You decide week 6 The stock should not be purchase by Mr. Jones. Mr. Jones acquiring the assets, liabilities and also would inherit the contractual obligations of the selling corporation, would, be the results of the purchase. In lay terms, he has bought the existing Smithon Corporation and he is responsible of ensuring daily operations run efficiently but the tax aspect of acquisition he is responsible for existing and any future tax liabilities that the selling corporation had. It would be my advice for Mr. Jones to not buy the stock because of the liability of current and future tax obligations which Mr. Jones would incur from the purchase of the stock. Since the tax identity of Smithon corporation would have not ceased, it is not
Longitudinal Analysis: When doing a longitudinal financial analysis on Costco, Costco’s profit margin has been slightly increasing between 1999 and 2008. It had a profit margin of 12.79% in 1999 to 13.29% in 2008. This gives the company an average profit margin of 13.16% compared to the industry average of 20.40%. This shows that even though Costco has been gradually increasing its profit margin, it is still below the industry average. The company needs to improve their financial performance by controlling cost to increase their profit margin.
Financial Analysis Task 2 Competition Bikes, Inc. (CBI) has identified and produced a ProForma for year 9 of the company. There are a number of areas of concern when reviewing this document that need additional review and evaluation prior to budget becoming finalized. In the Sales Budget, CBI identified that they were going to increase units of sales to 3,510 and this is an increase over year 8 of 87 units. Year 8 experienced a 15% decline over budget due to the economic situation yet sales trends are expected to remain consistent and the company is planning to recover from the decline in the next 3 years. A number of areas could be the reason for the decrease in sales in year 8 including the economy which could have led to outside sponsorships being decreased.
The biggest area which would provide a direct impact is the reduction of merchandise costs. Total return on assets is stable, at best. Costco should be working toward increasing return on assets, which is a direct reflection of the money going into the organization, but not coming out as a return. Stock holder’s equity is a clear demonstration of this performance. In 2000, it was at 15%, and has decreased in 2008 to 11%, which is actually an increase over prior year.
Balance Sheet analysis shows the company has increased cash assets, significantly reduced debt, and added to stockholder value which makes Riordan financially strong and desired by investors. Income Statement analysis reveals that Riordan has successfully reduced certain costs, but profits are down from previous years. Riordan Manufacturing’s Accounting System requires a number of software modules which will integrate well and greatly reduce the labor intensiveness and nearly 3-week delay of month-end general ledger
Looking at the data net sales increased over the five period from $2,097,000.00 to $5,218,007.04 increase $3,121.007. Totaling gross profit went from 816,000.00 to $2,030,469.12 increase of $1,214,469.10. In the above pro forma balance sheet, it has been established that one has assumed that current gross profit has increased in the ratio of gross profits. A reduction in any of the following selling expenses or administration expense will allow the company to retain more of its earnings and profit margin, and therefore will increase its need for external funding. The dividend disbursement rate is 25 percent of earnings, and the balance in retained earnings at the end of 2012 was $1,436,833.09.
CCompany Financial Analysis In doing the company financials a couple of key things become apparent. One of the biggest factors in the financials is the consistency in Costco’s growth over the past four years. The four profit margins (Total Revenues, operating income, net profit margin, and Diluted net income per share) have for the most part been rising for the last four years. Costco may look like it’s not growing but having these constant margins along with the growth in revenues means that the profit (bottom line) for Costco is increasing. Costco is doing great job in making sure that revenues constantly grow as shown below while maintaining a proportional amount of expenses to keep the profits the same or a little high from the previous year.
Professor P. Savor Intermediate Corporate Finance 3504 Section 002 Case Analysis#1 Alliance Concrete Alliance Concrete is a ready-mix concrete producer who has had tremendous success and revenue growth in its previous years of operation. Potential economic slowdown, overdue capital improvements, and debt repayment obligations pose serious threats to the financial health of this firm. Despite Alliance Concrete’s success and growth the economy in which Alliance Concrete operates may undergo an economic slowdown, which will decrease demand for its services and products. Alliance’s industry costs for materials are steadily increasing by 2.3% and are projected in 2006 to increase on average by 9%. In 2004, delays and stoppages to the firm’s production due to the collapse of equipment cost Alliance $2.6 million in repairs and a two-week shutdown.
You Decide Week 6 S Corporations Keller School of Management AC533 Federal Taxes and Management Decisions Professor Daniel Louviere 1. Outright purchase of Smithon stock: a. Should Mr. Jones purchase the stock of Smith outright, leaving Smithon intact? What about issuing debt in his Johnson Services company to pay for the Smith Company – would that raise debt to equity issues? No, Mr. Jones should not purchase the stock.
Gap Analysis: Riordan Global markets create opportunities for businesses, but simultaneously generate difficultchallenges. The different cultures in the international market can produce conflicts becauseappropriate behavior in one country may be inappropriate for another. Riordan Manufacturing(Riordan) is a multinational company operating in the United States and China (University of Phoenix, 2010). The CEO, Michael Riordan, wants to expand the Hangzhou facility after aprofitable year (University of Phoenix, 2010). The company does not have a personnelmanagement plan to address cultural issues to incorporate in an international managementapproach.International management applies management ideas, procedures, and adaptablemultinational practices