All profitability ratios are showing decline in the year 2008 as compared to 2007. The assets turnover went down by 1.92 times, the profit margin went down by 4.58%, the return on assets turnover went down by 46.57% and return on shareholders’ equity went down by 67.09%, they all went down due to decline in revenues in 2008 as compared to 2007. The solvency ratio has shown improvement in the year 2008 as it down to 15.88% from 24.47% in 2007, which shows a decline of 8.59%. It shows that company has less relied on debt financing against its total assets in 2008 as compared to 2007. Horizontal Analysis The net income in the year 2008 went down by around 35.87%; it was due to decline in revenues by 16.53%.
Economic Critique ECO/372: Fundamentals of Macroeconomics May 29, 2013 Economic Critique The current state of the following economic factors: unemployment, expectations, consumer income, and interest rates are described and critiqued. Each economic factor identifies the existing effect of itself on aggregate demand and supply, identifies fiscal policies that government leadership currently recommends, and evaluates the effectiveness of those fiscal policy recommendations from the Keynesian and Classical model perspectives. Unemployment Unemployment in the United States has been declining since 2011. In 2011, unemployment had risen to 9.1% and is currently resting at “7.5%” (BLS, 2013, para. 1).
The company has an increase in inventory and other total assets proving that products aren’t moving through the operating cycle as they should explaining the cash flow decrease and liabilities are increasing. The debt structure of Lucent Technologies was a slight decrease of $940 from 2003 to 2004. Accounts payable has a decrease from 6.7% to 5.1%. Payroll and benefit related liabilities increased from 6.8% to 7.3%. Total current liabilities significantly decreased from 31% to 26.3%.
The 33% increase showed the strength of the company, but the huge drop in sales demonstrated how Competition Bikes, Inc. (CB) struggled to attain a surge in its revenue which is the result of the 15% decline in sales caused by economic situations. The rise of cost of goods sold (COGS) by almost 32% contributed to the rise in net sales for Years 6 and 7. During Year 7 and 8, CB had an almost 15% drop in COGS which resulted in a bad year for the company. However, COGS remained less than the company’s net sales which is always a financial plus. Overall, a rise in revenue and reduction in cost adds to CB’s profitability in Years 6 and 7.
For example, now we deal with a crisis period and large companies like Sainsbury suffer a lot. The economic growth also has some employment effects. We can see a rise in the number of people employed by Sainsbury and this affects the United Kingdom economy. Now in 2011 we deal with a crisis period and appear some changes in population income. The number of companies that went in a bankrupt or are nearly to bankrupt has been increased and this results a large number of unemployed people, which means a decrease in sales.
Slump is when business activities begin to slow down, and the economy slowly goes into recession. Following slump is recession and this is when there is a decline in the economy and usually occurs when there is a fall in the GDP in two successive quarters. Recovery is when the economy begins to return to a normal state and business activities begin to increase once the economy has gone through recession. Finally, boom is when the economy is processing continuously with business activities and the demand is high, the unemployment rates are lower and further expansion due to higher GDP. British Airways faced recession in 2009/2010 where business faced a decline.
Price controls below market rates, like the record low prices in the interest rates for mortgages, hold down monetary reduction will result in inflation. Thus, making it much more difficult to restore a healthy and sustain economic growth. According to the National Bureau of Economic Research a recession is defined as “ a significant decline in economic activity spread across the economy, lasting more than a few months, normally visible in real gross domestic product (GDP), real income, employment, industrial production and wholesale-retail sales” (What causes a recession? , 2011). Prices rice when government prints too much money.
Government spending cuts reduce output significantly, and Extract B, line 2 states that the ONS have found that there has been ‘a sharp fall in employment in the public sector which has helped to push total unemployment above 2.5 million last month’. This therefore proves that there will be a significant reduction in public sector employment however there will be a greater demand for the private sector output and as a result an increase in employment in the private sector. In contrary, reducing government spending also helps to reduce the national debt in the economy so that a budget surplus can be achieved. (AD/AS diagram shifting left or unemployment) Extract C, line 2 states that ‘the 2.5% rise in VAT…will drive up unemployment’ and this is a fiscal policy measure that will affect unemployment in the economy because with an increase in VAT consumers will be less resistant in buying goods because they have to spend more and so they instead decide to save which is known as a withdrawal from the circular flow of income. Furthermore, an increase in taxation such as income tax and VAT will also reduce aggregate demand from AD1 to AD2 and real GDP because
Although the British economy can be seen to have grown throughout the period to some extent in relative terms it was actually in decline. Even within the first 13 years of the period Britain's share in world trade fell 15% and the economies or Japan and Germany in particular began to outstrip the nation massively. Arguably Britain did have a chance to change this with the creation of the EEC in the 1950s but failure to embrace this initially meant that the European nations steamed ahead in their economic growth and Britain would never quite catch up. The weak nature of the economy can too be seen in the 1970s when it really was at its lowest seen in the humiliation of the 1976 IMF loan and the later Winter of Discontent. The latter decade could arguably show the greatest economic situation in that Blair experienced continuos growth but still looking at Britain today it never develop dot compete with the ever growing markets
The Home Depot Company wants to expand their business in a global arrange. Actually, this situation is not able to happening every year; therefore, I considered it as a extraordinary item. 2. As we know from the fiscal 2007, the value of treasury stock was negative $16,383 million, but when it comes in the fiscal the value of treasury stock was negative $314 million, which means The Home Depot Company may sell their treasury stock for some money, the factor is that the sales of Home Depot Company decreased $13,488 million, therefore, they need money to run the company, so they sell some of the treasury stock for some money. This is the second extraordinary item.