Re FTA between US and IsraelIn taking this class, I decided t.docx

Re: FTA between US and Israel
In taking this class, I decided to chose Israel as a trading
partner of US due to its long standing relations bilaterally.
The Free Trade Agreement between US and Israel was the first
one to be entered by US. This expanded investments through the
reduction of barriers while at the same time promoting
regulatory transparency. The major areas of trade under the FTA
are mainly agricultural telecommunication and government
procurements. Under the FTA, the two countries have mutually
benefited through tariff reductions in areas such as US textiles
and apparel exports. Israel on its part benefits through
agricultural free trade, military defense equipments exports, and
precious stones.
http://www.israelemb.org/washington/Obama_in_Israel/Pages/U
S-Israel-Trade-Relations.aspx
However, the FTA pact between the two countries has
specifications for qualifying products that meet tariff
elimination threshold. Goods and products that are not
originally from any of the two countries or have a bigger
content of product coming from any of the two countries do not
qualify to be given tariff elimination. The benefits on the other
hand are numerous since the tariffs for any other products are
agreed upon thus, cushioning the two countries of fluctuating
tariffs of commodities and in times of economic turmoil.
· Re: DQ: 5.2 International Trade posted by WAWA NGENGE
Aug 06, 2014, 9:53 PM
The one hidden secret in the discussion about exchange rates
and international trade this week is the DOLLAR WORLD
RESERVE CURRENCY SYSTEM. Here is a brief Stock Market
Oriented analysis of what would happen if the US dollar lost its

status as the world reserve currency, as usual, CETERIS
PARIBUS: http://www.globalresearch.ca/the-us-dollars-fragile-
reserve-currency-status-the-great-deceiver-the-federal-
reserve/5382184
" Washington's power ultimately rests on the dollar as world
reserve currency. This privilege, attained at Bretton Woods
following World War 2, allows the US to pay its bills by issuing
debt. The world currency role also gives the US the power to
cut countries out of the international payments system and to
impose sanctions.
As impelled as the Fed is to protect the large banks that sit on
the board of directors of the NY Fed, the Fed has to protect the
dollar. That the Fed believed that it could not buy the bonds
outright but needed to disguise its purchase by laundering it
through Belgium suggests that the Fed is concerned that the
world is losing confidence in the dollar.
If the world loses confidence in the dollar, the cost of living in
the US would rise sharply as the dollar drops in value.
Economic hardship and poverty would worsen. Political
instability would rise.
If the dollar lost substantial value, the dollar would lose its
reserve currency status. Washington would not be able to issue
new debt or new dollars in order to pay its bills.
Its wars and hundreds of overseas military bases could not be
financed."
Think about this as you review "free" trade agreements.
In addition I recommend that you review the section entitled
"FREE TRADE ISN'T WORKING"
at file:///home/wawa/Documents/eBook%20Collection/ha-joon-
chang-bad-samaritans.pdf in Ha Joon Chang's book, BAD

SAMARITANS or T H E M Y T H O F F R E E T R A D E A
N D T H E S E C R E T H I S T O R Y O F C A P I T A
L I S M
If you cannot open the link, just search for the book on Google,
using ".pdf bad Samaritans ha joon chang"
Thoughts?
· Comment on Aug 08, 2014, 12:49 PM
Re: DQ: 5.2 International Trade
posted by ADAM HARRIS
Aug 08, 2014, 12:49 PM
Trade agreements are typically in place when both parties agree
that a stable framework for investment would maximize
effective utilization of economic resources and improve living
standards. One such trade agreement is the US-Bahrain FTA.
There are many benefits to include "cooperative efforts related
to labor rights and environmental protection" as well as
"advancing economic reforms and liberalization in the Middle
East" (USTR, 2014). Since it's inception in 2009, Bahrain has
opened its services market wider than any previous FTA
partner, creating new opportunities for US financial providers
and companies alike that offer telecommunications, healthcare,
express delivery, audiovisual, architecture, distribution, and
engineering services. Finally, because of this FTA, US farmers
have significantly increased agricultural exports.
USTR (2014). Bahrain Free Trade Agreement. Retrieved on
August 08, 2014 from http://www.ustr.gov/trade-
agreements/free-trade-agreements/bahrain-fta
Dear ADAM HARRIS

Regarding your post and the link attached, U.S and Bahrain
FTA agreement took effect in the year 2006. Since then, a
number of opportunities especially to U.S farmers were created
as well as achievement of political reforms to the Bahrain
citizens. These are all the essence and positive impacts of
bilateral trade agreements. Consequently, the economy of
Bahrain grew tremendously after opening its services market
where also financial service providers and companies offering
audiovisual, telecommunication, healthcare, express delivery,
engineering and architecture from US received great boost. The
FTA between the two countries also allowed US to venture into
the Gulf Cooperation Council of which Bahrain is a member. As
you said, the greatest benefit to Bahrain when it entered to an
FTA agreement to US is the environmental issues and
harmonized labor rights.
· Comment on Aug 09, 2014, 8:41 AM
posted by JOHN RUIZ
Aug 09, 2014, 8:41 AM
Prior to taking this class, I never really thought about just how
important these free trade agreements were with other countries.
Peace treaties are only as effective as the willingness to
continue to follow them, but when you become dependent on
another country, you begin to want to keep the peace with
another country in order to prevent being cut off. This thought
alone really makes me rethink my perception of the United
States being so foolish to import more than they export. This
country has a significant debt and this class has really shown
me that it will never get out of debt no matter what this country
does. We might as well apply political transactions to our
significant financial lose policies.

posted by ALFRED MATHENA
Aug 09, 2014, 4:59 PM
posted by WAWA NGENGE
Aug 09, 2014, 10:29 PM
posted by WAWA NGENGE
Aug 09, 2014, 9:48 PM
Adam
How can two countries with different size economies and
military power agree on the meaning of the key concepts in this
sentence "cooperative efforts related to labor rights and
environmental protection" as well as "advancing economic
reforms and liberalization in the Middle East"? Consider the
quote below from Ha Joon Chang's 23 things and share your
thoughts
http://mafhom.files.wordpress.com/2013/02/23-things-they-
dont-tell-you-about-capitalism.pdf
We see a regulation when we don't endorse the moral values
behind it. The nineteenth-century high-tariff restriction on free
trade by the US federal
government outraged slave-owners, who at the same time saw
nothing wrong with trading people in a free market. To those
who believed that people can
be owned, banning trade in slaves was objectionable in the same

way as restricting trade in manufactured goods. Korean
shopkeepers of the 1980s
would probably have thought the requirement for 'unconditional
return' to be an unfairly burdensome government regulation
restricting market freedom.
This clash of values also lies behind the contemporary debate
on free trade vs. fair trade. Many Americans believe that China
is engaged in
international trade that may be free but is not fair. In their view,
by paying workers unacceptably low wages and making them
work in inhumane conditions,
China competes unfairly. The Chinese, in turn, can riposte that
it is unacceptable that rich countries, while advocating free
trade, try to impose artificial
barriers to China's exports by attempting to restrict the import
of 'sweatshop' products. They find it unjust to be prevented
from exploiting the only
resource they have in greatest abundance - cheap labour.
Of course, the difficulty here is that there is no objective way to
define 'unacceptably low wages' or 'inhumane working
conditions'. With the huge
international gaps that exist in the level of economic
development and living standards, it is natural that what is a
starvation wage in the US is a handsome
wage in China (the average being 10 per cent that of the US)
and a fortune in India (the average being 2 per cent that of the
US). Indeed, most fair-trade-
minded Americans would not have bought things made by their
own grandfathers, who worked extremely long hours under
inhumane conditions. Until the
beginning of the twentieth century, the average work week in
the US was around sixty hours. At the time (in 1905, to be more
precise), it was a country in
which the Supreme Court declared unconstitutional a New York
state law limiting the working days of bakers to ten hours, on
the grounds that it 'deprived

the baker of the liberty of working as long as he wished'.
Thus seen, the debate about fair trade is essentially about moral
values and political decisions, and not economics in the usual
sense. Even though it is
about an economic issue, it is not something economists with
their technical tool kits are particularly well equipped to rule
on.
All this does not mean that we need to take a relativist position
and fail to criticize anyone because anything goes. We can (and
I do) have a view on
the acceptability of prevailing labour standards in China (or any
other country, for that matter) and try to do something about it,
without believing that those
who have a different view are wrong in some absolute sense.
Even though China cannot afford American wages or Swedish
working conditions, it
certainly can improve the wages and the working conditions of
its workers. Indeed, many Chinese don't accept the prevailing
conditions and demand
tougher regulations. But economic theory (at least free-market
economics) cannot tell us what the 'right' wages and working
conditions should be in
China.
Re: International trade
Dear Adam
It is good that you are realizing the chemistry between trade,
bilateral relations and peace. However, one thing you should
take into consideration is that fact that, US has a high number
of bilateral agreements with many countries than any other
single country in the world. Endorsing moral values alongside
these trade regulations serves to restore sanity in the trade.
With regard to China, you should have analyzed their imports,

exports, and revenues alongside its gross GDP. This would have
helped you in making a sound criticism of their labor rights.
That is the same reason why US-Bahrain FTA pact had hitches
in discussing the labor rights so that US Citizens working in
Bahrain are not subjected to harsh working conditions
posted by JOHN RUIZ
Aug 09, 2014, 8:33 AM
For over 29 years, the United States has had a free trade
agreement with Israel, which was the very first free trade
agreement that the United States has ever entered. The Israel
free trade agreement serves as a barrier reduction and promotion
of regulatory transparency. Over the years, there has been a
significant reduction between Israel and the United States in
both Imports and Exports, but the United States is still
importing far more than they are exporting. The main gains of
the Israel free trade agreement is the exportation of pistachios
and the United States is able to import Egg plants as well as
floral and herbs used for pharmaceutical purposes. The free
trade agreement additionally allows an open line of
communication with Israel, but over the years there has been
several issues between the United States putting into question
whether there would be a continued free trade agreement with
Israel.
Re: International Trade
Dear John Ruiz
I concur with you on this. The trade partnership between US and
Israel has been lengthy and of mutual benefit. Most of US
agricultural products and aircraft parts are being exported to
Israel. US have been importing architecture, military weapons
and precious stones from Israel. This economic partnership has
not only boosted the economies of the two nations but also
increased their participation in the fight against extremist

groups. Such a case is the joint installation of missile
interceptor Iron Domes in both Israel and US. Finally, Israel
position is strategic in enhancing partnership between US and
the Arab league.
posted by ALFRED MATHENA
Aug 09, 2014, 5:07 PM
This is true, and I wonder sometimes if there are more things
included in the free trade agreements other than just goods. I
would think that the allegiance that we have with Israel may
have started with the free trade agreement but has grown to be
much more than that. I also think that if you include the
NAFTA agreement we tend to have more of an allegiance with
Canada since then as well. Wawa, do these free trade
agreements include other alliances or are they strictly based off
of trade and economics?
posted by SHARRISE WILLIAMS
Aug 09, 2014, 12:39 PM
The Foreign Exchange is the act of trading different nations'
moneys. The moneys take the same forms as money within a
country. The greater part of the money assets traded in foreign
exchange markets are demand deposits in banks. A very small
part consists of coins and currency of the ordinary pocket
variety. I have experienced The Foreign Exchange policy with
one of the patients at my health care facility. Her pension check
is deposited into her patient account at the facility and because
she is of Dutch descent, her payment comes in differently each
month due to the rate of exchange changing. Sometimes there is

a $15-$20 difference each month and then she receives a one
time payment each year which comes from the amount that she
would receive if her payments were the same each month but
they differ so she still gets her amount throughout the year.
International Economics, Fourteenth Edition
Chapter 17: The Foreign Exchange Market
· Re: WEEK TWO - DISCUSSION QUESTION # 2
posted by ANDREW WAREING
Aug 26, 2014, 6:46 AM
The cost of goods sold is the total cost that can be attributed to
the production of the products which will be sold by the
company. The cost of goods can include material costs and the
labor used through production. It can be calculated on both a
perpetual and periodic system. In perpetual system, the cost of
goods sold is recorded each time a sale is completed. In a
periodic system the cost of goods sold is calculated at the end
of the period.
Kimmel, P. D., Weygandt, J. J., & Kieso, D. E. (2011).
Accounting tools for business decision making (4th ed.). : John
Wiley & Sons Inc.
Re: WEEK TWO - DISCUSSION QUESTION # 2
posted by Linda Moore
Aug 27, 2014, 2:09 AM
Andrew - we have to make our product, and this cost is our
"cost of goods sold". This can also be applied to a service

business, if we can define a cost of that service. A dentist visit
will have costs involved; for the cleaning solution, the
personnel to perform the service, etc. Therefore, this can also be
a cost of goods sold! Depending on the type of company and
product, this can be many types of things; payroll, materials,
supplies, etc.
Class - What examples can you think of?
Aug 27, 2014, 12:59 PM
Other examples in my industry, which is software, would be
items such as labor, office space, and investment in IT
infrastructure. In business consulting the costs of sale would be
the research costs, travel expenses and report production costs.
For a company in the spectacle industry costs would be
associated with the manufacture of frames and lenses as well as
the screws and other items required to complete manufacture.
Aug 28, 2014, 8:27 PM
Andrew - you can see that with each industry, the cost of goods
sold can be described. Good examples! No matter if it is an
eyeglass business or a consulting business, we can identify and
give a value to the items that we need.
Anna: WEEK TWO - DISCUSSION QUESTION # 2
posted by ANNA WEBB
Aug 26, 2014, 8:41 AM
Cost of goods sold is an expense. The total cost of merchandise
during a specific period. Under a periodic inventory system, we

calculate this value by adding the cost of goods on hand to the
cost of goods purchased at the beginning of the period. Then, at
the end of the period - subtract the current cost of goods on
hand.
Kimmel, P. D., Weygandt, J. J., & Kieso, D. E.
(2011). Accounting: Tools for business decision making (4th
ed.). NJ: John Wiley & Sons
Re: Anna: WEEK TWO - DISCUSSION QUESTION # 2
Aug 28, 2014, 7:25 PM
Anna - I agree with your formula, except the cost of goods sold
is defined as: beginning inventory + purchases - ending
inventory.... This gives us the change in our inventory levels;
meaning that this dollar amount is now the "cost of goods sold"
and should be subtracted from sales to arrive at our "gross
profit".
Class - Questions or Comments?
posted by Mark Pollack
Aug 26, 2014, 12:28 PM
My other classmates defined the cost of goods sold very well.
The "cost" is an important part of the definition because it
shows the true meaning of the statement. How mush did product
"x" cost the company so that it may be sold. The section is filed
under an expense on your balance sheet and is a great tool.
When I owned my animal hospital, I could look at the cost of
the goods sold and the income I generated from those products.
I could tell rather quickly on my itemized list where my highest
levels of return were generated and where I needed to raise

pricing. The computer system we used took the product out of
inventory and sent it directly to Quickbooks.
Without this type of data, a business owner, manager, investor,
etc would not understand what the sale is costing them.
Therefore, product markup, promotions, sales, etc would be
impossible to regulate profitability.
posted by DONALD DENNIS
Aug 26, 2014, 3:55 PM
What is the reason distribution costs are not included? Although
distribution costs are part of the cycle, it is not direct for the
sake of production. Just a thought.
Aug 27, 2014, 2:30 AM
Mark - that is a great example, these concepts can be applied to
almost every business. By looking at this per product line, we
can see where we need to make changes. Sometimes, the
change may be to eliminate the particular product or service,
because we cannot lower the cost or raise the price due to
outside factors.
Aug 27, 2014, 5:09 AM
That is very true Linda. We also used the data to see if we could
create a loss leader. We know that we cant compare product
prices to "big box" retailers such as PetSmart; however, if we
can have the same or lower prices on the most shopped items,
we can capture the revenue elsewhere. It is vital to know a

breakdown of the cost of goods sold so you can see what people
are buying, what is it costing you to sell the item, and overall
profitability. understanding these reports as an owner really
drives your ability to be a successful business.
I have had a number of people tell me that they want to start a
company. It is a very analytical job to run a successful business
because you need to understand accounting principles even if
you hire a CPA. You should always hire a CPA!!
Aug 26, 2014, 3:51 PM
Costs of goods sold are the direct costs that influence the
production of goods sold. These production costs include
materials, labor and other production costs of a particular good.
What is not included in this is distribution and sales force costs.
COGS is shown on the income statement. These costs can also
be deducted from the revenue in order to find the gross margin.
We calculate this by adding the amount of purchases made
during a specific period, then deducting the ending inventory.
Wiley & Sons Inc
Aug 27, 2014, 2:17 AM
Donald - this is an important calculation; to determine our gross
margin. The sales less cost of goods sold tells us this figure, so
we can see how we are doing and percentage-wise also. This is

before subtracting our operating costs as well.
Class: how do we calculate our cost of goods sold figure?
COGS
Aug 27, 2014, 8:52 AM
Beginning Inventory + Inventory Purchases - End Inventory =
Cost of Goods Sold
I currently sell on ebay (more as a hobby right now). If I were
to have an inventory count at the beginning on August that
shows I have $700 worth of items on hand. I purchase another
$400 worth of items. At the end of August I show, I have an
inventory amount worth of $500. Here is how I will solve.
$700 (beginning Inventory) + 400 (purchases) - 500 (ending
inventory) = $600
Response from Patricia to Donald
posted by patricia surber
Aug 27, 2014, 8:49 PM
Hello Donald:
You are correct. when figuring the costs of goods sold the first
two numbers that a company has is the current inventory amount
and the inventory amount from the previous inventory
calculation. The purchases in between the last inventory up
until now is the amount that needs to be added to the previous
inventory amount then subtracted from the current inventory
amount.
For example, if I had a current inventory amount of $20,000 and

a previous inventory amount of $50,000 then I need to add
all my purchases for that time period since the last inventory
which could be $40,000.
$50,000 + $40,000 - $20,000 = $70,000 (cost of goods sold)
Re: Response from Patricia to Donald
Aug 28, 2014, 8:32 PM
Patricia -the calculation is important; we have to understand the
fact that we have purchases during the period, and a change in
our inventory level. This has to be integrated into our income
statement to see our profit level.
Re: COGS
Aug 28, 2014, 7:40 PM
Donald - good example. This means that this is what it cost you
to sell the items you did sell. Then, you can figure out if you've
made a profit or not. This can be for a merchandising business
or a production facility, and the concepts also can apply to a
service business. What does our service cost to provide? For
example, a hairdresser; the haircut will cost a certain amount as
far as shampoo, hair gel, the time of the hairdresser, part of the
overhead, etc.
Response from Patricia
Aug 26, 2014, 10:05 PM
The cost of goods sold is defined as the total cost of
merchandise sold during a certain time frame. The cost of goods
sold is an expense which is revenue associated from the selling
of goods. Only a merchandise company has the cost of goods
sold because a service company have no use for such an

expense.
To calculate value:
1) The way to calculate this value is to begin with the beginning
inventory value which is the ending inventory from the previous
period.
2) Add all of the amounts from each invoice for products
received during that month which is the total inventory
purchases for that time frame.
3) Add all the labor costs such as wages and salaries of all
employees who work for the company.
4) Add all the materials, supplies, and other costs to
manufacture the goods.
5) Add all these amounts together which will be the total cost of
goods that are available.
6) Find the ending inventory value.
7) Take the total cost of goods that are available minus the
ending inventory value which gives you the cost of goods sold.
posted by JASON YORGENSEN
Aug 27, 2014, 2:17 PM
Class,
The costs of goods sold can be seen as an expense. It is the cost
of the total starting inventory plus any purchases made. That
total is subtracted by the ending inventory giving a business the
cost of goods sold. That cost can change depending on how
much inventory that the business is when it was purchased.
Depending on inflation the cost of the goods in inventory can
go up or down. It is important for businesses to sell off any
inventory quickly to ensure that they maximize profits. This is
why i feel many businesses will go to other countries to build

their inventory. Attempting to keep the costs low and the price
point high.
Jason Yorgensen
Aug 28, 2014, 8:44 PM
Jason - that's the important part; to make sure our inventory
moves; is selling quickly. We don't want to end up with
outdated or too much inventory, that won't sell. It is important
to understand our customer, our client; and to get them the best
products at the best cost. We have to always remember we have
competition to think about; what are the competitors doing? Do
they have a cheaper or better product that can cause us to lose
sales? These are some of the questions we have to ask
ourselves.
posted by TIFFANY MINGO
Aug 27, 2014, 2:29 PM
Cost of goods sold is related to how much a company produces
a certain product and what they sell it for on the market. It
pertains to the amount of money to create the product and how
much revenue they are making off of selling it. Cost of goods
sold is shown on the income statement and is subtracted from
the net income or revenue for a certain period of time where it
tells a business how well their gross margin is. To calculate
COGS you would take the amount of inventory plus the amount
of revenue they make off of selling the product minus the
purchases they made related to the product.

posted by Kierra Austin
Aug 28, 2014, 6:17 PM
Cost of goods sold is the cost that goes into creating the
products that a company sells. Therefore, the only costs
included in the measure are those that are directly tied to the
production of the products. There are several ways to calculate
cost of goods sold but one of the more basic ways is to start
with the beginning inventory for the period and add the total
amount of purchases made during the period then deducting the
ending inventory. This calculation gives the total amount of
inventory or, more specifically, the cost of this inventory, sold
by the company during the period.
WEEK TWO - DISCUSSION QUESTION # 1
Aug 19, 2014, 12:52 AM
Aug 26, 2014, 6:43 AM
A company with a high quality of earnings rating is one that
provides full and transparent financial information. This has
become important in the light of recent financial scandals such
as Enron. Some companies use different accounting methods
which makes it difficult for potential investors to accurately
compare performance across organizations. Other companies,
such as Cisco use Pro Forma statements which excludes certain
accounting factors. A company with a high quality of earnings
rating makes it easier for investors to understand the real
performance of a company.
Wiley & Sons Inc.

Aug 27, 2014, 2:24 AM
Andrew - It is important to keep our data true and reality
based. By making sure we give our readers the truth, we can be
counted on as a business and the decisions made can be made
with confidence. Also we want to know that the sales data is not
inflated, and it can be repeated month after month. For
example, if we sell a piece of machinery in a month and have a
huge gain, this has to be explained. We cannot assume this is a
normal state of affairs, because then our readers will think we
have higher income, when this is actually an extraordinary item.
Aug 27, 2014, 12:53 PM
The company I work for was de-listed several years ago due to
poor financial reporting by the parent company. It took many
years and expensive auditors to get re-listed. Since that time the
company has invested heavily in financial control and audit
procedures which everybody in the company is responsible for.
Even though this company actually did nothing wrong the lack
of confidence and the impact to revenue that came about as a
direct result was considerable.
Anna: WEEK TWO - DISCUSSION QUESTION # 1
posted by ANNA WEBB
Aug 26, 2014, 8:16 AM
Readers of financial statements require complete and

comprehensive information for analysis. A company with a high
quality of earnings will provide such. Factors that may affect
(reduce) quality of earnings include straying from generally
accepted accounting procedures, using pro forma earnings as
sustainable income to look good, and using improper
recognition by offering customers huge discounts to show good
earnings in one period yet results in lesser earnings in
subsequent periods. It is important to understand these factors
because managers may unknowingly violate SEC guidelines in
their efforts to make the numbers look good.
(2011). Accounting: Tools for business decision making(4th
Aug 26, 2014, 12:38 PM
High Quality of earnings defines a company that is fully
transparent and doesn't intentionally misguide others with their
dealings. This is important idea to understand because mush
like the other protective devices we have as investors, this is
another arrow in the quiver. The government cant protect us
from bad investing, but they can put resources in place to give
us the best and most accurate data.
This process can be affected by the type of accounting used at
the organization. The book discussed the difference between
FIFO and LIFO and how that one process could change results
by 26%. As an investor or employee accountant, these concepts
are important to understand and follow guidelines.
(2011). Accounting: Tools for business decision making(4th

Aug 26, 2014, 3:40 PM
High quality of earnings are the amount of earnings gained
based on higher product sales, or lower product costs, rather
than earnings gained from inflation.
Gains due to inflation = low quality
Gains due to increased sales or lower costs = high quality
This is important to understand because it gives a fair aspect of
the companies business, rather than looking good on paper due
to external forces. These earnings and their quality measures the
value of the company in the current as well as the future state of
performance.
Aug 28, 2014, 6:36 PM
Class,
I wonder how much inflation has to account for profits in
businesses. I can imagine that a business will use any profits as
a way to leverage success within the business. I think that
businesses should be held accountable for ensure they are
showing there profits in an appropriate way. I think that
inflation should never be used to help show business growth.

Jason Yorgensen
Aug 26, 2014, 9:40 PM
The definition of high quality of earnings is presenting users
clear and accurate information in the financial statements so
that they users are not confused or thinking that are being
mislead in any way. Investors and creditors wants information
that is reliable so a company needs to make sure that they do
not have information in the financial statement that in
questionable. If the investors and creditors think that the
information is not accurate then they will lose confident in the
financial statements and the company will lose capital.
Re: Response from Patricia
Aug 27, 2014, 2:27 AM
Patricia - very true; we have to be clear and thorough regarding
our data; so that decisions can be based on the real information.
If we inflate sales, for example, we may attract more investors
temporarily. However, we will lose them in the long run when
they realize this figure is not repeatable, and was artificially
inflated. Confidence from the public, banks and investors is
very important, and we want to keep this reputation for our
organization.

Aug 27, 2014, 8:34 PM
In any situation, if a person is honest they get respect and trust
from the listener because they were truthful even if they speak
of their flaws. A business is not always going to make a profit
so high that every creditor or investor would not even look at
the financial statements. A business earns respect and trust for
being honest. The only reason that a business would wise to be
dishonest is if they do not think that the creditors or investors
will not be impressed with their financial statements. As soon
as a business is caught being dishonest then the creditors and
investors will never want to do business with them again so why
take the risk.
Aug 28, 2014, 10:35 AM
Class,
I agree with you a lot of can be understood by a person when
talking to them. I also believe thst a lot can be understtod by a
businees from the CEO and other leaders within the
company.The business will take direction from the leadership.
There decisions will effect the people who get hired in the
company. Also it will effect how it operates on a smaller level
day to day. I believe that financial sheets are important but
knowing and understanding the leadership is also as important.
The last thing i would look into is customer feedback. This can
demonstrate how the message is being filtered from leadership
down.
Jason Yorgensen

Aug 27, 2014, 5:04 AM
I went to the SEC website and there is a tremendous amount of
information. I wanted to see what happens when High Quality
of Earning is broken and litigation takes place. If you go
to http://www.sec.gov/litigation/litreleases.shtml you can see
different cases and the outcomes. I read a few of the court
proceedings and was very interested on the details uncovered
during investigations.You should check out the SEC website if
you haven't yet. It was my first time there and very relevant to
what we are learning!
posted by TIFFANY MINGO
Aug 27, 2014, 2:33 PM
High quality of earnings for a company is when they provide
and keep financial records of processes that will affect the
overall revenue. In the book it states that the company is
transparent which means they have nothing to hide and provide
reliable and significant information about their business
practices. This is important because it helps them gain a good
reputation and potentially more business opportunities because
investors would likely be interested in such a trustworthy
company. It is also related to amount of earnings they make due
to cost and sales and not necessarily the market they are in.

Aug 27, 2014, 2:43 PM
Class,
High quality earnings are earnings that gained with the largest
possible margins. These earnings are typically achieved when
the sales of a product go up and the costs go down. To help
support these earnings a business will ensure there is
transparency within there calculation. This will show that a
business is thriving and it is continuing to grow. A business
can grow when earnings are not high quality. This growth can
be seen through inflation or if the good is linked to a market
that is growing. Many businesses want to have a business grow
through low costs and larger sales. This will allow the business
to gain money that will allow them to save for times that are
difficult.
Jason Yorgensen

Re FTA between US and IsraelIn taking this class, I decided t.docx

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