Do to the crash in the economy people who purchased homes have had to foreclose and or walked away from the house they were purchasing. Now with the banks having so many houses and builders are stuck with the empty houses they had built the supply of houses is more than the demand for them. This has had an impactful drop in demand and an increase in supply. Because of this change houses are at a low cost for the
Having a ratio below one likely means they had to take out some sort of financing to cover their obligations for the year without some sort of financing. Seeing a current ratio of below one is a scare for many investors because, a ratio of below 1 raises issues with the company’s financial well-being. Debt Management Ratios Debt management ratios show to what extent a company uses borrowed funds to finance its operations. These ratios are important to a company because creditors use them to determine the riskiness of the company’s financial position. Using the debt ratio we can determine how much of Dr. Pepper Snapple Group’s assets are provided through debt.
It paints a bad picture because the business may collect zero revenues for a month and pay accounts payable during that month showing a loss of revenue while the next month they may pay zero accounts payable but receive two month’s worth of accounts payable, this would indicate that the company had higher than realistic earnings. Accrual basis accounting paints a better picture of how a company profits or losses over a indicated time period, but fails to state clearly the cash on hand. E3-2B (b) Why would politicians prefer the cash basis over the accrual basis? The Government prefers to use the cash basis over the accrual basis for many reasons but none more the how to account for public unions workers’ pensions. The Government does not want to report their pensions while the employee is working because politicians believe that benefits
The recent downturn in the economy is wreaking havoc on the American standard of living and forcing more cutbacks into an already frugal lifestyle. The word economy means “one who manages a household”
A recession is the part of the business cycle which is characterised by falling levels of demand, very little investment, low business confidence and rising levels of unemployment. It is neither as long lasting nor as severe as a depression. A recession is two successive declines in quarterly gross domestic product. A recession provides extremely harsh conditions for businesses to survive in, in order to survive a recession businesses have to adopt strategies that they believe are they best way for them to see through the recession and continue to make a profit on the other side. One strategy that a business can implement is to cut costs.
Each year's deficit is added to the national debt. During a time of recession if there is a surplus, this will decline creating a deficit. A deficit will happen during a recession because workers may lose their jobs and corporation will see a decline in their profits, this decline does affect the Government’s ability to pay their debt without borrowing the monies to do so. References http://www.washingtonpost.com/opinions/charles-lane-the-feds-role-in-the-debt-debate/2012/12/03/ed5951cc-3d6a-11e2-a2d9-822f58ac9fd5_story.html http://economics.about.com/od/recessions/a/budget_deficits.htm Week 4 – Learning Team Weekly Reflection Aadil Ansari, Alexandra Lyddane, Joshua Bollman, and Judy Miller ECO/372 July 1, 2013 Jack Karczewski Week four has proved to be as interesting and informing as the first three weeks. This week, our learning objective that
Not only were there large losses of money for both companies, but the loss of reputation as well. Penn Square Bank What were the ethical pressures on the firm concerning documentation, credit extension, and revenue recognition that lead to the final collapse? What should have been done to reduce or offset these pressures? The ethical pressures on the firm concerning documentation, credit extension, and revenue recognition leading to the final collapse of Penn Square bank is the bank could not fund the loans they were negotiating. According to generally accepted accounting principles, revenue and corresponding expenses should be recorded or matched in the same accounting period (The Houston Chronicle, n.d.).
Social security is extremely important for the well being of elders, injured workers, and the handicapped. If this program were able to be privatized in the stock market, the economy would be another variable to add to the many social security has. By investing social security in the stock market, the downfall of the market could lower peoples living conditions considerably, and erase what has have been paid for possibly decades. One argument used is that social security does not do enough for people to live on. About one in five people use social security as the only source of income, and more than half use social security for more then half of the annual income (Anspach).
Cyclical unemployment occurs during a recession, as we have recently encountered. Firms aren’t achieving their potential output, which leads them to cut workers. And even after a recession it’s hard for these unemployed to find jobs again. When they report their incomes, it heavily tips the income equality scale as the unemployed have next to no income. The first step in dissolving income disparity is aiming to normalize unemployment rates, which for America would be around 5-5.