Required 1.Provide a brief written description of the proper accounting treatment, including how the extra $10 paid per share is recorded. Target Inc. buying back their common stock, but they pay more $10 than the market value. Hence, their purchase cost is taken into account instead of market value. Also the extra share will not be recognized as profit or loss but instead capitalized as treasury shares. 2.
Chapter 01 - Why Are Financial Institutions Special? Chapter One Why Are Financial Institutions Special? True/False 1-1 Prior to the financial crisis of 2007-2008, J.P. Morgan Chase was the largest bank holding company in the world and operations in 60 countries. Answer: F 1-2 As of 2009, U.S. FIs held assets totaling over $35 trillion Answer: T 1-3 Financial institutions act as intermediaries between suppliers and demanders of money. Answer: T 1-4 If a household invests in corporate securities and does not supervise how the funds are invested or used by the corporation, the risk of not earning the desired return or not having the funds returned increase.
Businesses will charge the GST when the service or product is passed on to the consumer. If your turnover is less than $75,000 then you don't have to register for GST although you may do so. All other businesses, with minor exceptions, need to register for GST. The GST Act 1999 governs the GST - A New Tax System (Goods and Services Tax) Act 1999 http://www.austlii.edu.au/au/legis/cth/consol_act/antsasta1999402/ Question 2 What are audits and why are they carried out? (25 words) An audit is an official inspection of a business.
e. Although its stockholders are insulated by limited legal liability, the corporation's legal status does not protect the firm's managers in the same way; i.e., bondholders can sue its managers if the firm defaults on its debt, even if the default is the result of poor economic conditions. 3. Which of the following statements is CORRECT? a. In a regular partnership, liability for other partners' misdeeds is limited to the amount of a particular partner's investment in the business.
While the traditional accounting methods are good to measure past performance and financial stature, it does not allow for managers to see the impact or value that marketing has on the bottom line. For a manager to evaluate the impact of marketing they will need view the current marketing expenditures, sales, and profits to make a conscious decision on what methods are working. While I think placing marketing as an investment is a good concept, determining the value is too biased without a common measurement between all companies in a similar industry. Without understanding the current value of marketing, the marketing budget will be one of the first items cut when the business is in a downturn. Technology in all industries has increased dramatically over the past 10 years so being able to understand the current value of marketing methods should not be as strenuous as it has been in the past.
To equity (levered free cash flow): Same as firm FCF and then less interest and any required debt amortization. 2. What are the four basic ways to value a company? Market comparisons/trading comps/comparable companies: Metrics, such as multiples of revenue, earnings and EBITDA like P/E and EV/EBITDA can be compared among companies operating in the same sector with similar business risks. Usually a discount of 10 percent to 40 percent is applied to private companies due to the lack of liquidity of their shares.
Audi's global sales rose 8.3% to 1.58 million vehicles in 2013 however despite the increase in revenue, the net profit fell 7.7% ($5.57billion) and the operating profit margin fell to 10.1% from 11% the previous year. Based on this one could assume Audi is experiencing diseconomy of scale. But when you dig deeper into their situation the reasons for a lower net profit is not because of a “per-unit” cost of production which would truly mean they are operating as a diseconomies of scale. The true reasons appear to be because of their expansion investments. As per the article Audi “warned that profit would be hit by investment in new models and tougher climate regulation”.
The analysis will develop a financial plan based on financial data and statements from the last annual report. Specifically financial data that estimate future costs and revenue. These estimates are based on the fact that Microsoft is a monopoly with a low rate of sales changing its revenue. The use of sales forecasting will produce the estimated revenue. Over the past three years, Microsoft's revenue has risen a 5.5% from 2012 to 2013 and 5% from 2011 to 2012.
Accomplishing both of these would require an increase in long-term debt of about $1.8million dollars based on calculating Alliance’s external financing need. The investment of the $16million in capital expenditures should be given priority as the potential cost and loss of sales due to a failure of Alliance’s fixed assets would serve to erode the value of Alliance to its owner National as well as make Alliance a greater credit risk for the institutions who own its outstanding debt. An example of the type of financial harm that could be caused by a malfunction of Alliance’s plant and equipment was demonstrated in 2004 when Alliance experienced an earnings decline of nearly 6.5% despite revenues increasing by over
As stated by US. GAAP, which also showed in exhibit 7, “Revenue and gains are not recognized until realized, realizable or earned.” In our opinion, only when B&L satisfies the three criteria above can the company record an increase in revenue. Now, we are going to explain in details. First of all, by “realized”, it means that entities have the claims to cash or in other words, it is promised to collect money. However, in this case, “B&L has to increase the credit limits of 11 of its distributors and at least one case the limit was increased by more than 100%...placed many of 1 BUSI 610 Case#1