How much total income tax will Custom Craft Services and Jaron pay (combining both corporate and shareholder level tax) on the $200,000 of income if CCS pays Jaron a salary of $150,000 and distributes its remaining after-tax earnings to Jaron as a dividend? c. Why is the answer to part b lower than the answer to part a? ?
Depreciation affects cash flow by reducing the amount of cash a business must pay in income taxes. 3. Calculate the current and quick ratios based on the projected balance sheet and income statement data. What can you say about the company’s liquidity position in 2013? AS the current and quick ratios both went down over the past year, I am concerned that the company liabilities may be rising faster than assets and we may not be able to liquidate assets quickly enough to cover debt, if necessary.
As this market sector is highly competitive the company follows a prospector strategy, which is the most forceful of the four main aggressive business strategies. This calls for maximizing expansion into new markets and robust promotional activities that generate new opportunities. Consequently, its organizational structure is highly decentralized in order to allow greater autonomy of the various divisions in seeking a greater market share. Other characteristics of this strategy are headhunting new talent, often in an opportunistic manner from the competition, high product failure or rejection by the target market, and price skimming in order to recapture overhead and R & D costs. Motors and More’s center of operations are located in the southern United States in a municipality with a population not exceeding 30,000 and has a low
While the current liability dropped from 25.6% in 2003 to 24.3% in 2004, it is apparent that this company has allocated for this as a long-term debt since it rose from 23% of total liabilities in 2003 to 26.4% in 2004. Lucent Technologies equity structure enhanced from a shortage representing a negative in their total liabilities and shareholder’s equity in the year of 2003 when it is compared to the year of 2004. Their equity position would be considered a deficit, but becomes less of an issue as the years pass. Lucent Technologies Case P.3 3. What concerns would investors and creditors have based on only this information?
The company has exceeded its goal of more than 50 new product launches during 2009. The company had segment operating income of $275 million in the third quarter of 2009, up from $266 million in the 2008 third quarter and $24 million in 2009’s second quarter. Compared to the prior year, third quarter 2009 segment operating income reflects continued weak industry demand, which resulted in a negative volume impact of $64 million and under-absorbed fixed costs of approximately $107 million. The 2009 quarter benefited from $207 million in lower raw material
This calculates how much of the business is financed through private investors; it is also expressed in percentage form. Generally speaking, as a firm's debt-to-equity ratio increases, it becomes more risky because if it becomes unable to meet its debt obligations, it will be forced into bankruptcy. (Glakas) Of the three companies, Wal-Mart has the lowest total debt ratio (.62) as well as the lowest overall debt to equity ratio (1.65). Target finds itself with similar footing at .65 and 1.89 respectively, however Kroger has over 80% of its operations (.81) financed with debt and has the worst three year average when it comes to debt to equity with 4.40 times.
Regarding operating gains and losses, in 2005 Tiffany realized gains of 33.8 million versus 150.7 million in losses in 2004. However, more importantly, Tiffany & Co. decreased inventories in fiscal 2005 from 175.4 million to 43.6 million. This significant reduction in inventory expense within its cash flow operations aided in Tiffany’s substantial increase in cash reserves for fiscal 2005. Increased Inventories and Operating Losses in 2006 In comparison, Tiffany’s net cash reserves in 2006 decreased to 176.5 million from 393.6 in the prior year. The company’s net cash from operations also decreased from 262.69 million to 233.58 million in 2005, a difference of 29.1 million.
Rivalry The rivalry in the search based advertising market is intense because it is quite a huge market generating $450 billion earnings worldwide. The demand in this market is high and is constantly growing. Google experiences major profits in this market because of its auction methodology. Google’s stated goal is to “organize the world’s information” (Google, 2008), and to merit they have created many complimentary products to their main Internet search service. Google has the largest Market share in this industry and this helps them to improve the quality of their search results and targeted ads more quickly than their competitors.
In 2003 Jeffrey Immelt received a total of 7403435 in annual compensation as well as 4176576 worth of exercised SAR’s, totaling 11580011 of cash. Out of that, 4.325 million (cash bonus) came as subjective compensation. Both, subjective award and a prespecified performance-based award schemes have their upsides and downsides. But in one particular aspect, a subjective award has an advantage. Imagine a manager, who knows that things are not going to be good this year for the company.
Valuation Questions Question 1 Union Pacific Railroad reported net income of $770 million in 1993, after interest expenses of $320 million. (The corporate tax rate was 36%.) It reported depreciation of $960 million in that year, and capital spending was $1.2 billion. The firm also had $4 billion in debt outstanding on the books, rated AA (carrying a yield to maturity of 8%), trading at par (up from $3.8 billion at the end of 1992). The beta of the stock is 1.05, and there were 200 million shares outstanding (trading at $60 per share), with a book value of $5 billion.