Peter Swap I. Issue: Will recognizing compensation expense as part of Mizri Corporation’s stock compensation plan faithfully represent the exchange? II. GAAP List: * 718-10-30-22: An equity instrument for which it is not possible to reasonably estimate fair value at the grant date shall be accounted for based on intrinsic value * 718-20-35-3: A modification of an equity award shall be treated as an exchange of the original award for a new award incurring additional compensation cost for any incremental value III. Alternatives: A.
Fiscal Policy vs. Monetary Policy Rolinda Thomas Professor Hiltsje van Dijk Ecconomics 221 25 November 2009 Outline I. Introduction II. Business Cycle A. Description of the business cycle B. Phases of the business cycle III.
For each type, give an example of a business transaction that would be relevant Three types of management decisions are what type of long term investments to take on (Capital Budgeting), where to get the financial backing for the investments (Capital Structure), and how to manage the everyday financial activities (Working Capital Management). Some examples of capital budgeting would include purchasing a new building, purchasing expensive equipment, or developing a new product line. Establishing the capital structure for the corporation could include bringing in other owners or borrowing money from lenders. Deciding how much to outsource and borrow are crucial when considering the return on the investment. Working capital is a firms short term assets that manages daily cash flow.
Dell’s Working Capital 1. How would you characterize Dell’s finance performance in recent year? 2. Describe Dell’s inventory management policy? What advantages and disadvantages do you see in this policy?
a. Adjusted trial balance b. Comparative balance sheets c. Current income statement d. Additional information 4. The primary purpose of the statement of cash flows is to a. provide information about the investing and financing activities during a period. b. prove that revenues exceed expenses if there is a net income.
Examples of Questions on Ratio Analysis A: Multiple Choice Questions 1. Which of the following is considered a profitability measure? a. Days sales in inventory b. Fixed asset turnover c. Price-earnings ratio d. Cash coverage ratio e. Return on Assets 2.
A1 of 3 Formulas involved on the WACC calculations Corporate Finance - MBA 2009 Note written by Prof. Carles Vergara-Alert & Prof. Pedro Saffi 1 Objective This note tries to clarify the different assumptions and formulas used to calculate the Weighted Average Cost Of Capital (WACC) that you will find in different textbooks and articles. 2 The WACC formula The WACC formula is a weigthed average of the cost of equity and the after-tax cost of debt: W ACC = E D+E RE + D D+E (1 − τ )RD (1) being RE the cost of equity, RD the cost of debt, τ the corporate tax, E the market value of the firm’s equity, and D the market value of the firm’s debt. Note that sometimes we call V to the sum of D and E, therefore, V = D + E. Sometimes, not all the financing is provided by debt and equity. As an example, let us assume that some financing is provided by preferred stock as well as equity and debt. The WACC formula has to be modified to include the main sources of long-term financing of the firm such as preferred stock: W ACC = E D P RE + (1 − τ )RD + RP D+E+P D+E+P D+E+P where RP is the cost of preferred stock and P is the market value of the firm’s preferred stock.
Hammersmith Tools Limited The underlying accounting policies have been applied in the preparation of the financial statements of Hammersmith Tools Ltd. Statement of Accounting Policies For the Year ending 31 December 2011 1. Purpose The purpose of the following statement of Accounting policies is to act as a guide to non-accounting employees on basic accounting procedures that are employed in the company while determining the overall profits of the company. 2. Basis of Preparation The financial statements are prepared in accordance with the applicable law and under the convention of Historical cost.
AO1 – Explain and interpret features of a business organisations profit and loss statement In this report I will be analysing and writing about Whitbread PLC’s 2001 to 2002 and 2002 to 2003 profit and loss statements. In this report I will also be explaining and analysing the features of a profit and loss statement such as: * Turnover * Expenditures * Cost of sales * Gross profit * Opening and closing stock * Materials * Depreciation * Group operating profit * Net/Profit loss on disposal of fixed assets * Profit and loss before interest * Profit and loss before tax * Profit and loss after tax * Profit and loss for ordinary shareholders * Retained profit What is a profit and loss statement? A profit and loss statement is a financial statement which summarises what comes and goes in and out of the business account over a specific period. Monthly or annually is the most common period of time in which a profit and loss statement can be done. What’s the purpose of a profit and loss statement?
Question 12 Question 13 Define capital employed. Write down the acid test calculation. Question 14 What is measured by the profit margin? Question 15 What is meant by ROCE? Question 16 State a source of both short-term and long-term funds.