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
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 next question was if they decreased price by 105 and increased sale tickets to 14,000, if there income would increase. After solving this, in exhibit 5, I found that this would not of helped in 2006. They would be in more debt if they had done this, they would have lost $379,197. With the price reduced the break-even points for units and for dollars would have increased due to the contribution margin per unit changing. Next they wanted to see what would happen if they took away sales commission
An integral part in performing a horizontal analysis is the ability to see the variation from one period to the next which are called trends (Horizontal analysis, n.d.). . Within the income statement, net sales increased by 33.3%, $150k, from Year 6 to Year 7. Then, a drastic decrease of 15% which is roughly $900k, took place from Year 7 to Year 8. 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.
In measuring the company’s cash and cash equivalent, it was clearly seen that their entire assets decreased by 24% in 2003 and almost 20% in 2004. The total debt structure of Lucent Technologies significantly decreased between 2003 and 2004. Lucent Technologies current liability decreased from 25.6% in 2003 to 24.3% in 2004, but their debt could be thought to be more as long term because these debts rose from 23% of total liabilities to 26.4% a year later. When considering the equity section of Lucent Technologies, it was shown that they had a negative representation of their shareholder equity and total liabilities in 2003 when compared to the numbers in 2004; this makes their company look more like a deficit; although it is likely that improvements will happen and the company’s current situation can improve and become less of an issue as the years progress. After evaluating Lucent Technologies balance sheet, it’s more than likely that the creditors and investors would more than likely be concerned that even though the cash and cash equivalents are decreasing, the assets are accelerating steadily.
These are the first losses reported by their commercial insurance business in the last three years. Next, not only is the frequency of policy renewal requests being processed late steadily increasing but they have also experienced an uptick in lost renewals as a result. The culprit is Fruitvale’s turnaround time (TAT). The calculated TAT for the week ending 9/6/1991 is 8.2 days which, when compared to the 1-day TAT promised by their largest competitor, Golden Gate, is exceptionally high. Their backlog of policy requests (WIPs) for said week is 82 and the number of new policies and endorsements do not seem to be generating as much revenue as in the past.
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.
B120 TMA03 Part I Question 1 a) The income statement's purpose is to show the financial position of a business by assessing its incomings and outgoings over a given period of time. The problem that arises from this statement in relation to Designer Labels is that this business has to purchase its merchandise well in advance of each season. This means that there will always be a significant amount held in assets. b) I note that although sales were down in 2012, the figure in comparison isn't such a large drop and the gross profit remains at a similar level to the previous year. I am concerned by the large leap in total expenses for the year 2012 and I see that although the majority of these totals have dropped, the ones that have increased have been by large amounts in the areas of wages and salary, maintenance and depreciation.
Most of these economic factors change depending on the country as the each country’s economic activities throughout the country such as the Increase or decrease in inflation (the rate at which prices are going up), recession - a significant decline in activity across the economy, lasting longer than a few months, GDP (Gross domestic product), interest rates - high interest rates are good for people saving but bad for people taking out and paying back loans such as mortgages as it costs more but it has not changed for 3 years and taxes such as corporate, income etc. All these individual factors influence any decision a business makes (Tesco). For example a
Analysis of Financial Position of Berry’s Bug Abstract The purpose it to analyze financial position of the company for the year ended 2008 as compared to year ended 2007. The techniques of horizontal, vertical and ratio analysis have been used for this purpose. Ratios Analysis The liquidity ratios shows that the company ability to pay off its current liabilities in the year 2008 is better than 2007. As current ratio increased by 2.42 and acid test ratio increased by 2.31 times in 2008 as compared to 2007. However, the account receivable turnover and inventory turnover ratios went down in 2008 as compared to 2007.