Question 1. Identify 3 inherent risks of Wesfarmers. I. Nature of entity’s business: * Wesfarmers main business is retail. This increases the inherent risk: * There could be problems like slow moving inventory for Target, Kmart or Officeworks * Also consumer preferences and tastes change frequently so this also increases the risk for slow moving stock * There are a lot of cash dealings.
Economic costs of inflation- Inflations economic costs would include damage to competitiveness as high inflation could cause spiralling price multiplier effect; as prices go up workers would demand higher wages so increasing business costs and another round of price rises to maintain business profits- making exports for expensive, thus reducing the demand for them causing a decrease and AD domestically. Additionally this may lead to unemployment as more costs to the firm i.e. menu costs. Change in inflation could also cause uncertainty to consumers/businesses to spend and invest as they don’t know what the future holds, this can decrease confidence in the market and potentially, in the longer term, cause and reduction in AD. Economic costs of deflation- deflation has proved to have several economic costs, the main cost is that it encourages differed expenditure where people’s expectations change and they delay spending in the hope of getting a better deal.
(Hayek, 2008) When wages go up so does the cost of the production, which increases the cost of the consumer goods, and inflation goes up. The only way to sustain this is to have a high money supply. This will cause interest rates to decrease, according to Hayek; if they decrease it can cause investments to be insecurely high, leading to an economic bust-which is how the business cycles work. If a centralized planner is created to watch the industries and when they start failing, a stimulus package will have to be made to support and pick it back up. If the necessary data to watch the
Following the merger of the two companies in 1991, the expectation of increased sales and profitability, in addition to automation development, was met with several obstacles. The primary problems were a combination of an aggressive growth and capital expenditure plan that was derailed by questionable financial performance, operational inefficiencies, and the ultimate loss of cash flow to run the company.
▪ Frictional unemployment ▪ Structural unemployment ▪ Full unemployment ▪ Cyclical unemployment 2. Globalization that allows governments to pursue expansionary policies can be dangerous because it can lead to: ▪ A reduction in the debt ceiling ▪ Goods price inflation ▪ Asset price inflation ▪ Goods price deflation Complete Answers here ECO 372 Final Exam 3. Macroeconomics is: ▪ The
Leslie Fay Companies 1.) Clearly Inventories was a big item to address along with Accounts Receivable. Sales and gross profit were stellar in a time of industry unease. Furthermore Accounts Payable decreases as a percentage of current liabilities while Inventories increase as a percentage of current assets. This is an implausible trend on the Balance sheet that BDO should have investigated further, especially with Leslie Fay’s outstanding Income Statement.
Those who consider it to be a negative term, mainly the average consumer, would define price gouging as taking advantage of or exploiting in times of need by charging unfair and unreasonable prices beyond normal. On the other hand, a business owner or an entrepreneur would define it as turning a profit on goods which have suddenly become much more expensive to obtain or produce because of increased demand possibly due to an emergency or sudden event. However, some free market economists reject the term altogether and suggest that “higher prices can be viewed as a valid system for rapidly distributing scarce resources to those who need the highly desirable resources and sets off an economic chain reaction that ultimately remedies the shortages” (Price gouging, 09). Over thirty of the states in America have anti-gouging laws but the definition of price gouging vary from “excessive and unjustified” price increases or “unconscionable pricing”, to percentages amounts of previous prices, to “unjust or unreasonable profits in the sale of necessities” (Antitrust - Fuel and Energy Committee, 06). So price gauging may not be easily defined but it does mean something to those it affects.
Consumer price and producer price in 2009 to 2012 continue to drop and raise the price for consumers was not steady. The direction and magnitude of price change in the Producer Price Index for finished goods anticipates a similar change in the Consumer Price Index for all items. When this assumed relationship is contradicted by the actual movements of the two series. The answer is that conceptual and definitional differences between the PPI and CPI—differences which are consistent with the uses of the two measures—contribute to the differences in their price movements. A primary use of the PPI is to deflate revenue streams in order to measure real growth in output.
SEC needs to know the nature of such activity in such time and needed to know if it is normal in Biovail business. Some companies, deliberately, try to sell more at the end of financial periods and get rid of inventory in order to inflate reported revenues. This action has a big effect on reported revenues, especially when the agreement structure is FOB Shipping Point. This behavior creates a “channel stuffing” which simply means that large quantities of the product are pushed to through the supply chain leaving distributors with quantities larger than what they can sell. As stated in the case, many companies behave in such manner without a disclosure and blame it on seasonal nature of demand for their
Many offices have employees participate in conference calls using technology such as Skype or various other VOIP services to communicate with satellite offices or international clients. Because of the rapid pace in which technology is advancing, it is also necessary to keep upgrading your skills to meet those demands and stay competitive in your position. In Contrast to a specific set of skills is a broader knowledge or certain set of “soft skills” which are also paramount. Interpersonal skills are vastly important because they are what create a good first impression when applying for a job. A favorable first impression and interview will “make it or break it” for many people in this competitive job market.