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Financial analysis is critical to determining the intrinsic value of a company. Analysts, hedge funds, institutional investors and retail investors alike all use various forms of information to determine a fair price to pay for a security. This information is generally acquired through the financial statements of the particular company being researched. In addition to the many forms of information gathering within the market, there are also many philosophies that determine the underlying characteristics of individual investors. First, there is a value philosophy predicated on locating stocks well below their intrinsic value with a predetermined margin of safety to account for errors of judgment. This philosophy attempts to identify undervalued securities. Likewise, there is a growth philosophy which is focused primarily on the future growth trends within a particular industry. There are many philosophies that govern investment behavior with these two constituting the vast majority. No matter what…
1) Modigliani, Franco and Merton H. Miller. 1958. "The Cost of Capital, Corporation Finance and the Theory of Investment." The American Economic Review, vol. 48, pp. 261-297.
2) Williams, Jan R.; Susan F. Haka, Mark S. Bettner, Joseph V. Carcello (2008). Financial & Managerial Accounting. McGraw-Hill Irwin. pp. 32- 57. ISBN 978-0-07-299650- 0
3) Daniels, Mortimer (1980). Corporation Financial Statements. New York: New York: Arno Press. pp. 9 -- 18. ISBN 0-405-13514-9.
4) Epstein, Barry J, Eva K. Jermakowicz (2007). Interpretation and Application of International Financial Reporting Standards. John Wiley & Sons. pp. 923-942. ISBN 978-0-471-79823-1.
a) Using the 2012 Annual eport, which reflects the fiscal year ended December 31, 2012, Facebook lists short-term liabilities on its balance sheet of $1.052 billion, split between several categories. The largest of these is the accrued expenses, followed by the capital lease obligations. The long-term debt on the company's balance sheet is $1.50 billion with the total long-term liabilities being $2.296 billion.
b) The market capitalization of Facebook is $107 billion, according to Yahoo Finance.
The debt ratio of the company, using the book value of the company's equity, is 3348 / 15103 = 22.1%. The debt-to-equity ratio is 3348 / 11755 = 28.6%.
For short-term liabilities only, the STL Debt ratio is 1052 / 15103 = 6.9% and the STL/Equity ratio is 1052 / 11755 = 8.9%. The LTD debt ratio is 2296 / 15103 = 15.2% and the LTL/Equity ratio is 2295 / 11755 =…
Facebook 2012 Annual Report.
Question/Statement: Select either the balance sheet or income statement and explain how the use of it may be applied to your everyday life.
The balance sheet may be applied to everyday life in that it can be used to assess past performance, as well as to plan for future undertakings. If, for example, an individual used one's birthday as the balance sheet statement date, then the balance sheet would show assets accumulated up to that point, such as one's bank accounts, furniture, computers, 401K, equity in one's house and/or car and so forth. The individual's liabilities would include one's mortgage and car payments, credit card balances, student loans. The difference between total assets and total liabilities equals the individual's net worth.
The balance sheet may be used to evaluate an individual's performance in everyday life, for example, to see how well certain goals have been met. If, for…
Business Link. (n.d.) Balance sheets: the basics. Balance sheet reporting, Contents of the balance sheet, and Interpreting balance sheet figures. Retrieved August 14, 2011 from: http://www.businesslink.gov.uk/bdotg/action/detail?itemId=1074499496&r.i=1074499395&r.l1=1073858790&r.l2=1073858944&r.l3=1073889327&r.s=sc&r.t=RESOURCES&type=RESOURCES
Huey, M. (2011). The balance sheet: what does it mean? Ohio State University Fact Sheet. Retrieved August 14, 2011 from: http://ohioline.osu.edu/cd-fact/1154.html
Investopedia Staff. (2009). Reading the balance sheet. Retrieved August 14, 2011 from: http://www.investopedia.com /articles/04/031004.asp#axzz1V1rMJQP2
alance Sheet Adjustments
The updated balance sheet for Module 2 is as follows:
Property, Plant, and Equipment
Liabilities and Stockholder's Equity
Paid In Capital
Total Stockholder's Equity
Total Liabilities & Stockholder's Equity
ecause the customer did not commit to the purchase, the Sales account would have been credited the 45,500 and the inventory account debited 45,500 to correct the original transaction. The computation of the cost of goods sold affects the income statement, not the balance sheet. ecause the ending inventory was computed by using a physical account, the ending inventory would have adjusted itself to the 25,000 for the final balance sheet amount; therefore, no adjustment is needed (Kieso, 2008, p. 1175).
Managers often pay dividends before an IPO to keep…
Kieso, D.W. (2008, p. 1175). Intermediate Accounting I, II, and III, 12 ed., . Hoboken, NJ: John Wiley & Sons, Inc.
Martin, J. & . (2009, Sep). The Pre-IPO Dividend Puzzle. Retrieved from UIBK: http://www.uibk.ac.at/ibf/sonstiges/seminar/preipopuzzle.pdf
Capital structure decisions can be deliberate as well, yet an analyst without knowledge of the firm's intentions could make an entirely different determination about the validity of the firm's capital structure if based only on the balance sheet. At a minimum, the income statement is also required and in most cases much more information than that is needed to make an accurate assessment of the firm's financial condition (Kennon, 2010).
Essentially, the balance sheet is a useful tool for analysis, but it must be taken into context with a wide variety of other information, not all of which will be in the notes. In that regard, financial statements are limited and the analyst is recommended to consider those limitations when undertaking an analysis of the balance sheet.
Kennon, J. (2010). hat the balance sheet can and cannot tell you. About.com. Retrieved January 28, 2010 from http://beginnersinvest.about.com/od/analyzingabalancesheet/a/putting-together-balance-sheet.htm
Kennon, J. (2010). What the balance sheet can and cannot tell you. About.com. Retrieved January 28, 2010 from http://beginnersinvest.about.com/od/analyzingabalancesheet/a/putting-together-balance-sheet.htm
The attention on cases of impairment has generally been reduced, but this is expected to increase with the more emphasis placed on financial analysis and audits, a need generated by the contemporaneous economic crisis (Wayman, 2009). As an addition then, there have been developed complementary regulations. IFS 3 for instance, states that while amortisation tests will not be conducted, impairments tests will still be performed. IAS 39 states that the interest income related to impaired credits would be recognized starting with 2005; more net present value calculation on impaired loans will be conducted (Nordea, 2005).
Impairment can be observed when the issuer encounters severe financial difficulties; he breaks the contractual terms with his partners; he becomes involved in dubious borrowing; it becomes likely that the company will declare bankruptcy or will be purchased by another entity; observation of financial statements. Impairment is generally measured with the aid of assets at…
Wayman, R., 2009, Impairment Charges: The Good, the Bad and the Ugly, Investopedia, http://www.investopedia.com /articles/analyst/110502.asplast accessed on February 6, 2009
Sacho, Z.Y., June 2007, the Destroying Effects of Measuring Financial Instruments at Amortised Cost, Accountancy SA
2005, IFRS Effects on Financial Statements, Nordea, retrieved at http://www.nordea.com/sitemod/upload/Root/www.nordea.com%20-%20uk/Investorrelations/050407_ifrs_seminar.ppton February 6, 2009
2009, CFA Level 1 - Asset Impairment, Investopedia,
Apple and Philips Balance Sheet Analysis
This text examines the balance sheets of both Apple and Philips in greater detail. Amongst other things, the paper will identify a number of differences between IFS and U.S. GAAP as far as valuation approaches are concerned. Further, in addition to discussing a number of balance sheet items, the paper will also highlight the main differences between the balance sheets of the two companies.
Valuation Differences: U.S. GAAP vs. IFS
There are several differences that exist between IFS and U.S. GAAP. This is more so the case when it comes to the valuation of inventory, asset valuation as well as revenue recognition. The two differences I cite herein are largely in regard to valuation. To begin with, assets revaluation is not permitted under U.S. GAAP (Ernst and Young, 2011). However, when it comes to IFS, "revaluation is a permitted accounting policy election for an…
Ernst and Young. (December, 2011). U.S. GAAP vs. IFRS: The Basics. Retrieved from http://www.ey.com/Publication/vwLUAssets/US_GAAP_v_IFRS:_The_Basics/$FILE/U.S.%20GAAP%20v%20IFRS%20Dec%202011.pdf
Porter, G.A. & Norton, C.L. (2010). Financial Accounting: The Impact on Decision Makers (7th ed.). Mason, OH: Cengage Learning.
Balance Sheet Items
Off-Balance Sheet Items
This paper examines off-balance sheet items and their treatment in financial systems analysis. Balance sheets consist of information about a company's assets, liabilities, and owner's equity. Off-balance sheet information is described as any activity a company can engage in but not report on its balance sheet. Frequently these activities relate to liabilities incurred by companies. In some cases companies that attempt to keep information off-balance sheet may do so illegally, intending to present a stronger financial position (Thomason, 2011).
Off-Balance Sheet Accounting
Off-balance sheet accounting is a form of accounting for assets, debts or other financing activities that are not included on a company's main balance sheet. A company's financial wealth is typically determined by the total assets minus total liabilities listed on the balance sheet; if this number is positive, then the company has created financial wealth (Vitez, 2010).
Generally accepted accounting principles…
FDIC. (2005). Risk Management Manual of Examination Policies. Retrieved from http://www.fdic.gov/regulations/safety/manual/section3-8.html
Holton, Glyn. (2005). Riskglossary.com. Retrieved on April 6, 2011 from http://www.riskglossary.com/link/off_balance_sheet_finance.htm
InvestorDictionary.com. (2011). Off-balance sheet activities. Retrieved from http://www.investordictionary.com/definition/off-balance-sheet-activities
McClure, Ben. (2011). Uncovering Hidden Debt. Retrieved on April 6, 2001 from
Balance Sheet Financing
The SEC's definition of "off-balance sheet arrangement" includes any contractual arrangement to which an unconsolidated entity is a party under which the registrant has any obligation under certain guarantee contracts, a retained or contingent interest in assets transferred to an unconsolidated entity or similar arrangement that serves as credit, liquidity or market risk support to that entity for such assets; any obligation under certain derivative instruments; any obligation under a material variable interest held by the registrant in an unconsolidated entity that provides financing, liquidity, market risk or credit risk support to the registrant, or engages in leasing, hedging or research and development services with the registrant. [footnoteRef:1] [1: http://www.sec.gov/rules/final/33-8182.htm]
PROBLEM, JUSTIFICATION, LEGALITIES and ETHICS:
Although off balance sheet financing is legal, several technicalities may be exploited, substantial liabilities may be removed from the balance sheet and certain obligations may not be disclosed at all. This may…
MT Balance Sheet
a) The most recent balance sheet for al-Mart comes from the company's 8-K for the year ended January 31, 2011. The short-term liabilities for al-Mart were $58.484 billion. The long-term liabilities were $53.637 billion. Long-term debt is a component of the long-term liabilities and is listed at $43.482 billion.
b) At that point in time, the number of shares outstanding was 3.561 billion. The most recent price per share is $51.96. The market value of the equity in the company therefore is $185.03 billion.
The debt ratio is the total liabilities divided by the total liabilities + equity (aka total assets). This is $112.121 / $180.663 = 62%.
The debt-to-equity ratio is the total liabilities divided by the equity. This is $112.121 / $68.542 = 1.64
I consider these values to be within the acceptable range. They are closer to being too large, however. The company is…
MSN Moneycentral: Wal-Mart Stores, Inc. (2011). Retrieved March 7, 2011 from http://moneycentral.msn.com/investor/invsub/results/statemnt.aspx?lstStatement=Balance&Symbol=U.S.%3aWMT&stmtView=Ann
Balance Sheet Instruments
Describe how each of the "off-balance sheet instruments" (swaps, forwards, futures, options) helps in mitigating foreign exchange risk.
A swap is the exchange of one security for another security because investment climate has changed. Recently, swaps have grown to include currency swaps and interest rates swaps, to take account of changing exchange rates and thus mitigating risk. ("Swap," Investopedia) Similarly, in currency forward contracts, the contract holders are obligated to buy or sell the currency at a specified price, at a specified quantity, and on a specified future date. These contracts cannot be transferred and thus prevents a potential loss, should exchange rates change and render the contract less profitable than originally intended for one of the parties involved. ("Currency Forward," Investopedia) Futures are financial contracts that obligate the buyer (seller) to purchase (or sell and deliver) financial instruments or physical commodities at a future date, regardless…
"Currency Forward." (2005) Investopedia. Retrieved 6 Nov 2005 at http://www.investopedia.com /terms/c/currencyforward.asp 'Futures." (2005) Investopedia. Retrieved 6 Nov 2005 at
This indicates that none is capable of outperforming the market with the use of something that 'that everybody else knows'. Still there exists a number of financial analysis those study the past trend of stock prices and the trend in trading volume as an effort to generate profit. Such technical analysis is viewed by Efficient Market Hypothesis as not effective in forecasting the variations in the fluctuations of future prices. The semi-strong form of Efficient Market Hypothesis reflects that all openly available information is already integrated into the asset prices. Speaking other way, all openly available market information is completely reflected in the current price of the securities.
The public information depicted not only the past prices but also includes the data published in the financial statements of the company, the declarations made in the company, economic and others factors. It also specifies that none is capable of outperforming the…
Baviera, Gregory J; Walther, Larry M. Stock Option Accounting: Defying the Usual Answers. Retrieved at http://www.nysscpa.org/cpajournal/2004/504/essentials/p36.htm . Accessed on 30 November, 2004
Deal Makers Beware -- "More Changes to Accounting for Acquisitions on the Horizon. Retrieved at http://www.fleetcapital.com/resources/capeyes/a03-03-150.html . Accessed on 30 November, 2004
Efficient Market Hypothesis. Retrieved at http://www.alvinhan.com/Efficient-Market-Hypothesis.htm. Accessed on 29 November, 2004
Maloney, Dennis. J. Accounting for Stock Options: Change at Whose Expense? New Hampshire Business Review. May, 2002. Retrieved at http://www.gcglaw.com/resources/bs/stock.html. Accessed on 30 November, 2004
The balance sheet shows that most line items have a change that is greater that is 5%. This report will attempt to explain the wild fluctuations in the numbers from one year to the next.
With respect to the current assets, the decline in the cash position can probably be explained by the increase in the inventories and the accounts receivable. They are having problems collecting from their customers, apparently, and this has led to a situation where the receivables turnover has decline substantially. The result is that the asset remains as accounts receivable, instead of having been converted to cash. Patton-Fuller's own business might be in decline as well -- revenues are up but inventories are as well. This might point to poor inventory management, since without a decline in revenues the hospital has allowed its inventories to more than double.
With respect to the long-term assets,…
Merck discloses on its balance sheet the following components of stockholders' equity: capital stock, retained earnings, additional paid-in capital, treasury stock and accrued gains/losses. Novartis reports retained earnings, additional paid-in capital and treasury stock only. Neither of these companies has any preferred shares outstanding.
Both companies report treasury shares. Merck notes in its annual report that the Board "approved the purchase of up to $5.0 billion of Merck's common stock for its treasury. The treasury stock purchases have no time limit and will be made over time on the open market, in block transactions or in privately negotiated transactions." There are no reasons given for the purchase of treasury stock but there have been regular purchases of treasury stock over the past several years at Merck.
For its part, Novartis does outline in its annual report the point of its treasury stock purchases. It notes that…
MSN Moneycentral (2013) Merck. Retrieved December 8, 2013 from http://investing.money.msn.com/investments/stock-price?symbol=MRK&ocid=qbes
MSN Moneycentral. (2013). Novartis. Retrieved December 8, 2013 from http://investing.money.msn.com/investments/stock-price/?symbol=U.S.%3aNVS
Merck 2012 Form 10-K. Retrieved December 8, 2013 from http://www.merck.com/investors/financials/annual-reports/
Novartis 2012 Annual Report. Retrieved December 8, 2013 from http://www.novartis.com/downloads/investors/reports/novartis-annual-report-2012-en.pdf
Equipment (Net Depreciation)
Paid In Capital
Total SE & Liabilities
Cost of Goods Sold
Since the Inventory was an actual $75,000, Inventory, Retained Earnings, and Net Income was adjusted with a decrease of $3,650. Cost of Goods Sold was adjusted with an increase of $3,650. The customer's check of $10,000 adjusted cash with an increase of $10,000 and Accounts Receivable with a decrease of $10,000.
"A business that shows increased retained earnings balances is definitely making a profit because accounting income flows directly through the accumulated profit account." (Codjia). The net income is added to the retained…
Codjia, M. (n.d.). How Can One Tell On the Balance Sheet If a Company Is Making a Profit? Retrieved from eHow Money: http://www.ehow.com/info_8101066_can-sheet-company-making-profit.html
Dahl, D. (2010, Aug 30). How to Evaluate Your Company's Financial Position. Retrieved from Inc.: http://www.inc.com/guides/2010/08/hot-to-evaluate-your-financial-position.html
Financial Statement Review
Equipment (net of depreciation)
Paid in Capital
Total Stockholder's Equity
Total Liabilities and Stockholder
Cost of Goods Sold
alance Sheet errors effect the presentation of assets, liabilities, and equity where the Income Statement errors effect the classification of revenues and expenses (Kieso, Weygandt, & Warfield 2008, p 1174). The physical count of inventory shows the asset was overstated by $10,000. The omission of the sales transaction and the check showed the cash to be understated by $5,000 and the retained earnings to be overstated by $5,000. On the Income Statement, the Cost of Goods sold was understated by $410,000,…
Kieso, D.W. (2008). Intermediate Accounting, 12th ed. Hoboken, NJ: John Wiley & Sons, Inc.
Kimmel, P.W. (2007). Financial Accounting, 4th ed. Hoboken, NJ: John Wiley & Sons, Inc.
McClure, B. (2011, June 12). How to analyze a company's financial position. Retrieved from Investopedia:
Alleg Balance Sheet
Total Current assets
Plan and equipment:
Land and buildings
Less Accumulated depreciation
Total Plant Equipment
LIABILTIES AND STOCKHOLDES EQUITY
Current maturities of long-term debt
Total Current Liabilities
Deferred Income Taxes
Total long-term liabilities
common stock no par value
21000 shares authorized at $1 par valu,
10000 shares issues
Additional paid in capital
Total Stockholder's equity
Total Liabilities and Stockholders equity
a. Special Note
1. This was prepared using the Financial eporting Standards or IFS.
2. This was not reconciled with the U.S. Or the U.S. GAAP.
Bramwell, J. (2014). Fitch: IFRS Adoption in the U.S. Unlikely. Accountweb, 9 July 2014. Viewed 6 July 2015. Retrieved from http://www.accountingweb.com/technology/accounting-software/fitch-ifrs-adoption-in - the-us-unlikely
Hillman, A.D., Heaston, P.H., & Dodd, J.L. (2012). Convergence or Adoption of IFRS in the United States?. Drake Management Review, 1(2), 5-8.
Kaya, D., & Pillhofer, J.A. (2013). Potential adoption of IFRS by the United States: A critical view. Accounting Horizons, 27(2), 271-299.
Street, D.L. (2012). IFRS in the United States: If, when and how. Australian Accounting Review, 22(3), 257-274.
Financial Statement Usefulness
The alance Sheet is a statement that tells the assets, liabilities, and net worth of an individual or business at a specific date. It provides information about the nature and amounts of investments, obligations to creditors, and owner's resources and helps in predicting the amounts, timing, and uncertainty of future cash flows (Kieso, 2008). The alance Sheet is used to access liquidity, solvency, and financial stability.
For an individual, the alance Sheet can keep track of an investment portfolio and tell the individual what is owned, the costs of the assets, fees, etc., and what the overall portfolio is worth. It can be used to assess the individual assets for worthiness. It can keep track of assets the individual owns, such as cash, savings, etc., and obligations owed to creditors to tell the individual's overall financial worth. Using the alance Sheet can help an individual assess spending…
Develope a Personal Income Statement and Use it to Analyze Your Spending. (n.d.). Retrieved from BYU/Marriott School: http://personalfinance.byu.edu/?q=node/283
Kieso, D.E. (2008). Intermediate Accounting. Hoboken, NJ: John Wiley & Sons, Inc.
Stock is listed on the Balance Sheet under Stockholder's Equity. Common Stock is an equity account. The balance of this account represents the total value of all the company's outstanding common stock. Common Stock is owned by stockholders who hold rights to the company's assets. If the company liquidates the stockholders are entitled to the assets after all other obligations have been paid and the remainder divided based on the type of stock and how many shares the stockholder owns.
Equipment is listed on the Balance Sheet under the under Long-Term Assets. This is an asset account. The balance of this account represents all the equipment owned by a company that is used in the course of operations and is not sold as inventory. The balance of this account represents the balance of the Equipment Account less the Accumulated Depreciation of the assets.
Accounts Receivable is located on the Balance…
Gross margin 236.4 265.2 307.8 326.3
Administrative 169.4 202.8 236.1 249.3
Operating income 56.1-51.0-58.1-62.6
Net income 29.5-27.0-31.9-35.2
ratios - Tableau 1
Financial Management 2012 Name
Due December 16th 2012
Holly Fashions Industry
2003 2004 2005 2006 2003-06 Formula for ratio
Current Ratio 70.60% 1.7 Current assets / Current liabilities
Quick ratio (Acid-test ratio) 2.02 0.8 Cash + Investments Recievables / Current Liabilities
Debt Ratio (Debt to Total Equity) 7.26-57.0% Total Debt / Total Assets
Times interest earned 13.36 3.9% of Interest
Inventory Turnover (times per year) 5.1-6.0 Cost of Goods / Inventories
Days receivables outstanding (average collection period) 62.8-50.0 Accounts receivable / total sales *Number of days
Average payment period (days purchases outstanding) 23.58-25.0 Accounts Payable / Average Purchases per day
Gross profit margin (Gross margin) 24.90% 26.0% Sales-Costs of Goods Sold / Sales
Balance Sheet Activities
Off-sheet balance activities are of particular interest to investors as well as the Financial Accounting Standards Board (FASB) because these accounts can be difficult to identify and track and, in some cases, can even represent hidden liabilities. The definition of an off-balance sheet item is simply one that is an asset or debt that does not appear directly on a company's financial statements (Investopedia, N.d.). One of the most common examples of an off-balance sheet activity generally comes in the form of an operating lease. The primary company in this scenario does not have a legal claim or responsibility for the property and they simply lease the property from a subsidiary operation that was created to handle the real estate needs of the primary operation.
One of the issues that is commonly present in such an arrangement deals with the terms of such arrangements. Since the two…
FASB. (2016, February 25). Accounting Standards Update No. 2016-02, Leases (Topic 842). Retrieved from Financial Accounting Standards Board: http://www.fasb.org/jsp/FASB/Document_C/DocumentPage&cid=1176167901255
FASB. (2016). Update 2016 -02 - Leases (Topic 842) Section C - Background Information and Basis for Conclusion. Retrieved from Financial Accounting Standards Board: http://www.fasb.org/jsp/FASB/Document_C/DocumentPage&cid=1176167901087
Investopedia. (N.d.). Off Balance Sheet - OBS. Retrieved from Investopedia: http://www.investopedia.com /terms/o/off-balance-sheet-obs.asp
Q1. How have accounting techniques changed in recent years? How do they resemble practices in Italy during the Renaissance?
According to McCrie (2016), one of the great innovations which emerged during the Renaissance was that of double-entry bookkeeping. This technique, still used today, records the organization’s assets in one column or book versus liabilities, or claims on those assets (p.252). The term “dual entry” came into practice given both records were listed in dual columns. Still, some substantial innovations have taken place since the early days of double-entry bookkeeping, most notably the advent of technology such as computers to compute assets and store data. The actual book of originally-recorded assets in real time now called a journal and the book which records the cumulative data is called a ledger. Debits and credits are the terms are now the preferred terms for assets and liabilities. But while terminology has changed and…
The company that I am going to study is Google. This company makes most of its money from online advertising. hile it has a wide range of different services and products -- Android and Chrome being to prominent ones -- advertising is where it makes its money. The mission of Google is to "organize the world's information and make it universally accessible and useful" (Google.com, 2013). The company does not have an explicit vision statement. It competes on a differentiated strategy. This means that it seeks to sell more ads than its competitors by delivering the most eyeballs, but also by being able to provide significant data about those eyeballs. Google sells ads, therefore, by allowing its customer to better target their ads, something that adds value. Competing on value-added is typically associated with a differentiated strategy.
Google has a rather exceptional financial situation, in that it is…
MSN Moneycentral. (2013). Google. Retrieved April 30, 2013 from http://investing.money.msn.com/investments/stock-balance-sheet/?stmtView=Qtr&symbol=GOOG
Google.com. (2013). About Google. Google.com. Retrieved April 30, 2013 from http://www.google.com/about/company/
Forbes. (2013). Best companies to work for 2013. Forbes. Retrieved April 30, 2013 from http://money.cnn.com/magazines/fortune/best-companies/2013/snapshots/1.html
Stewart, J. (2013). Looking for a lesson in Google's perks. New York Times Retrieved April 30, 2013 from http://www.nytimes.com/2013/03/16/business/at-google-a-place-to-work-and-play.html?pagewanted=all
However, none was found that centered on small hotels in China. This research add to the existing body of research by providing an assessment of the balanced scorecard method in this special business setting. The information obtained by this study will help to make small hotels in China more competitive and able to compete well into the future.
This research will play an important role in the development of the small hotel business in China in several important ways. It will help them to see what areas of their business need improvement, it will help them to pinpoint specific problems within their organization. It will help to bring weakness from obscurity into the forefront where solutions can be found. It will also show them their strengths and the area that could be developed for even greater prosperity in the future. This research will help small hotels to develop long-term vision…
Alleyne, P., Doherty, I. And Greenidge, D. (2006). Approaches to HRM in the Barbados Hotel Industry. International Journal of Contemporary Hospitality Management, 18, 2, 94 -- 109.
Balanced Scorecard Institute. 2009. Balanced Scorecard Basics. [Online]. Available at: http://www.balancedscorecard.org/BSCResources/AbouttheBalancedScorecard/tabid/55/Default.aspx
Business and Strategy Insight for You. 2009. [Online]. Available at: http://strategy-insight.blogspot.com/2008/12/balanced-scorecards-case-study-in.html
Chen, C.N. And Ting, S.C. 2002. A Study Using the Grey System Theory to Evaluate the Importance of Various Service Quality Factors', the International Journal of Quality & Reliability Management, 19, 6, 838 -- 861.
Google's internal business processes are surprisingly informal for a group of engineers. Rather, Google likes to encourage the creative side of their workers, and so there is an emphasis on projects, even where there is no clear objective at the outset. The company also embarks on projects where there is no clear profit potential -- such is life at a company with $50 billion in the bank. The reality is that Google does all of this because it recognizes the importance of intellectual property in its success. The company hires great people, but then it allows them to innovate and perform, and the internal operations are specifically design to remove constraints to innovation.
On the more conventional side of the business, where Google runs the advertising business that makes all of its money, the company does have more formalized business processes. There is still an element of innovation…
BALANCED CORED CARD & THE FINANCIAL PERPECTIVE
The Balanced corecard & the Financial Perspective
CCRC (Cattaraugus County Rehabilitation Center) is a non-profit organization that focuses on the rehabilitation of disabled people in order to improve their quality of life. The organization also delivers the comprehensive services for disabled people to achieve maximum independence. imilar to the for-profit organizations that used balanced scored to maximize their revenues, the Center also attempted to use the strategy planning tools to enhance its effectiveness, however, the organization faced several challenges in its implementation. The new Director of the trategic Planning introduced the Balanced corecards tool "to cascade strategic planning throughout the entire organization." (Martello, Watson, Fischer, 2008, p 72). The goal of using the corecard is to align each area of the organization with the overall strategic plan.
This paper argues that the organization has done a good job by implementing the Balanced corecard…
Program Service Revenue
Balanced Scorecard Approach by Cattaraugus County eHabilitation Center
Unlike many so-called "management fads" that emerged over the past 20 years, the balanced scorecard approach has been shown time and again as an effective way for companies of all sizes and types of better manage their resources in ways that provide them with a competitive advantage. This paper provides a review of the relevant literature to demonstrate that Cattaraugus County ehabilitation Center did an effective job of implementing a Balanced Scorecard approach in a fashion that reflects their organizational mission and vision. A summary of the research and important findings concerning the Center's implementation of a balanced scorecard approach are presented in the conclusion.
eview and Discussion
Balanced Scorecard Overview
The Balanced Scorecard approach was developed and refined during the 1990s by Kaplan and Norton with the goal of identifying those factors that are most responsible for driving organizational performance (Martello,…
Mackay, A. (2004, October). A practitioners' report based on: Shareholder and stakeholder approaches to strategic performance measurement using the Balanced Scorecard. CIMA
Martello, M., Watson, J.G., & Fischer, M.J. (2008, September). Implementing a Balanced
Scorecard in a not-for-profit organization. Journal of Business & Economics Research,
Cash budget and target cash balance
The target cash balance is defined as the ideal cash amount a company intends to hold in its reserve at a given time. This figure seeks to strike a balance between the balance sheet costs of extremely little and too much cash. While a company with surplus cash at hand may misuse on investment opportunities, a company with poor cash will often be forced to make undesirable transactions to create more operating capital (Besley & Brigham, 2011). Individual investors are advised to set their target balance too. They may estimate at least the percentage of their holdings in cash to avoid such pitfalls.
Cash budget refers to the operating budgets and capital expenditures. It begins with the initial cash balances then cash inflows are added to the available cash. Cash outflows will then be subtracted to obtain the cash balance. If the cash balance…
Besley, S., & Brigham, E.F. (2011). Principles of finance. Mason, Ohio: South-Western.
Brigham, E.F., & Daves, P.R. (2012). Intermediate financial management. Mason, Ohio: South-Western.
Brigham, E.F., & Houston, J.F. (2012). Fundamentals of financial management. Mason, Ohio: South-Western Cengage Learning.
Ehrhardt, M.C., & Brigham, E.F. (2009). Corporate finance: A focused approach. Mason, OH: South-Western/Cengage Learning.
The impact of the UEFA implementation of the Fair Play Financial egulations could have a ripple effect that hurts soccer teams around the globe.
The Zimbalist article entitled, "Sport as Business" (2003) also brings up a good point about the socialization of sports leagues. Before the UEFA regulations take effect, the league operates in a relatively capitalist manner. Certainly many of the monetary imbalances that exist are not readily apparent when officials audit the books of the different teams, but as a business model, the new UEFA regulations may very well hurt the revenues of the entire league, not just certain teams specifically (Zimbalist, 2003). This would occur as club owners looking to turn a profit would be severely limited by financial restrictions put in place that force owners to stay debt-free. Owners will have less opportunity to attract talented players, especially owners of teams whose revenue is rather small.…
Conte, Niccolo. 2010. "UEFA's Financial Fair-play and why we should care." Soccer Lens
Homepage. Found Online August 15, 2010 at < http://soccerlens.com/uefas-financial-fair-play-and-why-we-should-care/52314/ >.
Ducrey, Pierre; Ferriera, Carlos Edward; Huerta, Gabriel; and Kevin Tallec Marston. 2003.
"UEFA and Football Governance: A New Model." Centre International D'Etude Du Sport.
In other words, on a balance sheet, outsourcing often makes sense. Take the following example of a study of one hundred domestically run company, where "on average," it cost an accounts payable department $16.54 to process a vendor payment," meaning that it cost the company "probably $10.50 - $11.00" to collect payment while using internal company labor on a permanent basis. (Cass, 2005) By out sourcing collection to a cheaper foreign or domestic firm, the original firm could save a great deal using workers in this relatively unobtrusive and mechanical capacity.
However, highly publicized, extensive use of outsourcing is not always so hidden -- for example when troubleshooting staff at a computer company may be technically literate, but not technically or colloquially fluent with the English language of most of the users of a 'help line.' Exploitation of local labor in poorer nations of Asia and Africa has incurred negative…
Cass Informations Systems. (2005) "ROI Outsourcing." Retrieved 26 Jul 2005 at http://www.cassinfo.com/cassutility/how_much.html
Donlon, Peter & John Kropp. (2005) "Offshore vs. Onshore outsourcing." API Company News. Retrieved 26 Jul 2005 at http://www.apioutsourcing.com/company/news15_offshore_vs_onshore.html
Outsourcing Discussion. (2005) Cadence Corporation. Retrieved 26 Jul 2005 at http://cadence.advanstar.com/ubbthreads/showflat.php?Cat=&Board=Outsourcing&Number=11834&Main=9990
alance sheet of a business describes a picture of that business from a financial point-of-view. The balance sheet represents a real time analysis of the company and can assist all those who understand its purpose in gaining a full understanding of conducting the operations of that business. The balance sheet of a company will have sections identifying the company's assets liabilities and equity.
Assets describe the positive and liquid attributes of a company. Liabilities have the opposite effect. The equity of a balance sheet highlights the relationships between the liabilities and the assets of the organization. The owner's equity of the balance sheet helps introduce capital that is unaccounted for in either the liabilities or assets portion of the balance sheet.
Liquid assets include cash, inventory, money received from paying customers, prepaid expenses. Investments, property and other intangible assets are included within balance sheets. Liabilities include money owed to accounts,…
Tulisan, P. (2010). Understanding the importance of a balance sheet. Interview on MSNBC 20 June 2010. Viewed 20 Aug 2011. http://www.youtube.com/watch?v=mjcy - UI90wE&feature=related
"U.S. Small Business Administration sample spreadsheet for a small business." Archived from http://web.archive.org/web/20070715223932/http://www.sba.gov/library/balsheet.xls . Retrieved 2011-08-20.
Fact Sheet on Hypomagnesemia
Hypomagnesemia: An overview
Etiology, pathophysiology, incidence & prevalence
Hypomagnesemia, otherwise known as magnesium deficiency, is defined as the patient possessing a serum Mg concentration of < 1.4 mEq/L (< 0.70 mmol/L) (Lewis 2009).
Hypomagnesemia is often seen in alcoholics, in pregnant or nursing women, or patients with gastrointestinal disorders due to their inadequate intake of vital fluids and excessive secretion. Other complaints associated with the deficiency include hypercalcemia after removal of parathyroid tumor and diabetic ketoacidosis (Lewis 2009).
An evaluation of the patient, in addition to lab work, will involve a full examination and a review of his or her disease history associated with hypomagnesemia.
Given the causes include taking drugs such as furosemide; a full medical review of the patient's history must be considered (Lewis 2009).
Common symptoms can be both psychological as well as physical in nature…
Lewis, James. (2009). Disorders of Magnesium concentration. Merck Manuals. Retrieved:
The objective of this eseach is to examine how business manages should deal with the wok-life balance issues of thei employees. This will be accomplished by conducting a eview of the liteatue in this aea of study and will include pevious studies and epots of an academic and pofessional pee-eviewed natue.
The pesent economy has made the suvival of businesses a challenging pusuit with climbing costs of labo not to mention the opeating expense fo a business. Howeve, flexibility is a pimay chaacteistic of the business that will suvive the pesent economic slump. In addition to the pesent state of the economy a epot published by the Society fo Human Resouce Management and specifically the 'Wokplace Foecast' elates that 57% of human esouces pofessionals "ageed that thee will be an inceased demand fo wok-life balance in the coming yeas." (Avats, 2010, p.1) In a sepaate study epoted by…
references and Business Need to Achieve Business Success. Everything Business Corp! 18 Mar 2010. Retrieved from: http://www.corpmagazine.com/management/human-resources/itemid/1369/the-importance-of-worklife-balance-aligning-staf
Buchanan, Leigh (2010) How to Improve Your Employees' Work-Life Balance. 8 Jun 2010. Inc. Top Small Company Workplaces. Retrieved from: http://www.inc.com/top-workplaces/2010/how-to-improve-your-employees-work-life-balance.html
Kubal, Diane and Newman, Janice (2010) Work-Life Balance a Key Tool for Retention. Workforce Management. Retrieved from: http://www.workforce.com/section/recruiting-staffing/feature/work-life-balance-becoming-key-tool-retention/
Martin, Judy (nd) Work-Life Balance & Employee Engagement. Evan Carmichael. Retrieved from: http://www.evancarmichael.com/Work-Life/1875/WorkLife-Balance -- Employee-Engagement.html
Work-Life Balance: The Business Case (2010 Education Queensland. Work-Life Association Fact Sheet. Retrieved from: http://www.worklifeassociation.org/uploads/File/businessfactsheet.pdfhttp://www.worklifeassociation.org/uploads/File/businessfactsheet.pdf
As a conclusion I must state that I agree with the philosophies of the ARJ method. I believe that all people must receive equal chances. I am sure that the children usually do not intend to act in a criminal way. I believe that those who adopt this type of conduct are either doing it because of the bad conditions within the family or because of the other influential factors (like the group of friends). However, no matter of the influence, the important fact is for the child to recover. ARJ offers him the change to gain certain skills and to be able to use them in the future, in the process of his professional development. In addition to that, by reestablishing the order inside the community and by letting the child do some community work, the court is making sure that there will be fewer chances for him to…
Pennsylvania Commission of Crime and Deliquency "Balanced and Restorative Justice (BARJ)" 25 Aug 2005, 10 Nov 2006 http://www.pccd.state.pa.us/pccd/cwp/view.asp?A=1387&Q=569712
Juvenile Law Center, Advancing the Rights and Well-being of Children in Jeopardy "Pennsylvania's Juvenile Justice System," 1996, 10 Nov 2006, http://www.jlc.org/index.php/factsheets/pajj#ENT0
Angeline Spain, Spotlight Pennsylvania, "The Case-Closing Project: an evaluation of BARJ in Pennsylvania," June 2004, 10 Nov 2006, http://www.neglected-delinquent.org/nd/resources/spotlight/spotlight200405b.asp
Peter Freivals, Office of Juvenile Justice and Delinquency Prevention Fact Sheet #42, Balanced and Restorative Justice Project (BARJ), July 1996, 11 Nov 2006 http://www.ncjrs.gov/pdffiles/91415.pdf
Primary activities: Improving grades; improving athletic performance; increasing healthy behaviors; decreasing unhealthy behaviors; reducing stress
Schedule activities and setting priorities: Tamara will keep a record of tasks on a monthly basis to do every day, labeling them high-priority, medium-priority, and low-priority to avoid getting stressed. This will include exercise and study time as well as formally scheduled activities and also what she eats and drinks every day.
Focusing on goals in a SMART fashion: Set short- and long-term goals that are SMART (specific, measurable, actionable, realistic and timely) for every primary activity domain under her set goals.
Delegate responsibilities to self and others: Determine which actionable goals (such as getting to the weight room three times a week and running twice a week) can be accomplished alone. Determine which actionable goals (such as getting to sleep on time and eating healthfully, which requires roommates to cooperate by not disturbing…
* = Data not available
(Forbes, Toyota income statement, 2013).
Examining the income statements, Toyota's income fell from the previous three quarters, and the fall was somewhat substantial. Given that GM's net income did not demonstrate the same pattern, it does not appear to be the result of cyclical changes in the automotive sales cycle. In addition, Toyota's total revenue and net income appear to be more directly and positively correlated that GM's revenue and net income.
A company's balance sheet is another way of summarizing the company's financial health. A balance sheet is a "financial statement that summarizes a company's assets, liabilities and shareholders' equity at a specific point in time. These three balance sheet segments give investors an idea as to what the company owns and owes, as well as the amount invested by the shareholders" (Investopedia, Balance sheet, 2013).…
Chu, M. (2012, March 27). Is GM a good stock to buy right now? Retrieved February 12, 2013
from Insider Monkey website: http://www.insidermonkey.com/blog/is-gm-a-good-stock-to-buy-right-now-11565/
Forbes. (2013). General Motors Company (NYSE: GM): Balance sheet. Retrieved February
12, 2013 from Forbes website: http://finapps.forbes.com/finapps/jsp/finance/compinfo/FinancialIndustrial.jsp?tkr=gm&period=qtr
Diversification of anking Returns Through
Greater Share of Non-Interest
Income and Off-alance Sheet Activities
The banking system was considered to be stable before the great financial crisis of 2007. The banking system faced the worst turmoil during that period due to the evolution of the nature of banking activities. anks started to employ diversify their sources of income. efore 2007, the one and only function of banks was to take deposits and lend money. Diversification of banking returns included many off-balance sheet activities and non-interest incomes into the features of the banks. The extra features are collectively known as shadow banking because of the lack of transparency in it. These activities increased the borrowing and lending and eventually, everyone was in a financial turmoil.
"The advent of shadow banking has fundamentally altered the nature of banking. Where once banks weremainly in the traditional business of taking deposits and making loans,…
Calmes, Christian, & Theoret, Raymond. "Bank Systemic Risk and the Business Cycle: Canadian and U.S. Evidence." Paper presented at Annual Conference of SocieteCanadienne de Science Economique, Canada, April 27, 2011.
Calmes, Christian and Raymond Theoret. "Financial Services."Lifting the Veil: Regulation and Shadow Banking (2011): 1-6.
Calmes, Christian, & Theoret, Raymond. "The Rise of Shadow Banking and the Hidden Benefits of Diversification." Paper presented at C.D. Howe Institute Conference, Canada, April 2011.
John. H, Boyd and Gertler Mark. "Are Banks Dead? Or Are The Reports Greatly Exaggerated." NBER Working Paper Series (1995): 2-7.
The four financial statements are the balance sheet, income statement, statement of cash flow, and statement of owner's equity. Briefly, the balance sheet is comparison of assets to liabilities and equity. This statement is indicative of a company's position at a specific time. The income statement is a record of a company's operations over a given period of time. It shows a company's expenses, losses and revenues and is indicative of the company's net income during that period of time. The statement of cash flows is intended to provide information about a company's cash receipts and cash payments for operations, investments and financing during an accounting period. Finally, the statement of owner's equity is intended to show changes in owner's or shareholder's equity from one fiscal year to the next. Owner contributions and any additional capitol, such as the sale of new shares, are added to the equity,…
Kurtz, D.L. (2010). Contemporary Business, 13th ed. Hoboken, NJ: John Wiley & Sons Inc.
U.S. Security and Exchange Commission. (2007, February 5). Beginner's guide to financial statements. U.S. security and exchange commission. Retrieved August 24, 2012, from http://www.sec.gov/investor/pubs/begfinstmtguide.htm
"Uses of the income statement in financial accounting." (2010). Financial-accounting.us, Retrieved August 24, 2012, from http://www.albany.edu/news/pdf_files/impact_of_aging_excerpt.pdf
In Module 2, the $35,000 worth of goods was never purchased, so that figure is irrelevant. Now with Module 3, we begin with a balance sheet that does not balance. To this, several changes are to be made. The company raised an additional $225,000, which balances because Common Stock increases by that amount, and the company receives that much Cash. The dividends represent a decline in cash of that amount, and a decline in Retained Earnings. The asset is covered by $400,000 in the land less $50,000 in cash, and the other $350,000 goes to Notes Payable. The result is as follows:
The first major adjustment that needs to be made, based on Module 2, is that the company needs to add back the $35,500 worth of inventory. This should never have been removed. The second adjustment is that the profit would have been higher, by $35,500 because…
One may define assets as those properties that are under the ownership or are the possession of a firm. Assets are divided into two like current assets and long-term assets. Long-term assets include land, buildings, and firm vehicles. Current assets are those assets that the firm can easily change their form of cash and they are perceived to take less than one year. Such assets include cash, debtors and stock (Vause, 2009).
This is the other group of assets apart from the current assets but current assets are expected to change their form within the period of one year (the normal business operating cycle). The major non-current assets are as follows: long-term investment, intangible assets, equipment, plant and property. We have other terms that people are used in place of non-current assets and they include long-lived assets, long-term assets and fixed assets just to…
Alexander, D., Britton, A., & Jorissen, A. (2007). International financial reporting and analysis. London: Thomson Learning.
Van, W.G. (2007). Municipal management: Serving the people. Cape Town: Juta.
Vause, B. (2009). Guide to analyzing companies. New York: Bloomberg Press
Long-Term Financial Planning
FedEx Corporation was established in 1971 and the company has four distinct business segments that include FedEx Express, FedEx Ground, FedEx Office and FedEx Freight. Over the years, the company has obtained 6-year of CAG (compounded annual growth of 5%). However, the company is likely to obtain similar CAG of 5.9% over the next 8 years based on current economic environment. (FedEx Corporation .2010.
The WACC (weighted average cost of capital) is the average interest rate that a company should pay in order to secure a project. Moreover, WACC is the average rate of return that a company must earn from its current assets to satisfy investors, shareholders and creditors. Since FedEx Corporation is always trying to create value for shareholders, the paper calculates the WACC of the FedEx to evaluate the company ability to generate returns from its assets.
Estimation of WACC of the…
FedEx Corporation (2010. Annual Report.USA.
The business that I am going to start is a small coffee microroastery and shop. The company will perform two basic functions. The first is a product function, the roasting of coffee beans. Green beans will be received by the company, roasted, and then both used in the shop and made available for a variety of retail channels. The second function will be a service function, based on the production and serving of beverages and light snacks. The staffing plan will be simple. The owner/manager/roaster will perform most of the management tasks associated with the shop. There will be an assistant manager who doubles with barista duties, as well as 4-6 part-time staff members, filling 3 FTEs in the barista/service function. This plan is based on experiences at other, similar operations, in addition to meeting a few other needs. One is the need to keep costs down, and…
Inc. (2000). Cash vs. accrual accounting. Inc. Magazine. Retrieved November 13, 2012 from http://www.inc.com/articles/2000/04/19194.html
IRS.gov (2012). Limited liability company (LLC). Internal Revenue Service. Retrieved November 13, 2012 from http://www.irs.gov/Businesses/Small-Businesses-&-Self-Employed/Limited-Liability-Company-%28LLC%29
KPMG. (1999). Internal control: A practical guide. KPMG. Retrieved November 13, 2012 from www.ecgi.org/codes/documents/kpmg_internal_control_practical_guide.pdf
Perez, W. (2012). Types of business organization. About.com. Retrieved November 13, 2012 from http://taxes.about.com/od/taxplanning/a/incorporating_2.htm
Tenet Healthcare Corporation
Tenet Healthcare Corp
This paper examines the financial statements of Tenet Healthcare Corporation, reviewing their important components and discussing their interrelationship.
Tenet's annual report for the year ending December 31, 2011 provides information on the firm's financial health. The balance sheets provide information about what the company owns and what it owes. The income statements provide information about how much money Tenet earned and spent, and the cash flow statements show information about the exchange of money between Tenet and other parties.
Tenet's Balance Sheet
Tenet's balance sheet provides detailed information about its assets, liabilities and shareholders' equity. Tenet's assets are what it uses to operate its business, while its liabilities and shareholders' equity are two sources that support those assets. Tenet's liabilities are amounts of money that it owes to others. Shareholders' equity is the amount of money invested in the company combined with retained earnings;…
Tenet Healthcare Corporation. (2012). Form 10-K for year ended December 31, 2011. Available at: http://www.tenethealth.com/Investors/Documents/Q4%202011%20Earnings/CY11%2010-K%20FINAL.pdf
This can be defined at the system level of the consultancy's network architecture. Finally the firewall of the systems will be defined also through the definition of system parameters throughout the network operating system running the entire firm (Malecki, 2012). There will be little resistance to change for each of these implementations as they are designed to protect and streamline the work being completed in the firm. There will also be a clearer sense of accountability over data security once the Practice Leaders and senior consultants realize that if they accidentally lose their iPhone, iPad or laptop all data will be erased immediately, which forces them to be more vigilant how they uses these systems and also how they are backed up.
Impact of the egulatory Environment
As the proposed research and advisory firm is a private corporation, it does not need to comply with the Sarbanes-Oxley (SOX) Act as…
Cox, J. (2009). iPhone winning over it security skeptics. Network World, 26(34), 1-1,12.
Hamblen, M. (2012). iPhone 5: Pros and cons in the enterprise. Computerworld, 46(17), 6-6.
Henry, E., Lin, S., & Ya-wen Yang. (2009). The European-U.S. "GAAP gap": IFRS to U.S. GAAP form 20-F reconciliations. Accounting Horizons, 23(2), 121-150.
Malecki, F. (2012). Next-generation firewalls: Security with performance. Network Security, 2012(12), 19-20.
Description of the Business
The business is a gourmet candy shop. The shop will sell gourmet candy that has been sourced from all over the world. The shop will operate with one storefront location, and there will be an Internet/mail order component as well.
The rationale for the business is simply. There is a growing trend towards hedonistic approaches to dining. We have seen in the past few years the rise of the bacon fetish, high end craft beer and coffee, cupcakes, the move of fine dining to the mass market and a full embrace by Americans of better quality indulgent goods. Much of this trend can be credited to the aging of the population, as people seek to maximize pleasure. They have the financial means to treat themselves, and seek to balance this hedonism with a desire to be healthy. The intersection of these ideals is where…
Bailey, E. (2013). Pros and cons of incorporation. Suite101.com. Retrieved November 14, 2013 from http://suite101.com/a/pros-and-cons-of-incorporation-a42401
FASB. (2013). International convergence of accounting standards. Financial Accounting Standards Board. Retrieved November 14, 2013 from http://www.fasb.org/jsp/FASB/Page/SectionPage&cid=1176156245663
IRS.gov. (2013). Publication 946. Internal Revenue Service. Retrieved November 14, 2013 from http://www.irs.gov/publications/p946/ar02.html#en_US_2012_publink1000270861
NCA. (2013). Profile of the U.S. candy industry. National Confectioners' Association. Retrieved November 14, 2013 from http://www.candyusa.com/content.cfm?ItemNumber=1607
Garmin was considered to be a company that was "well-run and positioned to grow" (Peters, 2006). The company's stock was trading around $93 per share at the time. The optimism surrounding Garmin was based on a strong balance sheet, technological innovation, double digit growth and the ability for the company to change direction. The company's core products, GPS systems for automobile consumers, were becoming viewed as valuable, if not essential, items, something that would have implied to an outside observer a strong long-run upside in demand (Pittsley, 2007).
Somewhere between its great starting position and this promised land, Garmin lost its way. The company, once lauded for its ability to "change direction," found itself unable to adapt to a major technological shift. In 2006, the smartphone market was relatively small, a niche business within the corporate telecommunications business. Palm and Blackberry were the dominant products. ith the iPhone, and later…
Bylund, A. (2010). Garmin's last gasp? Fool.com. Retrieved May 20, 2012 from http://www.fool.com/investing/general/2010/05/27/garmins-last-gasp.aspx
Hesseldahl, A. (2009). Garmin, TomTom slash prices amid Google threat. BusinessWeek. Retrieved May 20, 2012 fromhttp://www.businessweek.com/technology/content/dec2009/tc2009128_481006.htm
MSN Moneycentral: Garmin. (2012). Retrieved May 20, 2012 from http://www.businessweek.com/investor/content/jun2006/pi20060620_778234.htm
Peters, J. (2006). Time to home in on Garmin. Business Week/Standard & Poor's. Retrieved May 20, 2012 from
STI vs. USB
The capital accounts for the two banks reveal a significant difference in the price-to-book ratios. Suntrust Banks has an equity value that is higher than the market cap of the company, a favorable price-to-book ratio that implies the company is undervalued on the market. U.S. Bancorp has a more typical price-to-book ratio where the market value of the firm is higher than the book value. Part of this difference is that U.S. Bancorp is experiencing modest sales growth, while Suntrust is facing sales declines in excess of 5% annually, such that its expected future worth is lower than its current worth.
For banks, the primary asset is the net loans, along with a category known as "other earning assets," which the annual report for Suntrust reveals to be securities available for sale, or short-term investments that the bank hold and upon which it earns interest. Other assets…
MSN Moneycentral. (2013). Suntrust Banks. Retrieved February 16, 2013 from http://investing.money.msn.com/investments/stock-price?symbol=sti&ocid=qbeb
MSN Moneycentral. (2013) U.S. Bancorp. Retrieved February 16, 2013 from http://investing.money.msn.com/investments/stock-price?symbol=USB&ocid=qbeb
Suntrust Banks 2011 Annual Report. Retrieved February 16, 2013 from http://phx.corporate-ir.net/phoenix.zhtml?c=82273&p=irol-reportsAnnual
US Bancorp 2011 Annual Report. Retrieved February16, 2013 from http://phx.corporate-ir.net/phoenix.zhtml?c=117565&p=irol-reportsannual
In the case of Arctic, the company is relying, in terms of long-term financing, almost exclusively on retained earnings. Retained earnings can be defined as earnings that are "retained by the company to be reinvested in its core business or to pay debt," basically, a form of not paying out dividend to the shareholders and reinvesting profit. Retained earnings amount for 65.1% of total asset value, a similar proportion as the one in 2003.
Retained earnings play the same role at Polaris as well. In 2004, these amounted up to 46.2% of total asset value. On the Polaris 2004 balance sheet, on the other hand, the retained earnings are accounted for as shareholders' equity.
As a conclusion in terms of debt usage, both companies use no or almost no long-term bank debts to finance their activity and there is no financial leverage worth analyzing. In both cases, the shareholders' equity…
The return on assets is calculated by dividing net income by the total assets value. The return on assets was 13.1% in 2004 for Polaris, with 16.5% in 2003. We can observe a 3.4% difference in the return on assets here and this can be explained by noticing that the total assets value increased with over 18%, while the net income actually decreased in value. This means that the newly acquired assets have not yet begun to generate income from their activity.
At Arctic, the return on assets was 10.6% in 2004 and 11.8% in 2003. The slight decrease in Arctic's return on assets value can bear the same explanation as in Polaris's case: net income decreased, while the total assets value has actually increased over this period.
The return on equity value will actually measure the amount of profitability that the shareholder obtains from the company. It is calculated by dividing the net income
Business Financial Plan for Sweet Tooth Treats
Baking has always been a major part of my family life, and for generations there has been infamous cookie recipes past down from one cook to the next. Every holiday season, my cookies are notorious for being the best any gift receivers have ever had. Finally, I believe it is time to make my baking hobby and actual money making enterprise. I know I have the recipe, the potential customers, and options for both retail space and an online presence. The only thing missing is the initial push to make this hobby an actual business -- Sweet Tooth Treats.
Business Start Up Plan
The essentially product here is the various cookies, of different flavors and ingredients. I have several recipes for cookies, both permanent and seasonal variations. These products will be sold in both individual sales at a retail location,…
Colorado Small Business Association. (2012). The beginning balance sheet. Documents. Web. https://www.coloradosbdc.org/DocumentMaster.aspx?doc=4
Damrauer, Virginia Hire. (2010). One Good Cookie. National University. Web. http://www.academia.edu/346438/One_Good_Cookie_A_Business_Plan
Hub Pages. (2012). How to start your own cookie business from home. Small Business and Entrepreneurs. Web. http://kathrynvercillo.hubpages.com/hub/Start_Your_Own_Cookie_Business
Office of Financial Management. (2012). Generally Accepted Accounting Principles (GAAP). Accounting Principles. Web. http://www.ofm.wa.gov/policy/80.20.htm
Business Plan for a Financial Divorce Software
Business Plan Divorce Software
Business Plan relating to the Sales of a new Financial Divorce Software.
Business Plan relating to the Sales of a new Financial Divorce Software
Keys to Success
Legal Form of Ownership
Location and Facilities
Products and Service
Ps of Marketing
Financial Statements and Projections
evenue and Cost Estimate
Forecasted Profit and Loss Statement
Forecasted Balance Sheet
Financial planning is involved in every aspect of life. Individuals and businesses have to formulate their daily, monthly, and yearly budgets in order to achieve a balance between their incomes and expenditures.…
Association of Divorce Financial Planners, (2012). Divorce Financial Planning. Retrieved on July 7th, 2012, from
Blythe, J. & Megicks, P. (2010). Marketing Planning: Strategy, Environment and Context, 3rd Edition. U.K: Prentice Hall
Cadle, J., Paul, D., & Yeates, D. (2010). Business Analysis, 2nd Edition. Swindon: British Informatics Society
Francis, P. (2010). Creating the Marketing Executive of the Future Using Key Deming Principles, Journal of Executive Education, 9 (1): 127-138
Situation Analysis of Strengths and Weaknesses
Since acquiring Horniman Horticulture in 2002, revenues have grown 39.8% through 2005 (Pg. 140). With projected revenue growth of another 25%, over 2005, to 1.3 million, Horniman Horticulture is successfully capitalizing on their market. The recent product line expansion into mature plants offers the opportunity for greater profit margins and a diversified customer base.
However, while the overall efficiency of operations demonstrates results exceeding benchmarked competitors, the deteriorating cash situation exposes the firm to ever-greater risks from any disruption of daily operations or business cycle fluctuations. The cash balance erosion, as well as the significant increase in accounts receivable, illustrates a firm that is undergoing rapid growth without a strategy to manage and stabilize their burgeoning business.
The product line expansion offers a diversity of customer base, which can insulate the firm from loss of any particular client, and the increased profit…
Jim & Judy Choi's Bed & Breakfast
As Jim & Judy Choi's banker, no, they should not be congratulated on their "profit." Since they have not done anything related to their actual business activities and have not actually made any money from their business, there is no profit to address. Profit comes from making money in a business, not from saving money that would otherwise be used to prepare for that business. Many people do not understand the difference, however, and that gets them into trouble when they attempt to create balance sheets and keep their accounting books in order for their company. The Choi's, for example, have managed not to spend every dime they were loaned and that they previously had in the bank, but that is not the same thing as making a profit once their business has been opened. They can only make a profit once they…
Elliot, B. & Elliot, J. (2004). Financial accounting and reporting, London: Prentice Hall.
International Accounting Standards Board. (2007). The framework for the preparation and presentation of financial statements.
market values" UK Listed Companies evaluate companies Investor atios Profitability atios. With reference statement: require critically appraise importance market balance sheet UK listed companies critical assess a relevant range investor profitability ratios measuring performance.
Market value and balance sheet value
A British firm listed on the market is generally traded at its market value, regardless of its balance sheet value. At a simplistic level, the balance sheet value represents the value of the firm as it is computed within the organization and in terms of the company's resources, revenues and other internal values. The market value on the other hand is the value of the company as it is assigned by the multitude of players in the market, and which is often computed based on elements intrinsic to the market, such as profitability of the company, risks and so on.
At a more specific level, the two concepts…
2010, Investor ratios, Bized, http://www.bized.co.uk/compfact/ratios/investor2.htm last accessed on December 15, 2010
2010, Profitability ratios, Morningstar, http://news.morningstar.com/classroom2/course.asp?docId=145093&page=6&CN=COM last accessed on December 15, 2010
2010, Investopedia, http://www.investopedia.com last accessed on December 15, 2010
Investment tips: what are key investment ratios? Essortment, http://www.essortment.com/career/keyinvestmentr_sape.htm last accessed on December 15, 2010
Accounting is thought of by many as simply basic mathematics consisting of adding and subtracting totals to track a company's spending and expenses; however, accounting involves so much more. Accounting comprises of a multitude of financial concepts and transactions. This system covers a broad array of information but in this paper the current and noncurrent assets will be defined, contrasted, and compared. In addition, the order of liquidity and how this practice applies to the balance sheet will be reviewed. Accounting is the means of communicating the numbers and to be successful in business the numbers have to be known "cold." Therefore, it is imperative not only to communicate the numbers effectively but also to understand them to thrive in a world submerged with figures.
To understand assets, they first must be defined. Assets are resources such as land, computers, buildings, cash, and supplies owned by an organization.…
The industry average current ratio is 2.5 (MSN Moneycentral, 2009), so the Gap has less capacity to meet its current obligations than many of its peers. However, in the retail industry most firms have a large portion of their current assets tied up in inventory, which distorts the current ratio figures higher. The Gap's figure of 1.855 is strong and indicates that the company will have little difficulty in meeting its upcoming obligations.
Overall, the liquidity measures provide an indication of the company's short-term health. Low amounts of working capital or a poor current ratio can indicate that the firm is in short-term distress. The figures for the Gap in 2008 do not indicate a firm in financial distress. Rather, they indicate that the company will have little difficulty in meeting its upcoming financial obligations. The company has strong working capital figure and a high current ratio. The latter is…
The Gap Inc., 2008 Form 10-K. Retrieved August 17, 2009 from http://www.gapinc.com/public/Investors/inv_fin_sec_filings.htm
MSN Moneycentral: The Gap Inc. (2009). Retrieved August 20, 2009 from http://moneycentral.msn.com/investor/invsub/results/compare.asp?Page=ProfitMargins&Symbol=GPS
The financial results for Starbucks and McDonalds over the past couple of years are as follows:
This analysis shows that Starbucks has seen its revenues grow faster than its cost of goods sold, which is normally taken as an encouraging sign. When firms are able to grow their margins, they are able to have better bottom line profitability, and it also shows that the company's market power is improving. For McDonalds, the COGS grew at a slightly faster rate than the revenues. This means that to a minor extent, McDonalds was less able than Starbucks to pass along cost increases in factor inputs than Starbucks was last year.
An interesting point of analysis is that Starbucks saw all of its balance sheet line items increase much more quickly last year than the revenue or COGS. The receivables, payables…
According to Frank Ahrens (2010, April 20) not only did Lehmann Brothers hide this practice from the investing public, rating agencies, and government regulators, they even deceived their own board of directors. "In this way Lehmann reversed engineered the firm's leverage ratio for public consumption."
In 2008 analysts frequently asked about the means by which the company was able to achieve reduction in risk. Lehmann Brothers' company official reported reducing its leverage through the sale of less liquid asset categories claimed and simultaneously claimed they were trying to give the group a great amount of transparency on the balance sheet. (Ahrens, 2010, April 10)
Lehmann Brothers executives are currently under criminal investigation. Subpoenas in grand jury probes were issued as early as October, 2008. Andrew Clark (2010, March 12) reports the problem is that it isn't easy to prove fraud in many of these cases. A top law or accounting…
Ahrens, F. (2010, April 20). Lehmann brothers, the evil repo 105s and the danger of off-balance-sheet deals. washingtonpost.com, Retrieved on May 13,2010, from C:UsersOwnerDesktop
epo 105Economy Watch - Lehman Brothers, the evil Repo
105s and the danger of off-balance-sheet deals.mht
Clark, a. (2010, March 12). Lehman Brothers: Repo 105 and other accounting tricks.
5% of assets to 24.6%, with a corresponding reduction in liabilities. This has been achieved with a slight reduction in the company's borrowings from 42.65% of assets to 42.03%. hile deferred taxes have increased, the company has seen its post-retirement benefits liabilities reduced. ith respect to the structure of Diageo's assets, non-current assets have been reduced slightly. Non-tangible assets (primarily intellectual property) did not change significantly in value. Diageo was able to reduce its inventories slightly in 2010, in addition to reducing its receivables. These moves allowed Diageo to improve its working capital management -- a greater percentage of its assets are held in cash and equivalents.
Overall, the balance sheet shows that the company is growing steadily. Diageo's total assets have increased 21.6% over the past two years, with increases coming in many key categories. Of note is one category that has not grown, receivables, illustrating that Diageo has…
Diageo 2010 Annual Report. In possession of the author
Diageo.com (2011). Retrieved April 12, 2011 from "History" http://www.diageo.com/en-row/ourbusiness/Pages/History.aspx and "Half Year Results" http://www.diageo.com/en-row/NewsMedia/Pages/resource.aspx?resourceid=724
MSN Moneycentral: Diageo. (2011). Retrieved April 12, 2011 from http://moneycentral.msn.com/investor/invsub/results/statemnt.aspx?symbol=DEO
The horizontal analysis showed that FedEx's profits in 2009 were just 5% of their profits in 2007. Given that EBIT contributes to the T3 component of the Z-score, which is the most significant component by weighting, this would explain why the Z-score dropped so much. The other major contributor to the Z-score is the drop in the company's market cap. The market cap is deemed important in part because the market's view of company reflects the most known information at the time. The market has a strong ability to predict financial distress. A depressed stock price indicates that investors need a greater percentage return on the expected future cash flows from the company in order to invest -- an indicator that the market believes the firm's risk level has increased. The market cap contributes to the T4 component, which is the smallest component of the Z-score. However, the decline in…
2009 FedEx Annual Report. Retrieved February 4, 2010 from http://files.shareholder.com/downloads/FDX/791567587x0x312397/557bd7f3-8372-4afe-a664-1fdb82a488b0/FedEx2009AnnualReportl.pdf
Loth, R. (2010). Financial ratio tutorial. Investopedia. Retrieved February 4, 2010 from
The Advantages, Disadvantages, and Overall Utility of Income and Balance Sheets: A Case Study
From the various high profile accounting scandals of the past decade, from the Enron, World Com, and other scandals in close proximity in the early 2000s, to the creative accounting and asset bundling that helped to precipitate the global economic meltdown (and that made certain individuals at financial institutions like Goldman Sachs incredibly wealthy), the world of accounting has been thrust into the public limelight fairly frequently in the recent past. Greater scrutiny of accounting records and stricter regulations regarding the recording and reporting of accounting information is now being demanded by many governments the world over, with companies of course compelled to comply. This of course begs the question, how useful are these accounting records when making business decisions?
This paper will examine the degree to which some basic accounting figures proved advantageous…
Food Drink. (2004). Morrison sweetens Safeway offer. Accessed 12 March 2011. http://www.foodanddrinkeurope.com/Retail/Morrisons-sweetens-Safeway-offer
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