Deloitte – Trueblood Case Study Case 10-9 Institutional Investor Company (IIC) (Investment Existence & Valuation) I. Statement on Facts: Case 10-9 * Institutional Investor Company (IIC) is a for-profit conglomerate consisting of multiple business lines operating in a variety of industries throughout the United States and is currently being audited under the audit standards established by the AICPA. * Highly profitable * Manages an investment portfolio of approximately $500 million (15% of IIC’s consolidated total assets) that is used to fund operations as needed. * Management, unsatisfied with the historical returns on IIC’s investment portfolio is looking to diversify by investing in alternative investments, which seem to promise higher returns (i.e. Hedge funds, real estate funds, private equity funds, etc.).
Assignment1 Name: Assignment 1: Economic Basics (24.0 points) 1. Describe two examples of important things that financial planning skills can help you do, and explain why these things are important to you personally. (4-6 sentences. 2.0 points) Two examples of important things that financial planning skills can help me do is one, save lots of money, and two, set up a great retirement fund. You can save lots of money by becoming a wise spender, meaning you only buy necessities and buy those necessities at low, and or, reasonable prices.
Real World Case 12-6 Corporations frequently invest in securities issued by other corporations. Some investments are acquired to secure a favorable business relationship with another company. On the other hand, others are intended only to earn an investment return from the dividends or interest the securities pay or from increases in the market prices of the securities—the same motivations that might cause you to invest in stocks, bonds, or other securities. This diversity in investment objectives means no single accounting method is adequate to report every investment. Merck & Co., Inc., invests in securities of other companies.
5. The confidentiality agreement did limit the scope of the audit performed on ZZZZ Best. It is the job of the auditor to obtain sufficient and appropriate evidence. When Ernst & Whinney were not allowed to follow-up with anyone involved in the restoration process that limited their ability to gather evidence. The company should have been able to follow up with all venders and customers to attest to the validity of the financial statements and they were not able to do this and not able to gather the “appropriate and sufficient evidence” needed.
As a C-corporation the business, not the owner, would be held liable for any financial damages. Any accidents involving employees or customers would be the responsibility of the corporation to settle. Financially speaking incorporating is the best option because as a sole proprietorship the owner is currently paying a much higher tax rate versus the corporate tax rate. With the tax code being different for corporations there is better profit retention and security. The client also mentioned the issue of partnership and the selling of stock in order to expand the company.
Unit 2 Individual Project ENGL106 Outline Venture Capitalists are the people that have Venture Capital available for use that businesses can use for startup or expansion. It involves high risk and potential for a high return on the money invested. These investors pool their money and use it and their expertise to help startup businesses that have no prior history and can’t get traditional help from other lending sources. Venture Capitalists are wealthy individuals or a group of individuals that finance and help start up new businesses that can’t raise money by selling stock or getting traditional loans and accept the risk involved in this type of financing. Venture Capital is the money provided to new starting businesses that have a great chance of getting a return to the investor for their money.
Political leaders and government managers are experimenting with management innovations in the private sector that might improve the efficiency of government operations and reduce the need for higher taxes.” A balanced scorecard is an incorporated conventional performance targets, both financial and nonfinancial, that are stemmed from an organization’s tactics about how to attain its objectives. Appropriations budgets are an organization’s requirements for approval to acquire accountabilities for goods, amenities, and expediencies for specific intentions. The groundwork of appropriations budgets for any one year is attentively attached to the administration’s budget of revenues in view of the fact that the revenues budget is the strategy for funding the intended appropriations. Throughout the current recessionary period, governments at all levels have deal with revenue shortages in addition to subsequently having to form complex assessments concerning spending
One of the functions of treasury department is equity management. Purpose of equity management is to attract outsider become a members of company such as issue securities to public and satisfies all existing member’s requirements. Besides that, maintain cooperative profitability and while allowing for growth, all while follow to the cooperative principles are the hardest task of equity management. Source of company’s equity is come from much different ways; the most significant source is direct investment. Company issue securities and shares to public in order to obtain fund from outsides is the type of direct investment.
VENTURE CAPITAL AND PRIVATE EQUITY Yale University Investments Office Yale University Investments Office Formally established in 1818, the Yale endowment is supported by donors who provide longterm funding with the ultimate goal of supporting Yale University’s mission of teaching and research. The purpose is thus to, through continuous growth stemming from new donations and successful management of these donations, support scholars, academic research and the operating needs of the Yale Corporation, while preserving the endowment’s purchasing power for future generations, by providing cash flows to the University’s operating budget. In terms of goals and objectives, the Yale University Investments Office is in place to manage the endowment in a professional manner with the objective of maximizing the return on the investment of the funds in various asset classes while adhering to any asset allocation guidelines specified by endowment donors. From a financial perspective, the goal is to preserve an inflation-adjusted principal amount, which grows as donations are continuously received, while generating enough returns on the investments made by the Investments Office such that: (i) the Yale Corporation’s operating budget can be supported; and (ii) the principal can be grown organically if possible. Totaling $994 million in 2012, the spending of the endowment funds supported almost 35% of the operating budget of the Yale Corporation in that year.
Financing decisions determine how the firm raises money to pay for the assets in which it invests (p. 19). Sarah Lehn, chief financial officer of Merit Enterprise Corp., had identified two option for the board to consider. There are several advantages and disadvantages to both. Option 1 is to approach JPMorgan Chase and ask for a $4 billion loan. Since JP Morgan Chase and Merit Enterprise Corp have a well established relationship, that will most likely make an application process easier and Merit might be able to negotiate a low interest rate.