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.
It shows how many times the current assets can cover the current liabilities. 2009 Current Ratio | 2010 Current Ratio | 1279/854= 1.497 | 1309/1338= .98 | In 2009 Dr. Pepper was looking alright having about $1.50 in assets to ever $1.00 in liabilities. In 2010 there was a dramatic decrease with the ratio dropping to $.98 in assets to every $ 1.00 in liabilities. This is a problem for Dr. Pepper. 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.
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
If a company uses some of its bank deposits to buy short-term, highly liquid marketable securities, this will cause a decline in its current assets as shown on the balance sheet. c. If a company issues new long-term bonds during the current year, this will
In addition, an annual report may contain information about the company's products, facilities, strategies or other topics at management's discretion. This case is an analysis through the fundamental financial statements of two companies. You will want to calculate a number of financial ratios, to analyze the basic financial statements and to highlight significant points underlying trends. In order to understand many of these points you will have to study management's discussion of financial condition and results of operations as well as the notes to the financial statements. Included in this case is the analysis of three companies in the retail business.
The older pager devices getting obsolete Price Break Down: Tallant: ($16.95+$1.95+$11.9) x20 pagers x12 months + ($60.00x20pagers) =$8,592.00 per year Saxton: $13.95x20pagers x12months = $3348.00 per year Case Analysis: Price wise Cottrill will save $5244.00 per year if they chose Saxton over Tallant. Cotrill will also have a direct person of contact at Saxton which seems to be a very attractive option. However, the direct contact Natalie Hopkins is a sales representative who might not be much aware of the technical issues which the pager might have and in real time situations Natalie might also need to call or email an expert which might take the same amount of time as the customer service in Tallant. The main concern in this case is the functionality issue with the Saxton pager which was seen on the trail which seemed to have been fixed after
Total current liabilities have decreased within the year. This shows that the company is paying off some of their debt and gaining more assets. Although it every business requires debt to get started and continue, a company never wants to be overwhelmed with debt that they cannot pay, because this will lead to bankruptcy. Their long term debt has increased over the year, but the total debt has decreased. The shareowner’s deficit has decreased over the year substantially.
Second, This was an all-cash buyout of $52 Billion. This would mean that the loan that was taken out by InBev needs to be repaid before a certain date. Most good businesses treat loan re-payment as one of the most important priorities. This is why Anheuser-Busch InBev paid the loan back before the expected date of repayment. Anheuser-Busch InBev would be making an annual revenue of $36 Billion, which still would leave the company with a little over 2 years for the break even point.
This assumption has most likely reduced our estimated valuation by neglecting some years with potential growth rates of more than 5%. However, in the long run we felt that the amount would have an immaterial affect on our findings. Arguably the most important assumption in this calculation is the sales growth rate associated with the terminal value. Since this number is the present value of perpetuity it represents the largest piece of our free cash flow. As mentioned earlier, we feel that Home Depot’s expansion will be at an end or close to it by 2011, and any continued growth beyond that date will most likely be fueled by existing store sales.
FIN301 - Homework Answers - CHAPTER 6 – Valuing Bonds Questions LG1 1. What does a call provision allow the issuer to do, and why would they do it? A call provision on a bond issue allows the issuer to pay off the bond debt early at a cost of the principal plus any call premium. Most of the time a bond issuer is called, it is because interest rates have substantially declined in the economy. The issuer calls the existing bonds and issues new bonds at the lower interest rate.