3. RETURN ON CAPITAL EMPLOYED (ROCE) NET PROFIT/CAPITAL EMPLOYED X 100 = % (NB use net profit figure before tax has been taken out) (For capital employed see Financed By total on Balance Sheet) Leave the formula in. Now add in the figures from the Income Statement or Balance sheet and calculate the ratio. Then describe what this ratio shows and explain what it means. LIQUIDITY 4.
Full Disclosure Paper Gabriela Jimenez ACC/421 Intermediate Financial Accounting I Instructor: Beverly Halfacre Due on 03/17/08 What is the full disclosure principle in accounting? The full disclosure principle is a principles from the Generally Accepted Accounting Principles (GAAP) – where the amount and kinds of information disclosed should be decided based on trade-off analysis as a larger amount of information costs more to prepare and use. Information disclosed should be enough to make a judgment while keeping costs reasonable. Information is presented in the main body of financial statements, in the notes or as supplementary information The full disclosure principle states that any future event that may or will occur, and that will have a material economic impact on the financial position of the business,
The meaning and implications of using FIFO, LIFO, and weighted average cost-flow assumptions. 6. How to calculate depreciation using the straight-line method. 7. The journal entry for the issuance of bonds (at par, discount, or premium) and for the issuance of stock (at par or above par).
Utilization of Budgets and Pro-Forma Statements, Ensuring Adequacy of Funds As stated in Rollins a pro forma financial statement is defined as "a financial statement prepared on the basis of some assumed events and transactions that have not yet occurred” (2012). In essence businesses will complete a financial statement utilizing forecasts and historical data to determine how their financial position would look at the end of a fixed period of time. Pro-forma statements can be useful for a number of different aspects of financial planning, but primarily for balance sheets and income statements. When preparing a pro-forma statement, the basis or beginning balances are derived current financials, while projections may be derived from; historical performance or expenditures, market analysis, known capital investments, or other inbound/outbound revenue or costs that can be reasonably provided. While historical statements or actual statements are hard data sets based upon actual numbers, pro forma statements, while the same in appearance allow management the opportunity to make
The computation of ratios facilitates the comparison of firms which differ in size. Ratios can be used to compare a firm's financial performance with industry averages. In addition, ratios can be used in a form of trend analysis to identify areas where performance has improved or deteriorated over time. Because Ratio Analysis is based upon Accounting information, its effectiveness is limited by the distortions which arise in financial statements due to such things as Historical Cost Accounting and inflation. Therefore, Ratio Analysis should only be used as a first step in financial analysis, to obtain a quick indication of a firm's performance and to identify areas which need to be investigated further Profitability.
| | | A. | Indicates planned income | B. | Indicates planned cash inflows and outflows | C. | Indicates the planned quantity of production and expected costs | 7. | Budgets for Planning: Which is Production Budget? | | | A.
This summary will be assessing the requirements of Statement of Financial Accounting Standards (SFAS) 116 and 117 and how it impacts the financial statements. The Statement No. 116 addresses Accounting for Contributions Received and Contributions Made, contributions consist of gifts of cash, marketable securities, property and equipment, utilities, supplies, intangible assets (such as patents and copyrights), and the services of professionals and skilled workers (University of Phoenix, 2007, p.490). These contributions have to be accounted for at fair value, unless their is a particular collection or contributed service. Statement No.
? How does systematic risk differ from unsystematic risk? What is meant by the Capital Asset Pricing Model? Describe how it relates to expected return and risk. Find the real return on the following investments: Stock Nominal Return Inflation A 10% 3% B 15% 8% C -5% 2% ?
T 6. Deferred tax asset. F 7. Need for valuation allowance account. T 8.
___I___Selecting economic activities relevant to the company. ___R___Summarizing economic events. Accounting is “an information system that identifies, records, and communicates the economic events of an organization to interested users.” Exercise E1-5 Instructions For each of the three situations, say if the accounting method used is correct or incorrect. If correct, identify which principle or assumption supports the method used. If incorrect, identify which principle or assumption has been violated.