Butler Lumber Company Essay

Butler Lumber Company Essay
Butler Lumber Company
Background: Butler Lumber Company was founded in 1981, in a large city in the Pacific Northwest.
Typical products of the company included plywood, moldings, and sash and door products. After a
rapid growth in its business during recent years, the company in the spring of 1991 anticipated a
further substantial increase in sales. Despite good profits the company experienced a shortage in
cash and found it necessary to increase its bank borrowings.
Issues:
Butler Lumber Company is a profitable company. Why do they need external financing?
Butler Lumber Company is being offered a discount from its suppliers. Should they take the
discount?
Project their Income Statement and balance sheet for all of 1991. ... Show more content on
Helpwriting.net ...
This signals that although company is profitable but the retained earnings are not enough to fuel the
exponential growth of the company. Payable period increased from 35 days in 1989 to 45 days in
1990(Exhibit 2), which shows that the company is lagging behind the standard due date of 30 days.
This sole dependency on accounts payable for the uses of cash will make the situation worse.
Therefore for additional inventory and accounts receivable to sustain the growth company needs
external financing from the bank.
Also current ratio of the company during 1988–1990 (exhibit 3) indicates that liquidity position of
the company is deteriorating as ratio is falling from 1.80% in 1998, to 1.59% in 1989 and finally
reaching 1.45% in 1990. Similar trends are seen in the quick ratio as it has descended from 0.88% in
1988 to 0.67% in 1990 (exhibit 3). Days sales outstanding represent the number of day's sales
remains outstanding it has shown a substantial increase for 36.78 days in 1988 to 42.95 days in 1999
(exhibit 3), giving signals that the company is fueling its growth from cash crunch.
Hence to fuel their growth of 40%, the company needs external financing.
As noted above we decided that Butler Lumber Company should go for the discount.
In case of the company not going for the discount the pro forma income statements and balance
sheet of the company represent the following out come in the without discount scenario.
As we see in exhibit 1 in the income
... Get more on HelpWriting.net ...

Airbus
1. Income statement Molteni Motors Inc. recently reported $3.25 million of net income. Its EBIT
was $7.75 million, and its tax rate was 35%. What was its interest expense? Round your answer to
the nearest dollar. Enter your answer in dollars. For example, an answer of $1.2 million should be
entered as 1,200,000. $ 2. Corporate Tax Liability To complete the assignments listed below, refer to
the Table 2–1. The Talley Corporation had a taxable income of $300,000 from operations after all
operating costs but before (1) interest charges of $30,000, (2) dividends received of $18,000, (3)
dividends paid of $18,000, and (4) income taxes. What are the firm 's income tax liability and its
after–tax income? Round your answers to two ... Show more content on Helpwriting.net ...
IV. Because the payments are spread out over a longer time period, more interest must be paid on
the loan, which raises the amount of each payment. V. Because the payments are spread out over a
longer time period, more principal must be paid on the loan, which raises the amount of each
payment. 6. Free Cash Flows Rhodes Corporation: Income Statements for Year Ending December
31 (Millions of Dollars) 2013 2012 Sales $8,450.0 $6,500.0 Operating costs excluding depreciation
6,971.0 5,525.0 Depreciation and amortization 203.0 163.0 Earnings before interest and taxes
$1,276.0 $812.0 Less: Interest 182.0 140.0 Pre–tax income $1,094.0 $672.0 Taxes (40%) 437.6
268.8 Net income available to common stockholders $656.4 $403.2 Common dividends $591.0
$323.0 Rhodes Corporation: Balance Sheets as of December 31 (Millions of Dollars) 2013 2012
Assets Cash $86.0 $78.0 Short–term investments 43.0 33.0 Accounts receivable 894.0 715.0
Inventories 2,028.0 1,560.0 Total current assets $3,051.0 $2,386.0 Net plant and equipment 2,031.0
1,625.0 Total assets $5,082.0 $4,011.0 Liabilities and Equity Accounts payable $468.0 $390.0
Accruals 215.0 195.0 Notes payable 169.0 130.0 Total current liabilities $852.0 $715.0 Long–term
bonds 1,690.0 1,300.0 Total

New World Chemicals Inc
Case (2)
NEW WORLD CHEMICALS INC
Financial Forecasting
Sue Wilson, the new financial manager of New World Chemicals (NWC), a California producer of
specialized chemicals for use in fruit orchards, must prepare a financial forecast for 1998. NWC 's
1997 sales were $2 billion, and the marketing department is forecasting a 25 percent increase for
1998. Wilson thinks the company was operating at full capacity in 1997, but she is not sure about
this. The 1997 financial statements, plus some other data, are given in Table 1.
Assume that you were recently hired as Wilson 's assistant, and your first major task is to help her
develop the forecast. She asked you to begin by answering the following set of questions.
a. Assume (1) that NWC was ... Show more content on Helpwriting.net ...
As a part of your answer, show the growth rate in inventory that results from a 10 percent increase
in sales from a sales level of (a) $200 and (b) $2,000 based on both the actual regression line and a
hypothetical regression line which is linear and which goes through the origin.
How would changes in these items affect the AFN? (1) The dividend payout ratio, (2) the profit
margin, (3) the capital intensity ratio, and (4) if NWC begins buying from its suppliers on terms
which permit it to pay after 60 days rather than after 30 days. (Consider each item separately and
hold all other things constant.)
Table 1
Financial Statements and Other Data on NWC
(Million of Dollars) A. 1997 Balance Sheet
Cash and securities
$ 20
Accounts payable and accruals
$ 100
Accounts receivable
240
Notes payable
100
Inventory
240
Total current liabilities
$ 100
Total current assets
$ 500

Long–term debt
100
Net fixed assets
500
Common stock
500
Retained earnings
200
Total assets
$ 1,000
Total liabilities and equity
$ 1,000
B. 1997 Income Statement Sales
$2,000.00
Less: Variable costs
1,200.00
Fixed costs
700.00
Earnings before interest and taxes
$ 100.00
Interest
16.00
Earnings before taxes
$ 84.00
Taxes (40%)
33.60
Net income
$ 50.40
Dividends (30%)
15.12
Addition to retained earnings
$ 35.28
C. Key Ratios
NWC
INDUSTRY
COMMENT
Basic

Dell Case Study Dell Inventory Management
The case:
Dell systems started off as a producer and seller of high performance personal computers. It was a
direct seller who pioneered using a telephone hotline to sell products to its customers directly
Dell's inventory management:
Its production cycle began production of a computer after it received an order. This was a significant
departure of strategy from the competitior's strategy .
It maintained an inventory of components which it ordered on sales forecasts. This helped in
keeping the price of inventory down and also being up to date with the technology
Inventory costs are of different types:
'holding cost of inventory management' which includes both the capital cost of money tied in
inventory and the physical cost of holing ... Show more content on Helpwriting.net ...
For 48 days the money was stuck in the cycle which made cash flow constrained. With better
inventory management and change in focus to liquidity rather than exclusively growth and coming
back to direct selling they reduced their CCC by almost a week.
Now also lloking a the balance sheet the current ratio
Year Current Ratio
1996 2.08
1995 1.95
1994 1.94
The current ratio of the company has also remained consistent over the three years since it changed
its focus. The current ratio is at an ideal around 2.
A good current ratio states that the company can meet its short term liabilities with its short term
assets.This is a good indicatior of efficiency of Dell's operating cycle that is its ability to turn
product into

Chapter 5 Assinment Essay
Texas Rose Company Assignment – completely answer the following questions: 1. Tyler's total sales
forecast for the nursery's first full year of operations is 228,000 plants at an average sales price of $5
per plant. As a first approximation, assume that 30 percent of the firm's customers will pay 10 days
after the sale, 55 percent will pay on the 30th day, and 15 percent will pay on the 60th day. a) What
is the firm's projected days sales outstanding (DSO)? b) What is the projected average daily sales?
(Use a 360–day year.) c) What is Texas Rose's projected average receivables level? d) If Tyler is
estimating a gross profit margin, or contribution margin, of 40 percent, how much of the receivables
balance must actually ... Show more content on Helpwriting.net ...
The profit margin and the interest rate affect the dollar cost of receivable. 3. Refer to the monthly
sales forecasts given in the first Table. Assume that these amounts are realized and that the firm's
customers pay exactly as predicted. a) What would the receivables level be at the end of March and
at the end of June? b) What is the firm's forecasted average daily sales for the first three months of
operations? For the entire half–year? c) What is the implied DSO at the end of March? At the end of
June? What is the relationship between the DSO and the average collection period? d) Does the
DSO indicate that the firm's customers have changed their payment behavior from the first to second
quarter? Is DSO a good management tool in this situation? If not, why not? a. | Sales | 10days |
30days | 60days | Jan | 40000 | 12000 | 22000 | 6000 | Feb | 100000 | 30000 | 55000 | 15000 | Mar |
160000 | 48000 | 88000 | 24000 | Apr | 240000 | 72000 | 132000 | 36000 | May | 180000 | 54000 |
99000 | 27000 | June | 120000 | 36000 | 66000 | 18000 | The receivable level at end of March=
88000+15000+24000=127000 The receivable level at end of June=66000+27000+18000=111000 b.
(40000+100000+160000)/90=3333 (40000+100000+160000+240000+180000+120000)/180=4667
c. At the end of March DSO=127000/3333=38.1 At the end of June

Just for Feet Case
Just for Feet, Inc
Just For Feet, Inc. operates retail stores in the brand name athletic and outdoor footwear and apparel
market. Just for Feet was found in 1977 with the opening of a small mall based store and opened its
first super store in 1988. Because of their success and high sales volume generates by the large store
Company has concentrate primarily on develop and refining its superstore concept. As of January
1999, they operate 120 superstores, which 23 superstores opened in fiscal 1997 and 26 superstores
opened in fiscal 1998. Just for Feet plans to open 25 stores during fiscal year 1999 and 2000. In
1997, Just for Feet acquired Athletic Attic and Imperial Sports, which are now operated as the
specialty store division of the ... Show more content on Helpwriting.net ...
All this changes made the CFFO give negative results. The Account payable increased to $ 100,332.
All this accounts are making the difference in the cash flow. A/R has not had much money in its
account $15,840 for 1998 and $18,878 for 1999. Cash conversion period is use to analyze cash cycle
and it is an approach measure liquidity. Days inventory held is the number of days from receiving
the item until they actually sell it. Just for Feet held its inventory for 268.88 days in 1998 and 322.69
in 1999 between the receipt days an item until it was sold to the customer. Days of sales outstanding
average of days that it takes for customers to pay for merchandise. Just for Feet took 12.08 days to
pay for the merchandize in 1998 and 8.89 days in 1999, the day of sale outstanding average show
that just for feet has a strict policy on the payment of their product. Day pay outstanding is the days
between the inventory is received and when payments are made, Just for Feet took 66.74 days to pay
their outstanding in 1998 and 80.95 in 1999. Just for Feet is taking longer to pay their supplies.
Operation Cycle is an indicator of management performance efficiency, Just for Feet operation cycle
is $28,096 in 1998 and 331.58 in 1999.Cash operation cycle is the elapse between the firm's
payment for their inventory and

Supply Chain Management of Fmcg Companies
Supply Chain Management of FMCG industry
Group A2 Akshaya M Rajee–MBA10003 Eldho M Abraham –MBA10025 Lijo Jose–MBA10047
Ramya S–MBA10069 Sreeram C–MBA10093
3/9/2011
INTRODUCTION A Supply Chain is a network of facilities and distribution options that performs
the function of procurement of materials transformation of these materials into intermediate and
finished products and the distribution of these finished products to customers. It is the process used
by the companies to ensure that their supply chain is efficient and cost effective. It also basically a
collection steps which a company follows to transform raw materials into finished products the five
different stages are Plan Develop Make Deliver and Return Plan A plan or strategy ... Show more
content on Helpwriting.net ...
Higher ratio indicates that the company is able to replace its inventory at a faster rate and hence the
holding cost decreases. The number of inventory turns has decreased for Godrej and this is clearly
indicated by the increase in the total inventory of the company. The number has decreased for both
Emami and Dabur indicating both have improved their inventory management performance.
14 12 10 8 2010 6 4 2 0 Godrej Emami Dabur 2009
Number of inventory turns
Total inventory in days This ratio has increased for Godrej by 15.83 percent. This ratio has
decreased for both Emami and Dabur by 27 percent and 4 percent. This shows that Godrej has
inventory stocked up for more number of days before it reaches its customers.
Days of sales outstanding Days of sales outstanding has increased for all the companies under
analysis except Dabur for which the ratio has decreased by 2.3 percent. For Godrej and Emami, the
days of sales outstanding has increased by 1.94 percent and 5.27 percent respectively.
Days of payable outstanding Days of payable outstanding has increased for both Godrej and Dabur
by 25 percent and 17 percent, whereas for Emami, the ratio has decreased by 35 percent. The
decrease in the ratio of Emami is due to fact that Emami has reduced

walmart sears case
Case Questions: Sears, Roebuck and Co. vs. Wal–Mart Stores, Inc.
Answers must be posted to Compass. You may work in groups of no more than four people. Be sure
to remember to submit ALL names and UINs on the assignment.
1. How do the retailing strategies of Sears and Wal–Mart differ? How does each firm operate their
business/attempt to create value?
The major difference in these two companies' retailing strategies, according to their filings in
2014, lies in the ways they expand their sales. Wal–Mart realizes its sales by opening new retail
units both in the U.S. and abroad, broadening the scope of merchandise offered for sale, and
committing to price leadership. According to its annual report, it prices items at a low price ... Show
more content on Helpwriting.net ...
This requires a larger storage of inventory than grocery and entertainment goods, which Wal–Mart
sells mostly.
Besides, in preparation for the fourth quarter holiday season, Sears significantly increases its
merchandise inventory levels, which may have some effect on its reported inventory levels.
Apparently Wal–Mart is executing better because its cash conversion cycle is far smaller than
Sears.
4. How useful are financial ratios in evaluating the current performance of each of the two
companies? Are there any distortions in the comparisons?
Most financial ratios are useful in evaluating their performance, including days inventory
outstanding and days payable outstanding. However, since these two companies basically receive
cash upon transaction, their days sales outstanding are significantly low compared to companies in
other industries. Thus their receivable turnover ratios are less useful than other turnover ratios.
Besides, because their accounts receivable levels are low, some of their liquidity ratios are low. Wal–
Mart's and Sears' current ratios are 0.88 and 1.09. It appears that both companies have trouble
satisfying short–term obligations, which is not the case. Similarly, working capital creates
distortions in the evaluation of their performance as well.
5. How useful are financial ratios in comparing the relative performance of these two companies?
Are there any distortions in the comparisons?

Essay on Final Quiz Practice
–––––––––––––––––––––––––––––––––––––––––––––––––
Top of Form 1. A company receives a 10%, 90–day note for $1,500. The total interest due upon the
maturity date is: (Points : 1) | $37.50 | 2. A company receives a 6.2%, 60–day note for $9,650. The
total amount of cash due on the maturity date is: (Points : 1) | $9,749.72 | 3. The amount due on the
date of maturity for a $6,000, 60–day 8%, note receivable is: (Points : 1) | $6,080 | 4. Plant assets
are: (Points : 1) | Used in operations | 5. Once the estimated depreciation expense for an asset is
calculated: (Points : 1) | It may be revised based on new information | 6. When originally ... Show
A company paid $0.75 in cash dividends per share. It has an earnings per share of $3.50 and a
market price per share of $37.50. Its dividend yield equals: (Points : 1) | 2.0% | 21. The Discount on
Common Stock account reflects: (Points : 1) | The difference between the par value of stock and its
issue price when the issue price is below par value. stock | 22. A company has 1,000 shares of $50
par value, 4.5% cumulative and nonparticipating preferred stock and 10,000 shares of $10 par value
common stock outstanding. The company paid total cash dividends of $1,000 in its first year of
operation. The cash dividend that must be paid to preferred stockholders in the second year before
any dividend is paid to common stockholders is: (Points : 1) | $3,500 | 23. The price–earnings ratio
is calculated by dividing: (Points : 1) | Market value per share by earnings per share | 24. A
company's board of directors' votes to declare a total cash dividend of $25,000. The company has
2,500 shares of $1 par common stock and 400 shares of 4%, $200 par preferred stock outstanding.
What is the total amount that will be paid to preferred shareholders? (Points : 1) | $3,200 | 25.
Stockholders' equity consists of: (Points : 1) | Contributed capital and retained earnings | 26. The
appropriate section in the statement of cash flows for reporting the

Comparing The Financial Ratios And Statements From...
Introduction
The restaurant industry "operates restaurants and other eating places, including full–service
restaurants, quick–service restaurants, cafeterias, buffets, and snack bars" (Restaurants). The fast
food sector has a number of popular companies like McDonald's and Wendy's. Fast food chains earn
the majority of their success by offering quick, inexpensive meals made uniformly around the world
(Nath). This project will be focused on comparing the financial ratios and statements from
McDonald's (MCD) and Wendy's (WEN). The analysis will take an unbiased approach when
comparing the companies. The comprehensive analysis will include: the company's financial
statements, including the balance sheets, income statements, and statement of cash flows,
calculating the financial ratios, deciding which external factors could influence the company's
profits, and finally making a recommendation on which stock will have a positive effect on a
potential investor's portfolio.
Time Series Analysis
In this section we will analyze the financial ratios that have changed significantly over time. There
will be raw numbers provided in this section to show how the ratios have changed over the three–
year period being analyzed.
McDonald's
Profitability Ratios:
McDonald's return on common equity (ROCE) has decreased by 4% during the three–year period.
The ROCE measures the company's ability to generate profits from its shareholders' investments in
the company. The ROCE could have been

Colgate Palmolive Financial Analysis
COLGATE–PALMOLIVE ANALYSIS
Section I – Business Overview
Colgate–Palmolive is a leading consumer products company with businesses in two main product
segments – Oral, Personal and Home Care; and Pet Nutrition. The company operates in more than
200 countries and this geographic diversity and balance help to reduce the Company's exposure to
businesses and other risks in any one country or part of the world. The company's main competitors
are Proctor & Gamble (PG), Johnson & Johnson (JNJ), Church Dwight & Company
(CHD) and Clorox & Company (CLX).
Section II – Ratio Analysis
Return On Equity (ROE)
The ROE has declined for Colgate–Palmolive from 93% in 2008 to 72% in 2010. But the debt to
equity ratio has declined from ... Show more content on Helpwriting.net ...
Though current ratio does not take into account future sales and other cash inflows in future, the
declining trend might be a problem if it continues in the future.
Quick Ratio
The quick ratio reflects on a company's ability to meet its current liabilities without liquidating
inventories that could require markdowns. It is a more stringent test of liquidity than the current
ratio and may provide more insight into company liquidity in some cases. For Colgate–Palmolive,
the quick ratio has declined from 0.73 in 2008 to 0.58 in 2010. While this does not necessarily mean
a problem, a higher current ratio and quick ratio analysis will mean that the company will not have
difficulty in meeting its short–term obligations from its operations and not by liquidating its assets.
Section IV
Conclusions
The ratio analysis indicates mostly positive outlook for Colgate–Palmolive as most of the measures
look healthy. The ROE has reduced by increasing assets and reducing liabilities, the cash conversion
cycle has decreased and the days payables outstanding has increased.
But Dupont analysis indicates that profitability and efficiency have become lower. Additionally, the
working capital has become lower and the current and quick ratios have declined. To understand the
impact of these declining ratios on this company, the industry trend has to be analyzed to see if this
happening throughout

accounting review
A company had a beginning balance in retained earnings of $44,500. It had net income of $7,500
and paid out cash dividends of $6,000 in the current period. The ending balance in retained earnings
equals:
$13,500.
$6,000.
$58,000.
$46,000.
$43,000.
Shamrock Company had net income of $37,380. The weighted–average common shares outstanding
were 8,900. The company sold 3,900 shares before the end of the year. There were no other stock
transactions. The company's earnings per share is:
$2.92.
$9.58.
$4.20.
$7.48.
$5.36.
Shamrock Company had net income of $36,520. The weighted–average common shares outstanding
were 8,800. The company declared a $3,500 dividend on its noncumulative, nonparticipating
preferred stock. There ... Show more content on Helpwriting.net ...
The total amount of paid–in capital in excess of par is:
$100.
$1,100.

$2,000.
$11,000.
$13,000.
A company's board of directors votes to declare a cash dividend of $1.10 per share. The company
has 22,000 shares authorized, 17,000 issued, and 16,500 shares outstanding. The total amount of the
cash dividend is:
$18,150.
$24,200.
$23,200.
$36,850.
$18,700.
$1.10 × 16,500 shares = $18,150
A corporation declared and issued a 15% stock dividend on November 1. The following information
was available immediately prior to the dividend:
Retained earnings
$700,000
Shares issued and outstanding
55,000
Market value per share
$20
Par value per share
$5
The amount that contributed capital will increase (decrease) as a result of recording this stock
dividend is:
$(41,250).
$165,000.
$(165,000).
$0.
$41,250.
55,000 shares × 0.15 = 8,250 shares × $20 = $165,000
A corporation had 40,000 shares of $20 par value common stock outstanding on July 1. Later that
day the board of directors declared a 10% stock dividend when the market value of each share was

$24. The entry to record this dividend is:
Debit Retained Earnings $80,000; credit Common Stock Dividend Distributable $80,000.
No entry is made until the stock is issued.
Debit Retained Earnings $96,000; credit Common Stock Dividend Distributable $80,000; credit
Paid–In Capital in Excess of Par Value, Common Stock $16,000.
Debit Retained

The First Day Of Internship
Today was the first day of internship. I attended a new hire training secession about 8 hours and
heard about the history of Novogradac & Company LLP, met the partners of the firm, completed all
new hire paperwork and turned in to HR. In addition, I learned about ProSystem Engagement which
company has been using for audit and tax preparation software. At the end of the day, all intern
received a tour of office and met their own team members.
Jan 6: I took more comprehensive training for ProSystem Tax and ProSystem Engagement. The firm
also called ePace instead of ProSystem that is an electronic file room for all audit and tax
engagements of clients. I trained on the processes of synchronizing binder and learned to import trial
balance to ePace. At the end of the day, I watched the video about how to thrive in public accounting
and vision speech 2020.
Jan 7: I learned tax credit basics for low–income housing, historic rehabilitation, and renewable
energy in the morning. The second training session covered the basic steps of auditing and reviewed
tick marks. The firm also provided audit procedures to all intern how to review financial records of
clients and how to perform audit.
Jan 8: My manager gave me an individual training a whole day. She taught me to use ProSystem
Engagement and showed the sample final audit report. In addition, manager explained audit and tax
engagement letters and gave an overview of financial statements.
The second week from 11 January 2016 to

Study Guide
1. The form of organization for a business is not an important issue, as this decision has very little
effect on the income and wealth of the firm 's owners. B. False 2. The major advantage of a regular
partnership or a corporation as a form of business organization is the fact that both offer their
owners limited liability, whereas proprietorships do not. B. False 3. Which of the following
statements is CORRECT? A) One of the disadvantages of incorporating a business is that the
owners then become subject to liabilities in the event the firm goes bankrupt. B) Sole
proprietorships are subject to more regulations than corporations. C) In any type of partnership,
every partner has the same rights, privileges, and liability exposure as ... Show more content on
Helpwriting.net ...
9. You are analyzing the value of a potential investment by calculating the sum of the present values
of its expected cash flows. Which of the following would lower the calculated value of the
investment? A) The cash flows are in the form of a deferred annuity, and they total to $100,000. You
learn that the annuity lasts for only 5 rather than 10 years, hence that each payment is for $20,000
rather than for $10,000. B) The discount rate increases. C) The riskiness of the investment's cash
flows decreases. D) The total amount of cash flows remains the same, but more of the cash flows are
received in the earlier years and less are received in the later years. E) The discount rate decreases.
10. Which of the following statements is CORRECT? A) The cash flows for an ordinary (or
deferred) annuity all occur at the beginning of the periods. B) If a series of unequal cash flows
occurs at regular intervals, such as once a year, then the series is by definition an annuity. C) The
cash flows for an annuity due must all occur at the ends of the periods. D) The cash flows for an
annuity must all be equal, and they must occur at regular intervals, such as once a year or once a
month. E) If some cash flows occur at the beginning of the periods while others occur at the ends,
then we have what the textbook defines as a variable annuity. 11. Which of

Week 6 : Working Capital Simulation Exercise
Week 6: Working Capital Simulation Exercise
Alison Weinrib
FIN/571
November 24, 2014
Julio Jimenez
Week 6: Managing Growth
Nutracuticals is an online direct–to–consumer supplier of dietary supplements for women. The
company based in Miami, FL offers vitamin supplements from over 50 brand names/suppliers. This
firm is currently breaking even, and the decisions made over the next three phases of the business,
each three years spanning from 2013–2021, will dictate the firm's profitability. The decisions will be
based on financing options and resources (cash) available to the firm in each phase. Decision–
making will be based on the impact to the business metrics involved including: sales, EBIT, net
income (profit), free cash flow (FCF), and the total firm value. For the purpose managing
inventories, growth, and adding value to the firm, as CEO I have chose to exercise theses three
phase options, to follow.
Phase 1
First, the premise of phase one was to leverage supplier discounts. During this phase, SNC
established trade terms with India based supplier, Ayurveda Naturals. This new contract has a one
time 20% sales increase for SNC ($2M one–time revenue boost!). In addition, Ayurveda Naturals is
offering beneficial payment terms of 2/30 net 60. The numeric benefit to SNC is a decrease in
accounts payable by $153,000 (Working Capital Simulation: Managing Growth, 2014). These
payment terms offer SNC a 2% cash discount if tab is paid within 30 days; that's a 2% cash

Essay on Managerial Finance Final Exam
Which of the following is NOT normally regarded as being a barrier to hostile takeovers? (Points :
5) | Abnormally high executive compensation Targeted share repurchases Shareholder rights
provisions Restricted voting rights Poison pills | 2. (TCO F) Which of the following statements is
correct? (Points : 5) | The MIRR and NPV decision criteria can never conflict. The IRR method can
never be subject to the multiple IRR problem, while the MIRR method can be. One reason some
people prefer the MIRR to the regular IRR is that the MIRR is based on a generally more reasonable
reinvestment rate assumption. The higher the WACC, the shorter the discounted payback period. ...
Show more content on Helpwriting.net ...
34.0 b. 37.4 c. 41.2 d. 45.3 e. 49.8 (Points : 30) A; 34.0 DAYS CASH CONVERSION CYCLE =
(DAYS INVENTORY OUTSTANDING) + (DAYS SALES OUTSTANDING) – (DAYS PAYABLE
OUTSTANDING) CCC impact by inventory reduction (DAYS INVENTORY OUTSTANDING) =
(Average inventory / Cost of goods sold) * 365 Original (DAYS INVENTORY OUTSTANDING) =
($20,000/$80,000) *365 =91.25 days Revised (DAYS INVENTORY OUTSTANDING)=
($16,000/$80,000 *365) = 73 days –––––––––––––––––––– CCC by reduced accounts receivable
(DAYS PAYABLE OUTSTANDING) = (Accounts payable / Cost of goods sold) * 365 Original
(DAYS PAYABLE OUTSTANDING) = ($10,000/$80,000)*365 = 45.625 days Revised (DAYS
PAYABLE OUTSTANDING) = ($12,000/$80,000) *365 = 54.75 days ––––––––––––––––––––
CCC impact by increased a/c payable (DAYS SALES OUTSTANDING) = (Total receivables / Total
credit sales) * 365 Original (DAYS SALES OUTSTANDING) = ($16,000/$110,000 *365) = 53.09
days Revised (DAYS SALES OUTSTANDING) = ($14,000/$110,000 *365) = 46.45 days
–––––––––––––––––––– CCC = (DAYS INVENTORY OUTSTANDING) + (DAYS SALES
OUTSTANDING) – (DAYS PAYABLE OUTSTANDING) Original CCC = 91.25 + 53.09 – 45.63 =
98.71 days Revised CCC = 73 + 46.45 – 54.75 = 64.7 days Total impact = original CCC – Revised
CCC = 98.71 – 64.7 = 34.01 days CCC will be lowered by 34.0 days 2. (TCO C) Your company has
been offered credit terms of 4/30, net 90 days. What will be the nominal annual percentage cost of
its nonfree trade credit if it pays 120

Case Study Butler Lumber
Case Study: Capital Budgeting Butler Lumber Company Abstract Butler Lumber Company, a
lumber retailer with a rapid growth rate, is faced with the problem of cash flow shortage. In order to
support this profitable business, BLC needs a great amount of cash. The loan of $250,000 from
Suburban National and a line of credit of up to $465,000 from Northrop National Bank are the two
choices provided. After a brief review of the operation and financial conditions of BLC, we first
make analysis of the credit level of BLC from the perspective of banker. Although the feedback
from all the firms that had business dealings with Butler are quite positive , both solvency and
liquidity condition and the mortgage indicates that it is not a wise ... Show more content on
Helpwriting.net ...
The company's debt position shows that there was rapid increase in Butler Lumber's accounts and
notes payable in the recent past, especially in the spring of 1991. This kind of notable increase of
current liability should account for the increase mentioned above, which indicates the company's
great need of short–term funds. 1988 1989 1990 Debt Ratio 0.55 0.59 0.63 Leverage Ratio 1.2 1.42
1.68 Interest Coverage Ratio 3.85 3.05 2.61 2.1.2 Liquidity ratios Two–year decrease of liquidity
measures including current ratio and quick ratio reveals the problems concerning company's short–
term solvency and liquidity. Butler Lumber Company's current ratio decreased to 145.05% in 1990
from the level of 180.00% in 1988. The same decrease happened to quick ratio (decreased from
88.08% in 1988 to 66.92% in 1990). As the short–term lender, Northrop National Bank should have
noticed that Butler Lumber Company's ability to pay its bills over the short run without undue press
needs to be carefully examined. The decrease of current ratio also implies the decreasing level of
company's net working capital, which is another sign of lower level of liquidity. 2.1.3 Operating
management The days sales of inventory, days sales outstanding and days payable outstanding kept
similar over the past three years. Since we cannot get the industrial average level, we cannot
determine whether the level of Butler Lumber Company is reasonable. However, we can notice

Hickmann Case
Name ___________________ Hickman Avionic's actual sales and purchases for April and May are
Show here along with forecasted sales and purchases for June through September Sales $410,000
400000 380000 360000 390000 420000 Purchases 220000 210000 200000 250000 300000 220000
Case
Hickman
April (actual) May (actual) June (forecast) July(forecast) August(forecast) September (forecast)
The co makes 10% of sales for cash and 90% on credit. 2% of the credit sales are never collected
(this would be split in the same ratio as collections, 20% and 80%) Of credit sales, 20% are
collected month after sale, and 80% 2 months after sales Purchases are paid 40% in month after
purchase, and 60% 2 months later Note that a 2% discount is taken on ... Show more content on
Helpwriting.net ...
What is the accounts receivable balance on Sept 30 (include only net amount to be paid)? Total
Sales: $2,360,000.00 Total Reciept $1,671,896.00 Accounts Receivable balanc $688,104.00 e. What
are each the short term loan and marketable security balances on Sept 30? f. What is balance of
accounts payable on Sept 30 (include only net amount to be paid)? g. calculate DSO and DPO DSO
= Accounts Recievable / (total sales / 182 days) DSO = 688104 / (2360000 / 182) DSO = DPO =
Accounts Payable / (6 months payable / 182) DPO = 398240 / (1400000/ 182) DPO =
securities :
$ 35,608.00 Loans: $

Project on Chipotle and Red Robin
APPENDIX–A BALANCE SHEET ANALYSIS | | | Chipotle | 2011 | 2010 | Total liabilities |
381,082 | 310,732 | Total Shareholder 's Equity | 1,044,226 | 810,873 | Debt ratio | 27.70% | 26.73% |
Debt to Equity ratio | 0.34 | 0.001 | | | | Current asset | 501,192 | 406,221 | Current liabilities | 157,453
| 123,054 | Working capital | 343,739 | 282,554 | Current ratio | 3.3 | 3.18 | Acid test ratio | 0.55 | 0.26
| Red Robin | 2011 | 2010 | Total liablities | 298,278 | 278,596 | Total Shareholder 's Equity | 294,698
| 300,661 | Debt ratio | 50.30% | 48.10% | Debt to Equity ratio | 0.95 | 0.93 | | | | Current asset | 80,647
| 53,625 | Current liablities | 106,486 | 97,416 | Working capital | ... Show more content on
Helpwriting.net ...
31, 2011 | | Dec. 31, 2010 | | In Thousands, unless otherwise specified | | % | | % | Assets | | | | | Cash
and cash equivalents | $401,243 | 28.15 | $224,838 | 20.05 | Accounts receivable, net of allowance
for doubtful accounts of $208 and $102 as of December 31, 2011 and 2010, respectively | 8,389 |
0.58 | 5,658 | 0.5 | Inventory | 8,913 | 0.63 | 7,098 | 0.63 | Current deferred tax asset | 6,238 | 0.44 |
4,317 | 0.38 | Prepaid expenses and other current assets | 21,404 | 1.5 | 16,016 | 1.43 | Income tax
receivable | | | 23,528 | 2.1 | Investments | 55,005 | 0.04 | 124,766 | 11.12 | Total current assets |
501,192 | 35.16 | 406,221 | 36.21 | Leasehold improvements, property and equipment, net | 751,951 |
52.76 | 676,881 | 60.34 | Long term investments | 128,241 | 8.99 | | | Other assets | 21,985 | 1.54 |
16,564 | 1.48 | Goodwill | 21,939 | 9 | 21,939 | 1.96 | Total assets | 1,425,308 | 100% | 1,121,605 |
100% | Liabilities and shareholders ' equity | | | | | Accounts payable | 46,382 | 3.25 | 33,705 | 3 |
Accrued payroll and benefits | 60,241 | 4.23 | 50,336 | 4.49 | Accrued liabilities | 46,456 | 3.26 |
38,892 | 3.47 | Current portion of deemed landlord financing | 133 | 0.009 |

The Profitability Ratios Measure A Company 's Performance...
The profitability ratios measure a company's performance by the rate how profitable the corporate
on the basis of its revenue and invested capital. Various types of profitability ratios that calculated
by comparison of the balance sheet and income statement data are useful in relation to sales level
and investment. In this case, some ratios will be discussed for comparative performance.
The return on equity ratio (ROE) that compares net income to investment measures the how much
the business has earned on the book value of shareholders' equity. It can be compared across
different industries. A lower ROE presents a lower degree of risk. On average, Next's ROE is
extremely high at approximately 200%. It is almost ten times as M&S's of nearly ... Show more
The dividend payout ratio that compares dividends per share (DPS) to earnings per share (EPS)
explains how much money the company is returning to shareholders compared with that holds in
hand for further reinvestment. It is a productive tool for assessing a dividend 's sustainability. M&S
makes up an overall 25% higher percentage than Next in both financial year 2014 and 2015.
4.1.2. Asset Utilisation
In most companies, current assets, especially trade debtors and inventory, play an important role in
investment. They take up a massive portion of total assets. Efficiency ratios represent how
efficiently management is allocating assets.
Asset turnover is the most globally common way of asset utilization to reflect the relationship
between annual revenue and total assets. Asset turnover of Next appears to remain stable during the
last five years at the range from 1.8 to 1.9. M&S's ratio is lower than Next's, standing only between
1.28 and 1.36. Thus, M&S is more asset intensive than Next. Besides, both companies' indexes
show a downward trend in the recent three years.
Inventory turnover ratio compares the inventory with the volume of goods sold during a specific
period. The ratio that typically expressed in times per year demonstrates the speed with which
inventory is moving from receipt to final sale (Riggs, 2004). M&S expresses a persistent decline in
the last ten years from 13.49 times per year in the financial year 2006 to 7.7 times per year in

Jones Electric Distribution
Mr. Jones, A recent evaluation of Jones Electrical Distribution has occurred in request of a loan. An
assessment of the company's financial health shows that it is profitable. The shortage in cash flows
regards managerial attention. Since Jones opened in 1999 the company has seen rapid growth in a
highly competitive field. General contractors and electricians have preferred Jones for their
business. The request for this loan also has occurred at the end of March; past patterns show that
your company is seasonal, with most sales occurring in spring and summer months. Previously
stated facts estimate that sales will gradually increase. If managed properly Jones has potential to
develop, grow, and add additional sites in the future. ... Show more content on Helpwriting.net ...
After accepting a large loan of $350,000, the president of Jones Electrical Distribution, is going to
have to make cut backs and changes in everyday life. One area that we feel that you could improve
in is your purchasing of inventory. There seems to be a huge influx of additions to your inventory,
and based on the decrease in your inventory turnover ratio, the increase of inventory seems to be a
bit unnecessary. Looking at the financial statements we feel that you could improve your cash flows
by buying the appropriate amount of inventory. Although you are expected to continually grow, we
feel that if you purchased inventory in proportion to the growth that your company expects, it would
improve your inventory turnover rate. Doing this would help you be more profitable. Another area
of concern for us is your collections policy. We feel that if you enforced a more strict collections
policy that it would improve other areas of your finances. By the looks of it, it appears that the lack
of enforcement has deducted your available cash which has forced an inhibition of payment during
the discount period on your credit line. We feel that you need to take the necessary steps to collect
on your Accounts Receivables in a timely manner, so that you may take advantage of the discount
period. According to our calculations you are forgoing approximately $67,000 by capitalizing on the
discount period.

What Are The Advantages And Weaknesses Of The Minimum Cash...
You Make the Call
Swimming pool small business:
1–What are the advantages and weakness of the minimum cash balance practice?
Using a minimum–cash balance approach is a safe way for a business to make sure that it always
has a cash balance in reserve. It guarantees that the business will always have a certain amount of
cash asset to fall back on. This is a very limiting and unrealistic approach to managing a business'
working capital though. Cash is just one component of working capital. A business could be flush
with cash but have liabilities that exceed that balance and have a negative working capital balance.
A good business needs to think beyond a mental cash framework and think broader to include other
ramifications to the overall profitability and balance sheet stability.
2–There is a saying," if it isn't broke, don't fix it". In view of the firm's present success in paying
bills promptly, should it be encouraged to use a cash budget? Be prepared to support your answer.
The business has been profitable but has it managed its resources as well as it could have? That is
the real question here. While the business feels that it has done well and paid its bills timely doesn't
mean that that the way it handles things can't be improved upon. Incorporating some planning and a
possible use of a cash budget might allow the owner to have a better understanding of where and
how the resources of the company are being used and where they might be put to a better use given
better

New Heritage Doll Company Capital Budgeting
New Heritage Doll Company: Capital Budgeting Solution Sheet 1 NPV Analysis for Match My Doll
Clothing Line Extension 2010 2011 4 500 NA 2012 6 860 52,44% 2013 8 409 22,58% 2014 9 082
8,00% 2015 9 808 8,00% 2016 10 593 8,00% 2017 11 440 8,00% 2018 12 355 8,00% 2019 13 344
8,00% 2020 14 411 8,00% 0 1 250 1 250 575 2 035 152 2 762 1 155 3 917 575 3 404 152 4 131 1
735 5 866 587 4 291 152 5 029 2 102 7 132 598 4 669 152 5 419 2 270 7 690 610 5 078 164 5 853 2
452 8 305 622 5 521 178 6 321 2 648 8 969 635 6 000 192 6 827 2 860 9 687 648 6 519 207 7 373 3
089 10 462 660 7 079 224 7 963 3 336 11 299 674 7 685 242 ... Show more content on
Helpwriting.net ...
cost/ending inv.) Days Payable Outstanding (based on tot. op. exp.) 0 550 1 794 2 724 2 779 2 946 3
123 3 310 3 508 3 719 NA NA NA NA 3,0% 59,2x 12,2x 33,7x NA NA NA NA Capital
Expenditures 2011 0 4 610 Net Working Capital Accounts Cash (=as a % of Sales Revenue)
Accounts

Financial Analysis. Sprint-Nextel and Uralsvyazinform
[pic]
Financial Analysis. Sprint–Nextel and Uralsvyazinform
By
Alexander Bosch
Jorge Hernandez
Table of Contents
Sprint–Nextel. History and company overview...............................................................3
Uralsvyazinform . History and company overview.........................................................4
Sprint–Nextel. Common Size Balance Sheet...................................................................5
Uralsvyazinform. Common Size Balance Sheet.............................................................7
Sprint–Nextel. Common Size Income Statement............................................................8
Uralsvyazinform. Common Size Income ... Show more content on Helpwriting.net ...
Subscriber base exceeds 10.0 million: 3.7 million in fixed–line services, 5.7 million in mobile
services, 0.5 million in broadband services. By 2013, the company plans to increase subscriber bases
of local telephone services by 21,800 and this of broadband services by 34,800 subscribers. The
investment volume as of 2008 totaled RUR 9,980 million (growth on 40.4% from the level of
investment volume as of 2007.
1. Overall the company achieved better numbers in the 2009 financial statements. The liabilities and
operating expenses has been decreased, generated more net income and have more cash available. 2.
It has limited opportunities to grow, restricted by the regional constraints imposed by his parent
company Svyazinvest. 3. The company has B+ by Standard & Poor 's and Fitch Rating. That
indicates that material default risk is present, but a limited margin of safety remains. Financial
commitments are currently being met; however, capacity for continued payment is vulnerable to
deterioration in the business and economic environment.

Sprint–Nextel
Common Size Balance Sheet 2007, 2008, 2009
|Current assets | |2009 |2008 |2007 |
| | | | | |

Tire City Case
Backg Introduction Tire City, Inc is a growing distributor of tires in the Northeastern part of the
United States. Tire City, Inc is positioned in eastern Massachusetts, southern New Hampshire and
northern Connecticut. Tire City, Inc distributes its product through a chain of 10 stores and a central
warehouse outside Worcester, Massachusetts. In the past three years, Tire City has grown at an
annual compound rate of 20% which was attributed to its excellent reputation for service and
competitive pricing. Due to its growth, Tire City is currently at maximum capacity in its warehouse
and is considering expanding its current warehouse facility to accommodate service levels. Jack
Martin and Abeer Mandil are in the process of ... Show more content on Helpwriting.net ...
Cycle |79.99 |71.24 |76.82 | Asset management ratios are used to measure how effectively the
company is managing its assets. Tire City Inc inventory turnover declined from 6.47 in 1994 to 6.22
in 1995. The reason is the increasing inventory from 1994 to 1995 as a percentage of increased
sales. Therefore, days of Inv outstanding increased from 56.39 days in 1994 to 58.72 days in 1995.
Also, receivable turnover declined from 6.58 in 1994 to 6.44 in 1995 and accordingly days of
receivable outstanding increased from 55.50 days to 56.71 days. Tire City's payable turnover has
increased from 8.98 in 1994 to 9.45 in 1995 and accordingly days of payable outstanding decreased
from 40.65 days in 1994 to 38.61 days in 1995. The Company cash conversions cycle has increased
in 1995 to 76.82 days from 71.24 in 1994. In the other side, Tire City's has improved FA turnover; it
increased from 8.93 in 1994 to 9.65 in 1995. The company TA turnover has increased slightly from
2.60 in 1994 to 2.62 in 1995. The increased is due to the increased sales and increased planet and
equipment. Profitability |Profitability Ratios |1993 |1994 |1995 | |Profit margin |4.81% |4.90%
|5.06% | |Gross PM |41.90% |41.55%

Supply Chain Management of Fmcg Companies
Supply Chain Management of FMCG industry Group A2 Akshaya M Rajee–MBA10003 Eldho M
Abraham –MBA10025 Lijo Jose–MBA10047 Ramya S–MBA10069 Sreeram C–MBA10093
3/9/2011 INTRODUCTION A Supply Chain is a network of facilities and distribution options that
performs the function of procurement of materials transformation of these materials into
intermediate and finished products and the distribution of these finished products to customers. It is
the process used by the companies to ensure that their supply chain is efficient and cost effective. It
also basically a collection steps which a company follows to transform raw materials into finished
products the five different stages are Plan Develop Make Deliver and Return Plan A plan or ... Show
SAP has helped emami to achieve this. Improved Timeliness The SAP implementation is helping to
reduce the amount of time and effort it takes to full fill customer requests and transactions
Strengthens Relationships It increases the quality of customer interactions. Information is accurate
The system acts as a warehouse for information and helps to build accurate customer profile.
DABUR INDIA LIMITED Overview Dabur India Limited is a leading Indian consumer goods
company. The company was started as an Ayurvedic medicine company; it has come a long way
today to become one of the leading consumer products manufacturers in India. The company is
providing naturebased solutions for a healthy and holistic lifestyle. Supply Chain Process Dabur
went on to follow its own model in the supply chain department. It decided not to use a packaged
SCM solution due to the high cost and relative lack of complications in its supply chain. It
developed an in house easy–to–use Intranet based data–warehouse displays asof–yesterday sales,
stock, receivables, banking, and other MIS. The integrated system has a number of unique features.
The features are Tight integration schemes Stockists credit limit control Automated banking cheques
Online cheque reconciliation Dabur's stockists supply to 1.5 million retailers. Seventy percent of the
sales are accounted for by the top 500 stockists. The incorporation of these top stockists into its
supply chain is a first for any FMCG

Horniman Horticulture Essay
Horniman Horticulture Case Study
Current State of Business
The factors looked at such as the profit margin, ROE, and ROA do paint the picture that the current
state of the business is good. Revenues have increased on average 10% each year from 2002 to
2005. However during this time cash balances have decreased. Accounts receivable and inventory
have increased in the same time span. Cash has decreased from $120.1 to $9.4, a decline of 92%
over the four year time span. In the same period Accounts Receivable went from $90.6 in 2002 to
$146.4 in 2005, an increase of 62%. Likewise, inventory has increased from $468.3 to $656.9, an
increase of 40%. We do know that there are factors behind this increases and decreases, but has the
change ... Show more content on Helpwriting.net ...
This can be done by generating more revenues or by reducing operating costs. Increasing revenues
seems complicated in an industry that decreased revenues in 2004 by 1.8% and considering that HH
has been aggressively growing for the last years (12.5% in 2004 and 15.5% in 2005). One strategy
that can be pursued at this point is increase prices to improve the margins and decrease the number
of units sold. Although this seems like a good idea the move implies initially an investment in
additional inventory which at this moment and with the given business conditions doesn't seem
viable. Reduction in operating costs looks somehow complicated as well because it is stated in the
case that the business is running efficiently.
Another alternative that the Brown's have to manage HH current situation is to reduce the
receivables days. This seems doable since HH is way above the industry average, 48 days compared
to 21.8 for the industry in 2004. They can also reduce the inventory days in an effort to recover
some capital; this also seems like something that HH should be able to do as they have higher
inventory days than the benchmark, 436.5 versus 386.3 in 2004. The return on assets has been
growing on the past years and is high compared to the benchmark, this is saying that HH is being
more efficient every year in the use of assets; this also says that they might require higher capital
expenditures going forward.
The obvious alternative that the

Tire City Case
Backg Introduction Tire City, Inc is a growing distributor of tires in the Northeastern part of the
United States. Tire City, Inc is positioned in eastern Massachusetts, southern New Hampshire and
northern Connecticut. Tire City, Inc distributes its product through a chain of 10 stores and a central
warehouse outside Worcester, Massachusetts. In the past three years, Tire City has grown at an
annual compound rate of 20% which was attributed to its excellent reputation for service and
competitive pricing. Due to its growth, Tire City is currently at maximum capacity in its warehouse
and is considering expanding its current warehouse facility to accommodate service levels. Jack
Martin and Abeer Mandil are in the process of ... Show more content on Helpwriting.net ...
The reason is the expansion in the warehouse ($2,400,000) which increased fixed assets and the
AFN needed. Tire City's cash ratio increased in 1997 from 0 .22 in 1995 to 0.92 as cash was
increasing in 3% of sales. Working capital ratio increased slightly in 1997. Tire City Inc has
reasonable cash flow in 1997. Leverage |Leverage Ratios |1995 |1997 | |Debt ratio |44.17% |45.10% |
|TIE coverage |23.50 |28.25 | |L.T Debt ratio |0.13 |0.06 | |Debt/Equity ratio |0.79 |0.82 | |Equity
multiplier |1.79 |1.82 | Tire City Inc has increased its debt ratio from 44.17% in 1995 to 44.10% in
1997 by planning to take the bank loan for the additional fund needed. Also, Tire City time interest
earned coverage increased from 23.50 in 1995 to 28.25 in 1997. L.T Debt decreased slightly in 1997
than 1995 due to the decrease in the long term debt from $750,000 in 1995 to $500,000 in 1997.
Debut to equity ratio has increased slightly from 0.79 in 1995 to 0.82 in 1997. Asset Management
|Asset Mgmt Ratios |1995 |1997 | |Inventory Turnover |6.22

Issues And Objectives Of The Commercial Bank Of Ontario
Issues & Objectives is as follows:
As Jackie Patrick, loans officer for the Commercial Bank of Ontario, the key issue is whether or not
I will accept or reject Mackay's request for a bank loan and line of credit. My key objective is to
develop a thorough understanding of the facts presented in the case in order to make an informed
decision that will best serve the interest of the Commercial Bank of Ontario, myself as the newly
appointed loans officer, and of course my client Mr. Mackay.
As Mackay, the key issue(s) is, how will he continue to operate and pay off his outstanding debts in
addition to, what will happen to Lawsons should the loan and line of credit not be approved? If
approved how will he ensure (what plans are in place) that he will make good on his payments, both
to the bank and FWL.
As Mackay, the key objective(s) entail, securing a $194,000–bank loan in conjunction with a
$26,000 line of credit in efforts to reduce his trade debt and service his tight months of cash shortage
(Lawsons, 2013, p. 311) in order to avoid filing for bankruptcy and foreclose his business.
1. Ratio Analysis
Liquidity
Current ratio
Current ratio is as follows:
2013 2012 2011 2010
Current ratio 1.02:1 1.55:1 2.06:1 2.97:1
Lawsons 2010 and 2011 current ratio are above the industry average (1.8:1) however in 2012 the
current ratio falls below the industry average at 1.55:1 and than again in 2013 to 1.02:1. This
indicates that the company's ability to pay its debts is

Ac553
Chapter 3. Solution to 3–15 Joshua & White Technologies: December 31 Balance Sheets
(Thousands of Dollars) Assets 2010 2009 Cash and cash equivalents $21,000 $20,000 Short–term
investments 3,759 3,240 Accounts Receivable 52,500 48,000 Inventories 84,000 56,000 Total
current assets $161,259 $127,240 Net fixed assets 218,400 200,000 Total assets $379,659 $327,240
Liabilities and equity Accounts payable $33,600 $32,000 Accruals 12,600 12,000 Notes payable
19,929 6,480 Total current liabilities $66,129 $50,480 Long–term debt 67,662 58,320 Total
liabilities $133,791 $108,800 Common stock 183,793 178,440 ... Show more content on
Helpwriting.net ...
d. Perform an extended Du Pont analysis for Joshua & White for 2008 and 2009. ROE = PM x TA
Turnover x Equity Multiplier 2010 16.35% 9.57% 1.11 1.54 2009 15.80% 8.63% 1.22 1.50 The
Company had increased in ROE 15.80% to 16.35% when an extended Du Pont analysis is done. e.
Perform a common size analysis. What has happened to the composition (that is, percentage in each
category) of assets and liabilities? Common Size Balance Sheets Assets 2010 2009 Cash and cash
equivalents 5.5% 6.1% Short–term investments 1.0% 1.0% Accounts Receivable 13.8% 14.7%
Inventories 22.1% 17.1% Total current assets 42.5% 38.9% Net fixed assets 57.5% 61.1% Total
assets 100.0% 100.0% Liabilities and equity 2010 2009 Accounts payable 8.9% 9.8% Accruals 3.3%
3.7% Notes payable 5.2% 2.0% Total current liabilities 17.4% 15.4% Long–term debt 17.8% 17.8%
Total liabilities 35.2% 33.2% Common stock 48.4% 54.5% Retained Earnings 16.4% 12.2% Total
common equity 64.8% 66.8% Total liabilities and equity 100.0% 100.0% Common Size Income
Statements 2010 2009 Sales 100.0% 100.0% Expenses excluding depr. and amort. 78.0% 80.0%
EBITDA 22.0% 20.0% Depreciation and Amortization 4.7% 4.5% EBIT 17.3% 15.5% Interest
Expense 1.4%

Statement Of Cash Flow Analysis
Statement of Cash Flow Analysis After having analyzed the statement of cash flows from the 2011
and 2012 financial statements, it is clear that Tesu SZZ d.o.o. is inaccurately recording their assets,
liabilities, and shareholders equity. However, their financial stability is not the only issue at hand.
Their net income and net cash flow are both negative, therefore, it is clear that the product of this
statement will not have a positive outcome.
The statement of cash flows commences with a negative net income. That, in addition to the
increase in accounts receivables during the year, results in a negative cash flow from operating
activities. Although Tesu reduced their inventory by a significantly large amount, held back on their
... Show more content on Helpwriting.net ...
Financial Ratios Analysis In analyzing Tesu SSZ d.o.o., financial ratios were used as a tool to
examine their financial statements. The categories of liquidity, efficiency, solvency and profitability
were used, as seen in Exhibit 2. Although there are no industry averages to compare Tesu's financial
ratios against, the two years of data from 2011 and 2012 can be compared against each other to draw
conclusions about the current financial situation.
Liquidity
In order to understand how Tesu meets cash requirements quickly, it is necessary to review the
current ratio and quick ratio. The higher liquidity is generally better as it demonstrates that the
company can repay its lenders. As seen in Exhibit 2, the current ratio is positive. However, it is
decreasing from 2011 to 2012. Although the quick ratio increased slightly between the two years, it
is still not at an acceptable level. The company's liabilities are greater than their current assets due to
the high costs of accounts payable, which has resulted in the low ratio numbers. Currently, Tesu has
a significant sum of money owed in terms of unpaid wages and payroll taxes to the government. In
order to increase liquidity, the company must increase its current assets. Generally acceptable levels
for liquidity are 2.0+ for current ratio, and 1.0+ for quick ratio. As Tesu continues to grow in 2013,
their current liabilities will begin to go down as they collect outstanding

Accounting Study Notes
Review material
BUS 5502
Ch. 8, 10, 11, 12, 13, 14, 15, 18
Receivables:
1. The Allowance for uncollectible accounts currently has a credit balance of $900. After analyzing
the accounts in the accounts receivable subsidiary ledger, the company's management estimates that
uncollectible accounts will be $15,000. What will be the amount of uncollectible accounts expense
reported on the income statement? 1/11/2011 | Accounts Receivable | a | $ 900.00 | | | Sales revenue |
a | | $ 900.00 | | Uncollectable–Account expense | b | $ 15,000.00 | | | Allowance for uncollectible
accounts | b | | $ 15,000.00 | | | | | | | Balance Sheet: | | | | | Accounts Receivable | | $ 900.00 | | | ...
Show more content on Helpwriting.net ...
The company's management estimates that 2.5% of net credit sales will be uncollectible. Net credit
sales are $115,000. What will be the amount of uncollectible accounts expense reported on the
income statement?
115000 x .025 = 2875
200 – 2875 = 2675
The following information is from the 2009 records of Rawhide Leather Products.
Accounts Receivable, December 31, 2009 | $330,000 (debit) | Allowance for uncollectible accounts,
December 31, 2009prior to adjustment | 4,500 (credit) | Net credit sales for 2009 | 1,500,000 |
Accounts written off as uncollectible during 2009 | 25,500 | Cash sales during 2009 | 270,000 |
Uncollectible accounts expense is estimated by the aging–of–accounts–receivable method.
Management estimates that $35,000 of accounts receivable will be uncollectible. Which of the
following will be the amount of Uncollectible accounts expense? 35000 –4500 = 30,500
Liability:
A $20,000, 90–day, 8% note payable was issued on November 1, 2015. Using a 360–day year, what
is the amount of accrued interest on December 31, 2015?

20,000 x .08 x 61/360 = 271
Joe signs a $5000, 8%, 6–month note dated September 1, 2009. What is Joe's 2010 interest expense
for this note?
5000 x .008 x 2/12 = 6.67% ABC Company signed a 5–year note payable for $80,000 at 9% annual
interest. What is the interest expense for December 31, 2009 if the note was

Walmart vs Target Financial Analysis
FINANCIAL ACCOUNTING REPORT – TEAM 8 CASE ANALYSIS OF WAL–MART INC AND
TARGET CORPORATION SUBMITTED BY: Amaresh Chandra Panda K H Gupta Mehul Shah
SNDS Ramanish Sadhu Upasana Patra Table of Contents EXECUTIVE SUMMARY
....................................................................................................................... 2 RATIO ANALYSIS
................................................................................................................................ 2 PROFITABILITY
RATIOS....................................................................................................................... 2 NET
MARGIN ... Show more content on Helpwriting.net ...
RATIO ANALYSIS PROFITABILITY RATIOS NET MARGIN Net Margin is the ratio of net
profits to revenues of a company. It is used as an indicator of a company's ability to control its costs
and how much profit it makes for every dollar of revenue it generates. Net Margin is calculated
using the formula: Net Margin = (Net Profit / Revenues ) * 100 Net margins vary from company to
company with individual industries having typically expected ranges given similar constraints
within the industry. For example, a retail company might be expected to have low net margins while
a technology company could generate margins of 15–20% or more. Companies that increase their
net margins over time generally see their share price rise over time as well as the company is
increasing the rate at which it turns dollars earned into profits. 2 A snapshot of the Net Margins
for Wal–Mart Stores Inc. is shown below: Net Margin Wal–Mart 2010 3.90% 2011 3.50% 2012
3.60% Table 1 – Net Margins for Wal–Mart Inc. Wal–Mart Stores Inc.'s net profit margin
deteriorated marginally from 2010 to 2011 but then slightly improved from 2011 to 2012. Net
Margin Wal–Mart Target Industry Average 2010 3.90% 4.30% N.A 2011 3.50% 4.20% N.A 2012
3.60% 4.10% 3.3% Table 2 – Net Margins for Wal–Mart Inc. and Target Corp. The Net Margin's for
Target Corp. has also

Jones Electrical Distribution
Current Position
Jones Electrical Distribution (hereinafter Jones Electric) is currently facing an issue with cash flows,
which will ultimately affect the overall profitability and growth potential for the company. The
owner, Nelson Jones, is diligent in paying his suppliers within ten days in order to capitalize on a
two percent early pay discount, but in doing so, has over–extended cash flows. Though the company
has been profitable and growing over the past three years, its current lender, Metropolitan Bank, will
not increase a line of credit (LOC) beyond $250,000, a LOC upon which Jones has recently fully
drawn.
In order to ease the tensions of depleting cash reserves, Jones is seeking a higher LOC from another
lender, Southern Bank ... Show more content on Helpwriting.net ...
Either way, the cost of storing inventory could most likely be cut in half, but without knowing lead
times of suppliers, this is just a conjecture. Moreover, not only does the inventory sit in–house not
earning revenue for 65 days, but will take another 41 days to actually see the cash from customers.
This brings the operating cycle for the past four years to average 108.4 days and cash conversion
cycle to 91 days. This is obviously the reason for slow cash flows, which has ultimately led to the
current cash woes Jones Electrical is facing.
Thus, Jones now seeks more credit from SB&T. SB&T will only allow Jones Electrical to borrow up
to 75% of accounts receivable and 50% of inventory. As of the 1Q07 balance sheet snapshot, this
would only give Jones access to approximately $207,000, which does not even cover repayment of
the current LOC to Metropolitan Bank. Even with the cash on hand, Jones would be $11,000 short
of covering the $250,000 due to Metropolitan Bank, which is an agreement SB&T requires him to
severe. If the LOC is based on our forecasted numbers, AR of $318,000 and inventory of $456,000,
Jones would have access to much more cash from SB&T (approximately $466,000). This, of course,
assumes our assumptions are correct.
Moreover, the solvency ratios for Jones Electrical indicate a risky firm, hence the floating rate
offered by SB&T (prime plus 150 basis points). While the debt to asset ratio has improved
considerably

Satyam : India 's Biggest Corporate Scandal
Executive Summary Incorporated in 1987, Satyam Computer Services Limited (a foreign private
issuer) was India's fourth largest IT company that operated in 65 countries around the world,
including 9 offices in the United States. It had American Depository Shares traded on the New York
Stock Exchange during the fraud period (2003–2008) and changed its name to Sify Technologies
Limited in October 2007. Now, Satyam has a new senior management team consisting of members
formerly associated with Tech Mahindra Ltd and has replaced all board members that were in place
during the fraud period. Satyam's fraud is known as "India's Enron" because it was India's biggest
corporate scandal. Unlike Enron's agency problem, Satyam was brought down due to executives
"tunneling." Tunneling is the transfer of assets and profits out of firms for the benefit of those who
control them. The company had large cash assets, but promoters still controlled it with a small
percent of shares (less than 3%). Also, Satyam attempted to absorb a real–estate company in which
they had a majority stake. This was a deadly combination that pointed to tunneling. The Satyam
scandal highlights the importance of securities laws and corporate governance in emerging markets.
Background Information When analyzing Satyam's competitive environment, the first aspect we
considered was rivalry among existing firms. Satyam listed in their financial statements that their
main competitors included Bharti Airtel, Tata

Case 2 Essay
CASE 9: Horniman Horticulture
1. Assess the strengths and weaknesses of the company Horniman Horticulture.
– Horniman Horticulture has a variety of strengths and weaknesses, among them are a mix of
quantitative numbers to support the performance as well as qualitative factors to support the
performance. We should address the management to start with and their business philosophies. One
of the co–owners Bob Brown has a very strong work ethic, which he has achieved through his
fathers personal career path to become a foreman of a lumber mill in Southwest Virginia. Bob
followed his father's footsteps and was made supervisor at the lumber mill after his educational side
was achieved, among working as a supervisor he was highly ... Show more content on
Helpwriting.net ...
From these cash outflows, it is possible to say that Horniman business had been improved from
2002 to 2005.
3. What do you expect the financial position of the business to be in 2006? | | | | | | HORNIMAN
HORTICULTURE | | | | | | | | | | | | Projected Horniman Horticulture Financial Summary (in thousands
of dollars) | | | | | | | | | 2004 | 2005 | 2006 | Profit and loss statement | | | | Revenue | 908.2 | 1048.8 |
1311.0 | Cost of goods sold | 437.7 | 503.4 | 629.3 | Gross profit | 470.5 | 545.4 | 681.8 | SG&A
expense | 356.0 | 404.5 | 505.6 | Depreciation | 36.3 | 40.9 | 46.0 | Operating profit | 78.2 | 100.0 |
130.1 | Taxes | 26.2 | 39.2 | 51.0 | Net profit | 52.0 | 60.8 | 79.1 | | | | | Balance sheet | | | | Cash | 66.8 |
9.4 | –134.5 | Accounts receivable | 119.5 | 146.4 | 182.8 | Inventory | 523.4 | 656.9 | 821.1 | Other
current assets | 22.6 | 20.9 | 26.1 | Current assets | 732.3 | 833.6 | 895.6 | Net fixed assets | 384.3 |
347.9 | 376.9 | Total assets | 1116.6 | 1181.5 | 1272.5 | | | | | Accounts payable | 4.5 | 5.0 | 6.3 | Wages
payable | 22.1 | 24.4 | 30.5 | Other payables | 16.6 | 17.9 | 22.4 | Current liabilities | 43.2 | 47.3 | 59.2 |
Net worth | 1073.4 | 1134.2 | 1213.3 | | | | | Capital expenditure | 88.1 | 4.5

Tire City Case Study
Tire City, Inc. (TCI) was a rapidly growing retail distributor of automotive tires in Northeastern
United States. Tires were sold through a chain of 10 shops located throughout Eastern
Massachusetts, Southern New Hampshire and Northern Connecticut. These stores kept sufficient
inventory on hand to service immediate customer demand, but the bulk of Tire City's inventory was
managed at a central warehouse outside Worcester, Massachusetts. Individual stores could be easily
serviced by this warehouse, which could usually fill orders from individual stores within 24 hours.
TSI showed solid results for the year ended in December, 1995; TCI had sales of USD23.51m and
net income of USD1.19m. During the previous three years, sales had grown at a ... Show more
Activity ratios are used to measure the relative efficiency of a firm based on its use of its assets,
leverage or other balance sheet items. These ratios are important in determining whether a
company's management is doing a good enough job of generating revenues, cash, etc. from its
resources. | | 1993 | 1994 | 1995 | Activity Ratios | | | | | Asset Turnover | 2.47 | 2.60 | 2.62 | | Days of
Receivables | 57.24 | 55.50 | 56.71 | | Days of Inventory | 63.09 | 56.39 | 58.72 | | Days of Payables | |
39.95 | 37.64 |
Solid figures for FY1995 are again a positive sign for a progressing performance indicating TCI's
ability to generate revenues given its assets and resources which stems from successful and efficient
operations and management.
Analyzing the company's performance compared to its historical figures is always useful;
nevertheless, these historical figures can be also a very useful tool to forecast future ProForma
figures. We usually start by forecasting future sales (based on an average increase in sales figure)
and other balance sheet and income statement items are forecasted as percentage of sales, this
percent is normally consistent from historically figures. A close look should be given to the
company's operations and plan for the coming year while making our assumptions and forecasted
figures. Normally we should follow

Bus 320 Quiz 1 White Version 1 Essay
Bus 320: Quiz 1 Solutions
White Version
True/False Questions: Circle the correct response. (2 points each)
1.
T
F
If a sole proprietorship fails, the owner may lose whatever was invested in the business, but the
owner's personal assets are not at risk.
2.
T
F
A company that has an increase in its return on assets, but no noticeable change in asset turnover,
has most likely experienced an increase in financial leverage. 3.
T
F
If a firm is not operating at full capacity, assuming assets grow with sales will likely overstate the
firms funding needs.
4.
T
F

A firm with many growth opportunities would likely have a book value less than its market value.
5.
T
F
Joel (the owner) at Dave's Cosmic Subs decides to get a ... Show more content on Helpwriting.net ...
The addition to retained earnings was $12 million during the year, while book value of equity per
share at year–end was $40. If year–end total debt was $120 million, and no new common stock was
issued during the year, what was the company's year–end total debt ratio?
ARE per share = 8 – 2 = 6
a.
0.47
b.
0.54
Shares = 12/6 = 2 million shares
c.
0.57
TDR =
= 0.5660
d.
0.60
( )
e.
0.72
I meant "book value of equity" to be common equity (not
f.
0.75 including ARE), but it could mean total equity, in which case this
g.
0.87 is also ok
TDR =
( )
= 0.60
25. Highland Bakery maintains an inventory of flour worth $644. It has sales of $164,000 and a total
bill for flour over the course of the year of $16,744. How old on average is the flour in the bread it
sells its customers?
a.
b.
c.
d.

e.
f.
g.
14
16
18
20
22
24
26
days days days days days days days
Inv Turn = 16,744/644 = 26
DSI = 365/26 = 14.04
3
Bus 320: Quiz 1 Solutions
White Version
26.
(20 points) The managers of Icona Inc. have made the following predictions for 2014.
Sales will grow at a rate of 32% during 2014
Operating costs and cash balances will also grow with sales.
They would like to manage their inventory more efficiently by reducing day's sales in inventory to
180 (use a 360–day year for your calculation)
A purchase of $28,800 in new fixed assets are required to accomodate the growth in sales.
Accounts payable and

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