending of upcoming production schedules and parts orders by and manufacturer's computer to a supplier's computer is an example of electronic data interchange EDI). EDI is the communication of electronic documents directly from one entity's computer to another's computer.

The traditional approach to bud is to merely increase last year's figures by a given percentage or increment. Zero-based budgeting divides programs into packages of goals, activities, and required resources. The cost of each package is then calculated afresh, without regard to previous performance.

Utility programs are provided by manufacturers of equipment to perform routine processing tasks required by both clients and auditors, such as extracting data, sorting, merging, and copying. Utility programs are pretested, are independent of the client's own programming efforts, and furnish useful information without the trouble of writing special programs for the engagement.