Employers can choose from a variety of investments such as company stocks, diversity stock market funds, or federal government bond funds. Companies can take a take deduction for their contributions such as in profit sharing plans. Section 401(k) plans has employer tax benefits where employers deduct their contributions to the plan from a taxable
Liquidity Ratio Calculations: Current Ratio = Current Assets / Current Liabilities $147,800 / $90,283 = $1.637:1 Acid-Test Ratio = (Cash + Short-Term Investments + Net Receivables) / Current Liabilities $89,664 + $0 + $51,869 / $90,283 = $1.567:1 Receivables Turnover = Net Credit Sales / Average Receivables ($1,109,295 - $89,664) / [($51,869 + $81,557) / 2] = 15.283 *Average Collection Period = 365 / 15.283 = 23.883 Days When evaluating Huffman Trucking’s ability to pay off short-term debt and maturing obligations, it’s imperative to analyze the company’s liquidity. Utilizing the current ratio to analyze liquidity, which compares all current assets to current liabilities,
Return on Investment (ROI): It is the ratio of the net cash receipts of the project divided by the cash outlays of the project. b) Economic Feasibility: It identifies the financial benefits and costs associated with a development project. Legal and Contractual Feasibility: It assesses potential legal and contractual ramifications due to the construction of a system. Operational Feasibility: It assesses the degree to which a proposed system solves business problems or takes advantage of business opportunities. Political Feasibility: It evaluates how key stakeholders within the organization view the proposed system.
There is only a 1.28% chance that b = 0, which is better than the 10 percent level required by the marketing director. d. The exact level of significance of is 0.0927. There is a 9.27% chance that rivals’ spending on advertising does not affect Vanguard’s sales (i.e., b = 0), which is just barely better than the 10 percent level required by the marketing director. e. About 78 percent of the variation in sales remains unexplained. Find additional explanatory variables that have a significant affect on S. The manager might try adding the price of its detergent and the
For income property, the process is similar to the sales comparison approach using the gross rent multiplier or the cash flow analysis for capitalization. The gross rent multiplier approach was described in previous paragraphs. The capitalization approach however is divided into two types; direct and yield. For direct capitalization, an appraiser must first calculate the net operating income by estimating the rent revenues less the operating expenses. Then the net operating income is converted to an estimated value for the property.
1. Provide the definitions of throughput, inventory and operational expense given in The Goal. How do they compare with the traditional definitions? Do you find them useful, and why? Throughput is the rate at which the system generates money through sales while inventory is all the money that the system has invested in purchasing things which it intends to sell.
The second ratio measures the effect of interest; it indicates the proportion of earnings before interest and tax that is retained after paying interest. It should be considered together with the leverage component (assets/equity). The third ratio measures the company’s operating profit on sales; it can be broken down into subcomponents such as gross profit margin. Common-sized income statements can help with
That gave them a current ratio of 1.42:1. When assessing a current ratio most people look for a ratio of 2:1 or greater. Although Home Depot did show improvement from 2013 to 2014 in their ratio, they still did not reach the 2:1 ratio in either year. This could be a red flag for analysts, creditors, and investors. (Principles,
Journal of Consumer Research (Pre-1986), Volume 5(1), 41. Retrieved November 14, 2013 from ProQuest database. Tsuen-Ho, H., and Lee, M. (2003). The refinement of measuring consumer involvement - an empirical study. Competitiveness Review.
1. What are the essential differences between endowments, final-salary definedbenefit (DB) pensions plans, and cash-balance (CB) pension plans? A Cash Balance plan is a defined benefit plan that specifies both the contribution to be counted to each participant and the investment earnings to be counted based on those contributions. Each participant has an account that resembles those in a 401(k) or profit sharing plan. They are based on two ways: 1) The company contribution – a percentage of pay or a flat dollar amount – determined by a specified formula 2) An annual interest credit.