The elimination of short-term debt shows that Home Depot, Incorporated is not using such debt to meet short-term cash requirements. The cause of the elimination of short term debt may be caused by the improved cash position and the economy. Home Depot, Incorporated’s financial position and ratios look good. In fiscal year 2008, the long-term debt-to-equity ratio was 54.4% compared to fiscal year 2007’s 64.3%. In fiscal year 2008, the return on invested capital of continuing operations was 9.5% compared to fiscal year 2007’s 13.9%.
The inventory decrease represents a future value of $13,416.27. To evaluate this result is subtracting the present value to the future value. In the Figure 4, can see the calculus for the results. Figure 4 Calculating Present Value and Future Value [pic] In the type of industry you belong to La Boutique "C", a result of decrease in inventory as projecting the forecast does not necessarily mean lost. This decrease should be tied to a plan and sales strategies and goals established in the organization.
Answer | | If new debt is used to refund old debt, the correct discount rate to use in the refunding analysis is the before-tax cost of new debt. | | | The key benefits associated with refunding debt are the reduction in the firm's debt ratio and the creation of more reserve borrowing capacity. | | | The mechanics of finding the NPV of a refunding decision are fairly straightforward. However, the decision of when to refund is not always clear because it requires a forecast of future interest rates. | | | If a firm with a positive NPV refunding project delays refunding and interest rates rise, the firm can still obtain the entire NPV by locking in a low coupon rate when the rates are low, even though it actually refunds the debt
What is financial risk? (0.5 points) possablity to lose money. What is diversification? (0.5 points) Spreading investments What is risk tolerance? (0.5 points) the amount of risk you can handle.
E. Usually when operations get close to capacity limits, costs go up. Bottlenecks are more common, there may be congestion in the plant, and production could slow down. These costs need to be considered when setting a price for a special order that will move an organization out of its normal operating range (relevant range). In addition, managers need to think about whether the business will lose some customers because demand cannot be filled. ------------------------------------------------- 4.42 Make or Buy, Qualitative Factors - The Vernom Corporation A.
(0.5 points) 5. What is a debt settlement program? (0.5 points) Debt settlement programs are programs that claim they can get you out of debt by negotiating your debt to a much lower amount and working out a payment plan with your creditors. 6. What is
From 1974-1978 all the major firms saw increased sales and net income but as time progresses and the market stops growing the firms that have best positioned themselves will begin to dominate the competition. An indicator firm success can be found in looking at firm Return On Sales (ROS). ROS = Net Income/Sales Revenue, it is a measure of firm efficiency and firms with higher ROS are demonstrating an ability to control costs and/or charge a higher price for their product(s) as opposed to competition. Lower ROS firms have lower income in relation to revenue and increasing net income is harder. In 1978 Emerson (Beaird-Poulan) and Electrolux (Husqvarna) are the industry leaders in ROS at 7.9%.
At this point, sales are virtually diminished, pricing is considerably offset from market trends, and the ability to maintain a level of profitability becomes a major challenge. An organization can put forth efforts in the attempt to reverse, or otherwise avoid, the decline stage by a few idealogic strategies, all of which are designed to readapt and conform to newly enhanced demands by the industry and its respective consumers. Most importantly, an organization can empower itself to readapt and act in a proactive manner by analyzing market trends and determining the future scope of a certain type of product or service within a reasnable timeframe prior to the onset of saturation and declination. Perhaps it would be in the best interest of an organization to produce/ provide a product of similar fashion, yet a unique alternative, before actually retiring or discontuing a product. For production to end indefinitely of a specific good, an alternative must be researched, produced, and introduced into the marketplace at the same time to create an equilibrium of market introduction of one product and declination of another.
In this section I will look more closely at what creates a competitive advantage between market competitors towards customers at the same competitive level. J Sainsbury appears have solid financial position which is reflected in the grew of 7.1% of the sales and the £738m of Underlying operating profit that up raised 10.0% in 2011. (Sainsbury, 2011). However Dave McCarthy, an analyst at Evolution Securities affirm that Sainsbury’s remains the most susceptible supermarket because they have both the weakest cash flow and the weakest margin in the industry of groceries (Financial times, 2011). Considering that the net cash from operating activities is reduced 18% in 2011, which can affect their aims to expand.
Cost Accounting, 14e (Horngren/Datar/Rajan) Chapter 18 Spoilage, Rework, and Scrap Objective 18.1 1) Managers often cite reductions in the costs of spoilage as a(n): A) major justification for implementing a just-in-time production system B) measurement of improved output quality C) immaterial item that is not to be tracked D) indication of improvement in the accounting system Answer: A Diff: 2 Terms: spoilage Objective: 1 AACSB: Analytical skills 2) Unacceptable units of production that are discarded or sold for reduced prices are referred to as: A) reworked units B) spoilage C) scrap D) defective units Answer: B Diff: 1 Terms: spoilage Objective: 1 AACSB: Ethical reasoning 3) Unacceptable units of production that are subsequently repaired and sold as acceptable finished goods are: A) reworked units B) spoilage C) scrap D) defective units Answer: A Diff: 1 Terms: rework Objective: 1 AACSB: Reflective thinking 4) Costs of poor quality production include the: A) opportunity cost of the plant and workers B) effect on current customers C) effect on potential customers D) All of these answers are correct. Answer: D Diff: 2 Terms: spoilage Objective: 1 AACSB: Reflective thinking 5) Material left over when making a product is referred to as: A) reworked units B) spoilage C) scrap D) defective units Answer: C Diff: 1 Terms: scrap Objective: 1 AACSB: Reflective thinking 6) A production process which involves spoilage and rework occurs in: A) the manufacture of high precision tools B) semiconductor units C) the manufacture of clothing D) All of these answers are correct. Answer: A Diff: 2 Terms: spoilage, rework Objective: 1 AACSB: Reflective thinking 7) Some amounts of spoilage, rework, or scrap are inherent in many production processes. Answer: TRUE Diff: 2 Terms: