In contrast, back in 2008, when the global financial climate and stock markets were trepid, it created a surplus for many retailers and for a period, leaving items sitting on shelves longer than usual. Many businesses closed their doors, in fact, the only retailers that thrived during this tenuous financial climate were “dollar stores” (Tseng. 2012) “The immediate effect of fiscal policy is to change the aggregate demand for goods and services. A fiscal expansion, for example, raises aggregate demand through one of two channels. First, if the government increases its purchases but keeps taxes constant, it increases demand directly.
Analysis of Financial Position of Berry’s Bug Abstract The purpose it to analyze financial position of the company for the year ended 2008 as compared to year ended 2007. The techniques of horizontal, vertical and ratio analysis have been used for this purpose. Ratios Analysis The liquidity ratios shows that the company ability to pay off its current liabilities in the year 2008 is better than 2007. As current ratio increased by 2.42 and acid test ratio increased by 2.31 times in 2008 as compared to 2007. However, the account receivable turnover and inventory turnover ratios went down in 2008 as compared to 2007.
In the short-run, a larger government deficit would cause an increase to “total planned expenditures and higher aggregate demand “(Miller, 2012, pg. 308). The real GDP equilibrium would rise above the full-employment level because of deficit spending. The price level would also increase. In the long-run, the economy “adjusted to changes in all factors” and the “equilibrium real GDP remains at its full-employment level” even though the increase in the budget deficit causes a rise in the aggregate demand.
B120 TMA03 Part I Question 1 a) The income statement's purpose is to show the financial position of a business by assessing its incomings and outgoings over a given period of time. The problem that arises from this statement in relation to Designer Labels is that this business has to purchase its merchandise well in advance of each season. This means that there will always be a significant amount held in assets. b) I note that although sales were down in 2012, the figure in comparison isn't such a large drop and the gross profit remains at a similar level to the previous year. I am concerned by the large leap in total expenses for the year 2012 and I see that although the majority of these totals have dropped, the ones that have increased have been by large amounts in the areas of wages and salary, maintenance and depreciation.
Considering this increase in cash flow from operating activities along with the increase of net income from 2004 through 2006, it is observed that Wal-Mart’s operations are doing well. Grading Wal-Mart: I would give Wal-Mart a C grade. I would feel better if they had their current assets higher then their current
Clarkson Lumber Clarkson Lumber Company has been expanding at a rapid rate. The increase in revenue has increased current assets which in turn has made it difficult to keep up with debt. In addition, the buyout of Clarkson’s brother-in law has compounded the problem and need for cash. In 1995 Clarkson grew 29% and while the actual sustainable growth rate was 21%. FY96 sales projections of $5.5 show that if the percentage of sales were to remain constant in the balance sheet, they would need an additional $357K of funding (cash) to keep up with bill payment.
d. If a firm is more profitable than most other firms, we would normally expect to see its book value per share exceed its stock price, especially after several years of high inflation. e. The more depreciation a firm has in a given year, the higher its EPS, other things held constant. 2. Which of the following statements is CORRECT? a.
After evaluating Lucent Technologies balance sheet, it’s more than likely that the creditors and investors would more than likely be concerned that even though the cash and cash equivalents are decreasing, the assets are accelerating steadily. The fact that Lucent Technologies is part of a very
Is ADM growing or shrinking its investment base in PPE? It is growing its base in PPE, as it continues to buy more PPE then the depreciation expense by a significant amount. 6. Estimate ADM’s free cash flow by taking CFO – CFI. Was their free cash flow positive or
This provided for marketer finance and also the ability to require advantage of early payment discounts that additional reduced operational prices. As a testament to the success of this business model, from 2008 through 2011, Costco was able to increase the amount of warehouses by 15.6%, revenues by 22.6%, and earnings by 14.0%. 2. What are the chief elements of Costco’s current strategy and is it effective? Costco’s key