a) What are the consequences of telling the president of your gross miscalculation? In order to determine the sales and income projection, it is useful to forecast the budget based on prior performance of the company. The business performance of the current year will shows how the company is actually performed and this is a good indication to expect the company will perform better in future. As to obtain an accurate sales projection, we collected all the information from the company because each area of business operation might have a separate budget. For example, Fernetti Conductor has a specific budget for advertising, purchasing, sales production and cash budget.
According to ASC 605-50-45-1 Revenue Recognition, a vendor may give a customer a sales incentive or other consideration. This Subtopic addresses the circumstances under which that consideration is either: (a) An adjustment of the selling prices of the vendor’s products or services will therefore be characterized as a reduction of revenue when recognized in the vendor’s income statement; (b) A cost incurred by the vendor for assets or services received from the customer and therefore characterized as a cost or expense when recognized in the vendor’s income statement. So, how the referral credit will be documented on the income statement that depends upon whether the consideration is in the form of cash or in the form of a free product or service According ASC 605-50-45-2 and 605-50-45-3, Cash consideration includes not only actual cash payments to the customer, but also incentives that reduce the customer’s present or future payment obligation. For example, credits against future purchases are a cash consideration. Examples of free products or services include gift certificates or free airline tickets that will be honored by another, unrelated entity.
Based on the test I would re-evaluate my choices. Tools used were: 1. The sales report told me which channels and discounts brought what percentage of profit. This would be used to increase or decrease the amount I invested. 2.
The computation of ratios facilitates the comparison of firms which differ in size. Ratios can be used to compare a firm's financial performance with industry averages. In addition, ratios can be used in a form of trend analysis to identify areas where performance has improved or deteriorated over time. Because Ratio Analysis is based upon Accounting information, its effectiveness is limited by the distortions which arise in financial statements due to such things as Historical Cost Accounting and inflation. Therefore, Ratio Analysis should only be used as a first step in financial analysis, to obtain a quick indication of a firm's performance and to identify areas which need to be investigated further Profitability.
How do you explain the use of time value of money (TVM) in business? What considerations are made when calculating TVM? How may you use TVM to create your own, or someone else’s, retirement plan? Answer The time value of money (TVM) is used in businesses for the purpose of finding out the suitability of an investment and understanding returns in the context of opportunity costs. It helps us to understand the relationship between the usage of money and the value of returns it provides from a particular venture or avenue based on the time it would take for providing the return and the future value of the return.
In order to insure this happens, the compensation plan offered to employees must be an incentive to work for that organization. The incentives that should be offered should take employees’ needs and wants into consideration. Surveys will be provided to understand the profiles of the employees and meet their individual needs. The programs proposed are day care services, flexible spending accounts, vacation packages, holiday pay, severance pay, health and work out centers, and paid time off. Because these services may not be attractive or an option for some employees, they can choose which benefits to take advantage of.
Employees can use this statement to estimate if the company will be able to afford compensation. Externally, investors and creditors can utilize a company’s cash flow statements to assess the liquidity position of a company and estimate the financial strength of the organization (SEC,
Study the demand elasticity for its products and discuss the availability of close substitutes for its products. How does that affect pricing decisions? Analyze the company’s profitability. Identify the economy or industry influences on its costs, operations, and profitability. Describe the competitive environment in which the firm operates, the distribution of market power, and the strategic behavior of the firm and its competitors.
Marcus Rigsby MKG 300 – Final paper Professor: Keith D’Ambra April 27, 2010 1. Marketing Definition Marketing is the sum total of all activities an organization undertakes to bring about the firm’s desired objectives that are focused on anticipating the wants and needs of consumers. This is done in order to utilize a producers resources efficiently and effectively to produce a good or service to satisfy the wants and needs of its customers. 2. SWOT SWOT is an analysis of an organization’s Strength’s, Weaknesses, Opportunities, and Threats.
Make or buy decision a. Be able to identify relevant costs and benefits b. Be able to prepare a financial analysis and make a decision c. Compute the impact of outsourcing on the company’s overall profits 7. Special orders a. Be able to identify relevant costs and benefits; understand the decision rule b.