A firm’s value depends on the positive net income generated in the past. True False A firm’s value depends on the firm’s ability to generate positive cash flows now and in the future True False When determining the value of a firm, which of the following statements is true? • Inversters are risk neutral. Other things equal they prefer to pay more stocks that are less risky and have uncertain cash flows • Investers love risk. Other things equal they prefer to pay more for stocks that are more risky and have uncertain cash flows.
Being able to track sales compared to the previous years’ numbers is a valuable tool in being able to track business. They use this information to forecast on where they think the business will be heading in the next week, month, or year. If the debt percent gets to high then they need to adjust the amount of liabilities that they have to bring that number down. Knowing the times interest earned ratio allows the managers to know at what percent the company is earning interest on its net income. Investors find this information lucrative because the more expendable cash a company has the more likely they are to pay out in dividends for the stock holders..
The primary users are the 3 current owners including yourself who take an active role in managing the company. You would like the financial statements to be presented in such a manner as to indicate strong financial success and growth. You have plans to expand and possibly go public and having strong financial statements will enable you to attract the right investors and resources needed to make this happen. The more money the company makes the more you will benefit financially as the owners. It is important to remember that financial statements must be presented fairly and in accordance with accounting principles as it is evident here that there is a bias towards presenting statements in a financially strong way.
Younger individuals are likely to invest most of their contributions in stocks, and the increased demand would propel stock prices higher. But this may be a short-term effect. There's a presumption that privatization will drive up stock prices. It might initially, but longer term, equity performance will continue to be influenced by the revenues and profits earned by public companies. In addition, at least a portion of these funds will probably be invested in
Monetary policy is the use of interest rates to manipulate the level of aggregate demand in the economy and loose (expansionary) monetary policy is a reduction in the interest rates. This will result in an injection of extra consumption because it is cheaper to borrow money on credit cards and therefore allowing consumers to spend more which will cause an increase in aggregate demand (AD). Additionally, extra consumption will allow shops to gain more profit preventing “business failures.” Furthermore, mortgages will be cheaper and therefore consumers feel richer and there will an extra injection of consumption. AD will also increase due to an increase in investment, causing an increase in aggregate demand from AD1 to AD2 as shown below. However,
Corporations can choose either calendar year or fiscal year. It is not dependent on the tax years of the shareholders. Sole proprietorship and Partnership generally use the tax year of the owner. S-Corp typically has to use the calendar year, unless it can show the IRS why
2. If you change from a 401k into a Roth 401k plan the taxes will go up even if your income stays constant. You will trade from a tax deductible 401k income into non deductible Roth 401k contribution. The Roth 401k is designed for those who think in 5 years or more their income or marginal tax rate might be significantly higher. Contribution Limits in a Roth
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All its income and expenses are reported on from 1020 and it pays a tax that ranges from 15 percent to 39 percent. The shareholders are not liable for a tax based on the corporation's income. However, shareholders must include dividend
Under Ulrich, the strategy has been to differentiate their brand by providing high-quality, fashionable merchandise at low prices. However, with the economy in financial mayhem, consumers are spending a lot less than in the past. Target, like many other retailers, may be faced with several significant issues in the near future. Target Corporation