I calculated an “inventory turnover ratio” which measures the number of times a company sells its inventory during a year. A high rate of turnover indicates easiness in selling inventory; a low rate indicates difficulty. In 2011, the inventory turnover was 6.1. By 2012 the ratio decreased to 5.2. The decrease may be due to a slow ability to turn around merchandise in sales and potentially due to paying a higher cost for goods.
a. Based on this information, the ValueLine 1995 expected dividend, and the annual rate of dividend change for the growth estimate, what is the company’s return on common stock using the constant growth model? What is the expected dividend yield and expected capital gains yield? Explain the difference in the required return estimates from the ValueLine (see question 1a) to the WSJ price data. Return on common stock…D1/Po+g=Expected Return…0.60/27+5.5%= 7.72% Expected dividend yield= D1/P0=2.22% Expected capital gains yield= growth rate, 5.50% Stock Price increased, but expected return decreased.
The first concern is the projected units that will be sold and the amount of revenue in year 9. The company’s sales budget indicates that 3,510 units will be sold in year 9, generating $5.25M in revenue, which is an increase of 3.2% over year 8. While the forecasted units of 3,510 in year 9 seem in line with the 3,400 units sold in year 8, it is in sharp contrast with the trend over the past 2 years. In reviewing the horizontal analysis data, revenue increased by 33.3% between years 6 and 7 then dropped by 15% between years 7 and 8 due to the decline in economic conditions. The weaker economy resulted in sponsorship cutbacks for professional riders.
The author of this article, Jeannine Aversa, is stating that key economic indicators point to the likelihood of a recession. Aversa supports her thoughts by noting the real GDP; “crawled at a 1.3 percent pace in the opening quarter of 2007…even weaker than the sluggish 2.5 percent rate in the closing quarter of last year.” The author suggests the main cause of the economic slowdown is due to “the housing slump.” Consumer expenditures are driving the economy, but Aversa worries about a “fallout from risky mortgages and rising energy prices.” Uncertainty of the Feds actions concerning the interest rates is leading to lower investment spending. The author also states that the Feds decision on raising or lowering the interest is due to the
As seen on the income statement by accounts receivable and annual credit sales Amazon was able to decrease the amount of days it took to collect on accounts receivable. The financial state of Amazon at this point of review, as some concerns with common stock outstanding, this led to the period in which the income statement shows a $-39 million dollar on net income. In 2012 sales did increase only due to more electronic transactions, new innovative Internet transactions and the rise in shipping costs, due to this there was a significant rise in prices of the products that Amazon sells. In 2013 Amazon must increase net income and retained earnings in order to continue to be a successful corporation.
This report is to examine and analyze the Australian Federal Budget for 2011. It will examine the overview of the budget including increase of spending and budget cuts, benefits and the disadvantages of this budget. This year’s budget was quite different to the last couple. This one is about budgets cuts and getting back to surplus as the deficit of 27 billion dollars and it is predicted to be in surplus by 1.7 billion dollars by 2013 although that figure has come under scrutiny if would actually get that figure. Over the last couple of years it has been about spending which would in turn stimulate the economy by more jobs and consumer spending such as the $900 that was given out to most Australians which did very well especially to the struggling
Recently, competitors have moved facilities overseas in an effort to reduce labor costs. Due to seasonality, high demand and production of its apparel lines occur for 6 months out of the year from August through January. Significant swings in production activity have a negative impact on the useful lives of the machinery and are evidenced by high maintenance costs throughout the year. Analysis In order to evaluate the costs and net income associated with seasonal versus level production, pro forma financial statements were created for the income statement, balance sheet, and statement of cash flows Exhibit 2, 3 and 4. Assumptions shown in Exhibit 1(b) for 2012 projections were used to evaluate changes in Accounts Payable purchases, inventory levels, and associated expenses of each option.
xxxx Business Economics GM545 April 2007 Exercise 1: Macro/Micro Integration Information used in the Executive Summary was found in the following sites on April 21, 2007 Site 1: Bureau of Labor Statistics: http://www.bls.gov/eag/eag.us.htm Site 2: Conference Board: http://www.conference-board.org/economics/helpwantedonline.cfm Based on the data present in the listed websites, the overall U.S. economy, and especially the labor market, will continue to grow and continue in the current trend of low unemployment, probably continuing to fall to historically low levels of around 4.0%. Additionally, the most difficult to fill positions will continue to be in the "Management" and "Business and Financial Operations" areas. Our
Describe the Federal Reserve’s assessment of the current economic activity and financial markets. The levels of uncertainty associated the projections for economic growth and inflation is considered greater than the levels that have been consistent over the past 20 years. The contributing factors for this assessment include the severity of the recent recession, the uncertain effects of the current stance of monetary policy, uncertainty about the direction of fiscal policy, and structural dislocations in the labor market (Monetary Policy Report, 2011). The most frequently cited downside risks included a potential for a large negative effect on consumer spending from higher food and energy prices, a weaker labor market, falling house prices,
Individual Investor Perceptions and Behavior During the Financial Crisis Arvid O. I. Hoffmann* Maastricht University and Netspar Thomas Post Maastricht University and Netspar Joost M. E. Pennings Maastricht University, Wageningen University, and University of Illinois at Urbana–Champaign August 8, 2012 Abstract: Combining monthly survey data with matching trading records, we examine how individual investor perceptions change and drive trading and risk -taking behavior during the 2008–2009 financial crisis. We find that investor perceptions fluctuate significantly during the crisis, with risk tolerance and risk perceptions being less volatile than return expectations. During the worst months of the crisis, investors’ return expectations and risk tolerance decrease, while their risk perceptions increase. Towards the end of the crisis, investor perceptions recover. We document substantial swings in trading and risk -taking behavior that are driven by changes in investor perceptions.