FBN has made significant investments (property, plant and equipment) on account, thereby getting into financial trouble by owing their creditors quite a bit of money. FBN made too many investments (on account) and their cost of services increased faster than their sales. Yet another indicator of financial woes is the Profitability Analysis. By observing the Return on Assets, we can see that in two years, the ROA declined from 7.5% to 0%. Such a decline (and such a low percentage) indicates that management is not efficient in employing the company’s assets to make a profit.
Sadly, this company had a lot of factors working against them when the quarter came to an end. The reason that companies budget is to help ensure that money is being spent properly and to help track where future profits and losses may occur. The unexpected decrease in revenue can be factored into many different areas. One main factor of loss is due to the internet being down for 7 days causing the company to potentially have lost 7.7 percent of it’s customers and an estimated $10,00 in profit for this quarter. Factor number two is the company offering free shipping to orders over $100.
However, the company was not able to sustain the growth in sales between years 7 and 8, which resulted in a decrease in net sales of -15% or $897,000. The company’s loss in net sales in year 8 is a weakness due to overall sales being down. Cost of goods sold (COGS) between years 6 and 7 show an increase of 31.8% or $1,048M. The increase in COGS corresponds closely with the increase in net sales for the same time period, which illustrates the company’s ability to effectively control its inventory levels and material costs. For years 7 and 8, the cost of goods sold decreased by -14.5% or $630,400, which again corresponds to the change in net sales for the same period.
The primary customers of KR+H cabinetry are those who want to optimize the amount of useable space in their homes that stock cabinets cannot provide. The industry in 1992 was comprised of 61% stock cabinetry, and custom cabinets similar to those produced by KR+H comprised of only 20%. This is down from 26% in 1989 resultant from poor economic conditions between 1989 and 1992. KR+H uses a direct sale to consumer approach that only accounted for 2% of total industry sales. Industry sales by use of cabinet dealers and distributors contributed for 31% and 30% respectively.
This number totaled 3,700 LTL shipments last year with an annual freight cost of $2,500,000 and a total weight of 1,800,000 lbs. Meaning that each shipment to CA cost the company roughly $675.68 and weighed 486.49 lbs. Since these shipments to California were normally LTL it would take around 6 business days and sometimes even more. California is also where the firms’ main suppliers reside Baldwin Castings and Digby Gaskets. Crouse Hinds purchased 8 million and 5 million dollars in parts from the suppliers respectively last year.
The accounting practices created a scandal in which the companies were able to hide information from investors. This allowed the stock prices to remain high even when the company was struggling. When the companies collapsed, investors became worried about the overall securities markets. The Sarbanes-Oxley act is a response to the corruption with the attempt to improve business accounting regulations. The act is considered the most extensive increase in regulations since the Security and Exchange Act of 1934.
CFO is larger than net income each year due to the noncash charges of depreciation and amortization. In 2008, net income is negative, but CFO is still positive as $1,879 million due to the one time goodwill impairment charges. Inventory has decreased from 2006 to 2008, after its acquisition of May in 2005. Receivables also decreased each year, which maybe a sign that the company’s receivable quality has improved. Macy’s decreased its purchase of inventory and property and equipment and decrease disposition of property and equipment year by year.
The high costs of funerals or / the social pressures of planning a funeral Funerals can very costly, even more now then what they have been in the past because of all the crime and health issues etc. In today’s world, it’s very sad as it is to see a loved one die. Then to also have to pay for all the funeral arrangements, as well as the clothes that are needed for the deceased. Funerals are so overrated to me; it’s just another way to get your money. Many people are also vulnerable at the time and the workers are trying to sell you the most expensive casket they can think of as well as the make-up, the flowers, and all the many things that cost so very much for someone who’s not even living anymore.
This was because unemployment was rising fast (Doc. E), which meant people were spending less to the point that it caused a huge shortage of income to many companies and businesses. The stock exchange was a replacement of work, where people risked their money on what they speculated would do well (Doc. F). Since the unemployment rate was high and businesses were failing, the stock market went through a dramatic crash causing many people and companies to go bankrupt.
Health care in the United States including insurance continues to rise dramatically and even those with insurance are beginning to feel the weight of the cost as premiums increase and copays. Likewise, in socialized medicine countries this cost is being felt in the form of taxes. This rising cost of healthcare adds to another problem of access. Many individuals do not have access to quality healthcare especially in poor and rural areas (Health Care Problems, 2012). The rising cost of healthcare increases this lack of access by cutting people off from care financially.