However, the account receivable turnover and inventory turnover ratios went down in 2008 as compared to 2007. They went down by 3.71 and 6.7 times respectively, in the year 2008 as compared to 2007. The account receivable turnover went down due to decline in revenues and increase in account receivable in 2008; it shows that the company generated fewer revenues in 2008 against its account receivable in 2008 as compared to 2007. The inventory turnover ratio was also down due to no change in inventory but the revenues went down. All profitability ratios are showing decline in the year 2008 as compared to 2007.
What is the value of this option today (use arbitrage pricing in a binomial tree)? Would Penelope want to invest under this scenario? Ignoring both the possibility of selling the equipment after two years and investing in the second-generation project, the NPV of the project will be ($3,154). To value the option to sell the equipment in the second year and to calculate NPV of the project with the option we use a binomial tree valuation. We assume: * the cash flows would either increase by 64.9% or decrease by 39.3% over each period * the risk free
The FIFO method is commonly used to calculate the value of the cost of goods sold during a period and of inventory on hand at the end of a period. FIFO method assumes that newer inventory remains unsold while inventory manufactured or purchased first are sold first. Therefore, the newer inventory is assigned to ending inventory and cost of older inventory is assigned to cost of goods sold. The actual run of inventory may not exactly match the first-in, first-out outline. Here is an example of how FIFO works, suppose a purchase was made for 200 units at a price of $5 per unit and another 300 units at a price of $10 per unit.
PREMIER INVESTMENTS 3.0 Profitability These ratios measure Premier Investments capability to generate profit. If these ratios are the same or greater than the previous period, higher relative to a competitor’s ratio, or similar to industry ratios, it shows that the company is performing well. Return on Equity The profit or loss earned in utilizing the investment of owners. Over this two year time period, Premier Investments watched their return drop 4.89% from 9.24 to only 4.35%. This had a very negative effect on Premier Investments and their shareholders as they received a very little percentage of return in 2011.
This is the second extraordinary item. 3. The another extraordinary item can be the current installment of LT debit in 2007, the current installment of LT debit in 2007 was only $ 18 million. Especially compare to fiscal 2009 which decreased $1749 million. This situation happened because of the increasing sales of fiscal 2007 ($90,837) that they were able to pay back $1749 million debts.
As the ratio of current assets to sales has been decreasing over the past five years, we will project the ratio to fall to 13.5% in 2008 and hold steady for the period of the projections. The company’s growth rate in PP&E has been decreasing by 4 points for each of past five years, so we will assume that that trend will continue. Current liabilities to sales will be set at 12.7%, which is the average of ratio for the past five years. We forecast the equity using the equity in the previous year plus the net income in that year. In addition, the three types of external sources of capital are each presented in three excel forms.
Problem: P22-6, Accounting Change and Error Analysis Course: AC557 Intermediate Accounting III "On December 31, 2010, before the books were closed, the management and accountants of Madrasa Inc. made the following determinations about three depreciable assets." 1. Depreciable asset A was purchased January 2, 2007. It originally cost $540,000 and, for depreciation purposes, the straight-line method was originally chosen. The asset was originally expected to be useful for 10 years and have a zero salvage value.
And the steel deliveries are in a three-day window. Moreover, Kenco implements the cycle counting where 100 items making up 80% of the sales volume are counted every four weeks. What is left in inventory in 12 months is discounted to sell or scrapped. 5) Describe Kenco’s CI system and compare this process change using traditional budgeting Kenco CI system is following four steps: _ Activities for improvement must be selected _ Root causes for the activities performance as it exists must be determined _Modifications must be discovered and implemented _The impact of the change must be assessed. Traditional budgeting always plans and setting a budget for revenues and expenses, and it only focuses on short-term but not planning on long-term vision.
m. a meeting was held by the FOMC (The Federal Reserve, 2011). Reports say developments in domestic and foreign markets are evident since the last FOMC meeting on June 21-22, 2011 (The Federal Reserve, 2011). An indication proved the recovery of the economy remained slow in recent months (The Federal Reserve, 2011). Labor markets conditions remained weak, and the recent recession was deeper than previously thought according to the Bureau of Economic Analysis (The Federal Reserve, 2011). This was realized by the real gross domestic product and how it did not attain its pre-recession peak by the second quarter of 2011 (The Federal Reserve, 2011).
A recession involves a large decline in output and employment. According to the NBER, in the past 6 recessions, industrial production fell by an average of 4.6 percent and employment by 1.1 percent. The Bureau waits to declare that a turning point in the economy is a true peak leading to a recession until the data show whether or not a decline is large enough to qualify as a