Chapter 9 Required 1. Review the earnings per share forecasts. Comment on how these forecasts could influence the market value of the common stock. 2. What is the price/earnings ratio for your company? 3.
This network thrives on helping large and small companies to reach independent strength by showing in many ways how to survive form business to cultural and ethical diversity. This network of firms also has established a vigorous global network and their core value, and the one shared with their clients, is of excellence, teamwork, and leadership. Some of the key milestone in the history of both firms is that the company’s history goes back to the 19th century when Samuel Lowell, in 1849, established a business in London and William Cooper established his business in 1854; seven years later they became the Cooper Brothers. Price Waterhouse World Firm was formed in 1982 and the merger of Coopers and Lybrand with Deloitte Haskins & Sells happened in 1990 with a number of countries around the world. In 1998, the forming of the United States portion of PwC took place emerging from the merger of Price Waterhouse and Coopers and Lybrand, whereas, both firms originated in London.
| Huffman Trucking | Memo To: Graham Grove, Vice President of Industrial Relations From: Paul Johnson Director of Accounting CC: Simone Ojeda Accounting Specialist Date: [ 4/9/2012 ] Re: Results from ratio calculations and horizontal and vertical analysis What do the liquidity, profitability, and solvency ratios reveal about the company’s financial position? Liquidity ratios are the ratios that measure the ability of Huffman Trucking to meet its short term debt obligations. These ratios measure the ability of this company to pay off its short-term liabilities when they fall due. Profitability ratios measures Huffman Trucking’s ability to generate earnings relative to sales, assets and equity. These ratios assess the ability of the company to generate earnings, profits and cash flows relative to some metric, often the amount of money invested.
Investment Ratios These are concerned with assessing the returns and performance of shares in the business. Firstly I will calculate the profitability ratios: Profitability = the relationship between profit and the resources employed in earning it. PROFITABILITY RATIOS • Gross Profit Ratio • Net Profit ratio • Return on capital employed • Return on shareholders funds |GROSS PROFIT RATIO | |2008(£m) | |2007(£m) | | | | | | | | | Gross profit x 100 |= |402.5 x 100 | |376.1 x 100
Find the real return on the following investments: Stock Nominal Return Inflation A 10% 3% B 15% 8% C -5% 2% ? Find the real return, nominal after-tax return, and real after-tax return on the following: Stock Nominal Return Inflation Tax Rate X 13.5% 5.0% 15% Y 8.7% 4.7% 25% Z 5.2% 2.5% 28% How are industry-operating differences reflected in a firm’s financial statements? week 6 Assignment
Those financial statements are income statement, retained earnings statement, balance sheet, and cash flow statement (Weygandt, 2008). The income statements show operations results of the revenues, expenses, net profit, or net loss for the accounting period. The information obtained from the retained earnings statement listing the revenue followed by the expenses is used to prepare it. The income statement reflects the organization’s success through its profits. The retained earnings statement reconciles the beginning and ending balances of the retained earnings.
Debt to total assets, also known as simply debt ratio, is calculated by taking the total liabilities for the company divided by the total assets for the company; this information is found on the company’s balance sheet. This ratio determines the portion of debts a company has that are paid and financed through its debt. For Huffman Trucking the calculation would look like this for 2011: ($90,283+$71,365)/$267,265 = $161,648/$267,265 = 0.6048 or 60.48% (Huffman Trucking, 2013). Time interest earned, also known as interest coverage ratio, is calculated by taking the earnings before interest and tax and dividing it by interest expense; this information is found on the company’s income statement. This ratio determines the rate and ability in which the company is able to pay its debts off.
Kevin Leonel Sonilal XACC/290: Principles of Accounting I Professor Steven German December 6th, 2013 Financial Statements The four basic financial statements are the balance sheet, the income statement, the retained earnings statement, and the statement of cash flows. The incomes statement demonstrates how well the business has performed for a certain period of time. The items reported in the income statement are its revenues and expenses. From an internal user’s standpoint, the financial statement is a management tool. It can be used to evaluate the business’ strengths and weakness, and helps in deciding what route the business should take to make improvements or further its success.
Financial Statements ACC/290 August 13, 2012 Paul Dommes Financial Statements A business’ success or failure is based on numbers - the bottom line. Financial statements communicate these numbers to users, both internal and external, in a group of documents called financial statements. The financial statements are the income statement, the retained earnings statement, the balance sheet, and the statement of cash flows. The results of one statement become an input in another interrelating them. The first statement is the income statement.
e) What is the company’s operating income for the current year? f) What is the company’s EBITDA for the current year? g) What is the company’s net income/earnings (final profit or loss) for the current year? h) What are the company’s earnings per share (basic and diluted) for the current year? (notes) i) What is the actual name used by the company to identify this particular document?