The preparation of our consolidated financial statements in conformity with generally accepted accounting principles requires us to make estimates and assumptions that affect reported amounts of assets, liabilities, revenues, expenses and disclosure of contingent assets and liabilities. Estimates are used in determining, among other items, sales incentives accruals, tax reserves, stock- based compensation, pension and retiree medical accruals, useful lives for intangible assets, and future cash flows associated with impairment testing for perpetual brands, goodwill and other long- lived assets. We evaluate our estimates on an ongoing basis using our historical experience, as well as other factors we believe appropriate under the circumstances, such as current economic conditions, and adjust or revise our estimates as circumstances change. As future events and their effect cannot be determined with precision, actual results could differ significantly from these estimates. First of all, these estimates play important roles in the revenue cycle accounts.
Week 2 Discussion Questions DQ#1: How do you define strategic planning? What are some differences between strategic and financial planning? What financial problems might an organization encounter when implementing a strategic plan? I believe strategic planning is the process, which takes place to set organizational goals to meet the expectations of the mission and direction of the organization. Strategic planning focuses on the long-term goals of an organization, therefore it differs from financial planning.
This includes the cost of debt to debt holders and cost of equity (including preferred stock and common stocks) to shareholders. WACC is calculated considering the relative weights of each component of the capital structure- debt and equity, and is used to see if the investment is worth taking. So it is the minimum return that shareholders and creditors require for their investments with the company. Moreover, the WACC is calculated using the following equation: WACC = (Percentage of equity) x (Cost of equity) + (Percentage of debt) x (Cost of debt) WACC = [E/ (E + D)] x (Cost of equity) + [D/ (E + D)] x (Cost of debt) x (1-t) It is important to estimate a firm’s cost because it affects the capital budgeting, financing methods and the performance of the firm. For each one the WACC has different importance.
The financial planner should analyze your information to assess your current situation and determine what you must do to meet your goals. Depending on what services you have asked for, this could include analyzing your assets, liabilities and cash flow, current insurance coverage, investments or tax
ACC111 - Accounting Principles I Allissia Henz 8/18/2013 TARGET CORPORATION FINANCIAL ANALYSIS AND INTERPRETATION Financial analysis refers to a process individuals use to appraise the financial condition of a given firm or organization. Usually this can be done by the firm itself internal financial analysis to help it allocate resources wisely or externally by other individuals such as future shareholders, creditors, unions, competitors among others to gain a general overview of a firm’s financial condition. Among the financial ratios that are useful include liquidity, working capital current ratio among others. In this task I will calculate the working capital, turnover ratio and current ratios for Target Corporation for the years 2004 through 2006. From 2004-2006: Working Capital=Current Assets – Current Liabilities For 2006: Working capital = $14,405.
D. Available evidences regarding clearing of payments or transactions that took place between when the mailed payments were received and the specific dates when the payments were posted in the company’s bank account. In view of the above, as the CFO, accounts receivable can be brought back in line by executing the under mentioned activities in the correct departments. 1. Preparation of aging accounts receivable schedule and to review of existing credit collection policies, standards and terms.-the finance department is responsible for this activity. The objective of this activity is to characterize existing accounts receivable and to classify them in the correct manner of current and outstanding.
This also includes educating staff about the responsibilities of maintaining costs. What are the reports that can be used for financial planning in an organisation? Profit and Loss Balance sheet Revenue and Expenditure report Cash flow statement Debtors and Creditors reports What is the process for preparing budgets or other financial plans? 1. Identify data that needs to be collected.
Net Present Value The NPV or Net Present Value is the difference in the present value of the way cash flows in and the present value of the way cash flows out. NPV takes into consideration the returns and inflation as it compares the future value of a dollar to the current value of a dollar. Using NPV in capital budgeting, each company is able to determine if an investment of a project should be taken into consideration. Positive cash flow for any investments or projects happen when the NPV is positive. Both Company A and Company B question future cash flows that will be generated over the first five years of operation.
Accounting Overview Week 1 U01A1 Financial Accounting Assignment U01A1 Questions 1-14 1. What is the primary objective of financial reporting for external users? The primary objective of financial reporting for external users is to provide useful information for decision making for primarily investors and various external parties in making sound financial decisions in review of provided useful economic information. 2. Define the following: a.
You could pull the money out and use it towards the house. 2. How many months' worth of expenses do you think your financial reserve should include? Describe at least two reasons for this decision. (3-6 sentences.