In the case of Marriot International, Ernst & Young LLP audited and reports their opinion on Marriot International’s 10-K report. “In our opinion, the financial statements referred to above present fairly, in all material respects, the consolidated financial position of Marriot International, Inc. at December 30, 2011 and December 31, 2010, and the consolidated results of its operations and its cash flows for each of the three fiscal years in the period ended December 30, 2011, in conformity with U.S. generally accepted accounting practices.” References Marriot International, Inc. (2012). Report of independent registered public accounting firms. Retrieved from http://investor.shareholder.com/MAR/marriottAR11/financials/ipafreports_1.html 6) Of what use, if any, are the notes to the financial statements? The notes to the financial statements provide basic details about the statements, on the Marriot International, Inc’s 10-K provided detailed & extensive notes.
Problems: Easy Problems 1-6 • 5-1 Bond Valuation with Annual payments Jackson Corporation’s bonds have 12 years remaining to maturity. Interest is paid annually, the bonds have a $1,000 par value, and the coupon interest rate is 8%. The bonds have a yield to maturity of 9%. What is the current market price of these bonds? 80*7.1607+1000*.3555 = $928 • 5-2 Yield to Maturity for Annual payments Wilson Wonders’s bonds have 12 years remaining to maturity.
Analysis of Financial Position of Berry’s Bug Abstract The purpose it to analyze financial position of the company for the year ended 2008 as compared to year ended 2007. The techniques of horizontal, vertical and ratio analysis have been used for this purpose. Ratios Analysis The liquidity ratios shows that the company ability to pay off its current liabilities in the year 2008 is better than 2007. As current ratio increased by 2.42 and acid test ratio increased by 2.31 times in 2008 as compared to 2007. However, the account receivable turnover and inventory turnover ratios went down in 2008 as compared to 2007.
Lesson 10: Attention Shoppers 1. Discuss whether the structure of the executive compensation program is consistent with the corporate strategy for each company. At a minimum, consider the mix of compensation (i.e. fixed vs. contingent, short term vs. long term, accounting or stock, price-based vs. non-financial based). In your opinion, does the compensation program motivate executives to achieve strategic success?
P7 Solvency is when a business is able to pay is expenses as it has money available within the business. To determine solvency, businesses can use ratios such as current ratio and acid test ratio. These ratios allow businesses and potential investors to see how well that are able to meet their liabilities. Current Assets Current ratio = Current liabilities The acid test ratio shows the assets compared to liabilities, like the current ratio, but by taking out the stock figure from the current assets, it shows how well a business can meet its liabilities without having to sell stock, Current assets - stock Acid test ratio = Current liabilities Profitability Ratios can also show how profitable a business really is either as a snapshot or over time. There are three ways of working out how profitable a business really is: * Gross profit percentage – This calculation shows gross profit as a percentage of the turnover.
Assume that the subsequent audit and / or additional tax and penalties result from the taxpayer’s use of an inventory reserve account, applying a 10 percent reduction to inventory over three (3) years. Discuss the applicable federal tax laws, regulations, rulings, and court cases related to the inventory write-downs, and explain the specific relevance of each to the
CCompany Financial Analysis In doing the company financials a couple of key things become apparent. One of the biggest factors in the financials is the consistency in Costco’s growth over the past four years. The four profit margins (Total Revenues, operating income, net profit margin, and Diluted net income per share) have for the most part been rising for the last four years. Costco may look like it’s not growing but having these constant margins along with the growth in revenues means that the profit (bottom line) for Costco is increasing. Costco is doing great job in making sure that revenues constantly grow as shown below while maintaining a proportional amount of expenses to keep the profits the same or a little high from the previous year.
Your boss has developed the following set of questions you must answer to explain the U.S. financial system to Della Torre. A. Why is corporate finance important to all managers? Corporate finance provides managers the ability to identify and select strategies, and projects. Additionally it allows for managers to forecast funding requirements for their company, and creates the ability to plan strategies for acquiring funds.
This is just one of many statements that investors will look at when looking into a company whether it is because they want to invest or are shareholders. Information from the income statement shows the users the activity of the company. The gross profits and the expenses are also important because of the profit. Expenses give the net income or (net loss) for the accounting period in question. These are important to the investors who are looking at the company but also to managers.
In order to give the advices on how the purchase of PacifiCorp affects the value of shares in Berkshire Hathaway, I will analyze some critical issues related to this case. Intrinsic Value The return on equity and the cost of equity must be determined to calculate the appropriate intrinsic value of PacifiCorp. Table 1 shows the appropriate intrinsic value of PacifiCorp. I assume the initial investment of $9.4 billion is discounted for the 10 year time horizon. During 10 years, the investors will reinvest all the cash flows into the company, so maintaining the growth of 7.45% each year.