The entire course will be covered in five weeks. First week of the course will involve the general information about the business and its environment. In the subsequent weeks, students will be provided information about the business and ethics to be followed. In every week, there will be Bus 475 final exam on which students will have to appear to test their knowledge and level of understanding. The students will also be provided some simulation practices in which the artificial situation will be provided to the students, and these will be asked to enact according to the situation considering ethics in mind.
A firm’s cash flow statements provides very useful data to help investors understand how a company’s operating activities produce cash for the firm. Perhaps more importantly, investors can use a cash flow statement to determine the possibility of a firm generating new cash flows, otherwise known as future cash flows. Two common ways to analyze a cash flow statements, and other financial statements, is to common size the financial statement and to use various financial ratios. Wal-Mart’s positive cash flow comes from the firms operating activities, with this segment being the only segment of the three; operating, investing, and financing, that has positive cash flow. It is crucial that Wal-Mart keeps the firms operating activities cash flows largely positive.
The income statement is important because it will show whether the company’s revenue exceeded expenses for a specific period resulting in net income or the amount the company may have lost because the expenses exceeded the revenue. The retained earnings statement is equally important because it will indicate the exact reason why the company’s retained earnings increased or decreased over the reporting period. The balance sheet is important because it is the overview of the company’s financial condition at the time of the reporting period and the statement of cash flow’s is important because “Reporting the sources, uses, and change in cash is useful because investors,creditors, and others want to know what is happening to a company’s most liquid resource.” (Weygandt,
Unit 2: Business Resources P6- Controlling costs Introduction- the relationship between costs, revenue and profit. The importance of and the for controlling costs Costs- type of Financial techniques available in controlling costs Break even analysis (CPV) Cash flow forecast Budgeting and budgetary control Conclusion TR- TC= Net profit/ loss Cost must be controlled by all businesses no matter the size of the business even if it’s small or large. As there is a clear relationship between cost and revenue and results would have an impact on the profit within the business. When the cost increased the profit would decrease, as the business would have to pay more whereas less profit will be left. On the other hand if the cost is decreasing it would have positive impact on the profit as the profit will increase.
So it would be positively affected by increasing dividend payouts or making additional payouts of the same dividends. On the other hand, Champion noticed that their shareholders appeared to be more concerned with capital gain, and not bought the company’s stock for income. So by paying out dividends, the investors will be more confident about the financial
Financial Analysis In comparing The Hershey Company with one of its closest competitor, Nestlé, we find that The Hershey Company is financially healthier and stronger. Table 1 shows some financial ratios of both companies. In analyzing both the current and quick ratios, Hershey’s ratios are higher; therefore the company has more capability to pay off its financial obligations. The debt-to-equity ratio is also higher for The Hershey Company; this is good news for its shareholders because the greater earnings are shared among the same amount of shareholders. However, the company must be careful because a too big of a ratio can eventually lead to bankruptcy (Investopedia).
This method has been considered to be more appropriate to suite the complexity of today’s business world because it allows cash flows, whether inwards or outwards, to be combined with an expected future movement of cash thereby providing a more accurate representation of a firm’s financial condition. In other words, accrual accounting is based on the understanding that if an economic transaction takes place the movement of cash that represents that transaction must subsequently follow sometime in the future, therefore accrual accounting effectively disregards the fact that the cash can be received tomorrow or in a year’s time thereby recoding economic transactions as they occur. Today accrual accounting dominates the accounting arena even though it is relatively a complex
If a lot of debt is used to finance increased operations then it will incur a high debt to equity ratio, the company could potentially generate more earnings than it would have without this outside financing. If this were to increase earnings by a greater amount than the debt interest cost, then the shareholders benefit as more earnings are being spread among the same amount of shareholders. However, the cost of this debt financing may outweigh the return that the company generates on the debt through investment and business activities and become too much for the company to handle. This can lead to bankruptcy, which would leave shareholders with nothing. The debt/equity ratio also depends on the industry in which the company operates and Smithon Widgets being a manufacturing company the debt equity ratio is normally high.
Wise stock investing can be a tricky way to save for retirement because of the way stocks rise and fall. People that are not very knowledgeable about stocks can rely on experienced companies, like T. Rowe Price, to help guide them in a proper direction. Another strategy is taking full advantage of the 401k program if it is available. This is accomplished by maximizing the contributions made, especially if the employer matches 100%. As a final point, tapping into assets such as a home can bring extra income for a comfortable
If they cannot generate a profit then they will not be able to provide the demand that consumers are requesting. Lenders are paid based off of interest and the ability of a company to pay them. With productive opportunites, the more profitability the business can generate, the higher the interest rate lenders can be paid. The company will also have enough money to have supply and demand for their business. “The interest rate lenders will charge depends in large part on their time preferences for consumption” (Gapenski, L. 2008. pg.