Their cash flow is the net income plus depreciation. C. Now, suppose the company changes its depreciation calculation procedure (still within GAAP) such that its depreciation expense doubled. How would this change affect Brandywine’s net income, total profit margin, and cash flow? The depreciation will be $3,000,000. Their total revenue will be subtracted from their total expense which will be their net income.
Accounting Angel Martinez Acc 11/28/2011 Accounting Accounting requires collecting information and displaying it on statements so that business decisions can be made for the future of a company. The purpose of accounting is to document what the company is spending and what revenue is being collected. Accounting provides a business with correct and documented information on what is profitable and what is negative. Without accounting, businesses can not prosper or make decisions on growth or downsizing. Accounting requires that all transactions be recorded to ensure accuracy when giving financial details to board members, stock holders, and the IRS for tax purposes The income statement posts revenues and expenses.
If the calculated NPV is less than zero then the project should not be accepted and is not worth the risk involved in the project. The NPV takes into account risk and reward, which is why it is used in the world of business finance and capital budgeting. The first part of the case assignment supposes that the T-Mobile Corporation is considering a new project that will cost $3,219,000 (initial cash outflow). The company has also given a cost of capital, or discount rate, of 4%. The company has provided the
2. NET PROFIT RATIO NET PROFIT/SALES X 100 = % (NB use net profit figure before tax has been taken out) 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. 3.
3) A company changes from straight-line to an accelerated method of calculating depreciation, which will be similar to the method used for tax purposes. The entry to record this change should include a A. credit to Accumulated Depreciation 4) Presenting consolidated financial statements this year when statements of individual companies were presented last year is an accounting change that should be reported by restating the financial statements of all prior periods presented. 13) If a short-term obligation is excluded from current liabilities because of refinancing, the footnote to the financial statements describing this event should include all of the following information EXCEPT: the number of financing institutions that refused to refinance the debt, if any 14) Stock dividends distributable should be classified on the balance sheet as an item of stockholders' equity. 15) Which of the following items is a current liability? A long-term debt maturing currently, which is to be paid with cash in a sinking fund b.
a. The dollar amount on an accounts receivable invoice. – This would be quantitative because we are given the actual quantity in dollar amounts. b. The net profit for a company in 2009 – This would be quantitative as well since we are seeing the actual profit number for the company.
Cash basis also records accounts payable the date that it was paid rather than the billed date. Those are the two main differences on how it reports monetary data, other differences are the type of businesses that would utilize the two different accounting basis. Smaller business would most likely use cash basis simply because it is easier to manage. One major benefit to cash basis is that it identifies more clearly cash on hand, but a major down side is that it paints a bad picture of the company’s services that it performs. 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.
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.
BSA 310 Entire Course http://www.homeworkwarehouse.com/downloads/bsa-310-entire-course/ BSA 310 Entire Course BSA 310 Week 1 DQ 1 And 2 A “business system”, as defined by Georgetown University, is “a combination of people and automated applications organized to meet a particular set of business objectives. Describe a business system you use in your work environment. What is the business objective of the business system? A companies “Business Model” serves to (1) articulate the value proposition, (2) identify a market segment, (3) define the structure of the firm’s “value chain”, (4) specify the revenue generation mechanisms, (5) describe the position of the firm within the value network, and (6) to formulate the competitive strategy.
In fact, like other professions, personal values come into play in the accounting decisions and judgments made by the decision makers, so full disclosure might mean different things to different people. Legal checklists have mandatory items, but the financial picture might still be vague or lack numbers to give an accurate financial representation of the company at any given time, as shown in the financial statements. For example, if it was totally “objective,” Enron’s accountant would not have been able to “cook” the books to make the company appear to be in a better financial position than it actually was. The accountant and other Enron professionals would not have ended up in court for fraud and the likes. Even though the accounting profession has guiding principles (GAAP), they are not absolute, but subject to human judgment and interpretation and, at times, the lack of compliance leads to fraud (e.g., Enron, WorldCom, and others).