Successfully reported this slideshow.
We use your LinkedIn profile and activity data to personalize ads and to show you more relevant ads. You can change your ad preferences anytime.

Fin 370 genius perfect education fin370genius.com

53 views

Published on

FOR MORE CLASSES VISIT
www.fin370genius.com
4-5 Multiyear Future Value How much would be in your savings account in 11 years after depositing $150 today if the bank pays 8 percent per year? Week 3 DQ 1
Due Tuesday, Day 2


Post your answer to Problem 3.5 on p. 109 (Ch. 3). How might the information contained within the stockholder equity statement be used for management and investor decision-making? Provide specific examples of situations in which the stockholder equity information might be used.

Published in: Education
  • Be the first to comment

  • Be the first to like this

Fin 370 genius perfect education fin370genius.com

  1. 1. FIN 370 Cash Flow Problem Sets (4-5,4-7,4-8,4-11,4-13) FOR MORE CLASSES VISIT www.fin370genius.com 4-5 Multiyear Future Value How much would be in your savings account in 11 years after depositing $150 today if the bank pays 8 percent per year? Week 3 DQ 1 Due Tuesday, Day 2 Post your answer to Problem 3.5 on p. 109 (Ch. 3). How might the information contained within the stockholder equity statement be used for management and investor decision-making? Provide specific examples of situations in which the stockholder equity information might be used. The statement of stockholders’ equity provides the changes in the equity accounts during the accounting period more in depth than the balance sheet. The information found on the statement of stockholders’ equity includes retained earnings, common and preferred stock, and additional paid in capital. Management uses the statement of stockholders’ equity to ensure they are reaching their goal of maximizing shareholder's equity. The use of market ratios help with the analysis of the statement of stockholders’ equity, such as earnings per share, price-to-earnings, dividend payout, and dividend yield. These ratios will help both management and investors in analyzing the company. For example, if I were looking to invest in a
  2. 2. company’s stocks I would utilize all of the financial ratios, as well as the market ratios. The earnings per share ratio is calculated before the price to earnings ratio, P/E, because the earnings per share ratio is used in the second. If a company pays dividends, the dividend payout ratio will come in handy. It tells us “The percentage of earnings paid to shareholders in dividends” (Investopedia, 2010, p. 1). References Investopedia. (2010). Dividend Payout Ratio. Retrieved August 3, 2010, from Investopedia:http://www.investopedia.com/terms/d/dividendpayoutrat io.asp Response 2 Explain what can be found on a statement of stockholders’ equity. The major elements of stockholders' equity include capital stock, paid-in capital, retained earnings, treasury stock, unrealized loss on long-term investments, and foreign currency translation gains and losses. How might the information contained within the stockholder equity statement be used for management and investor decision-making? Provide specific examples of situations in which the stockholder equity information might be used.
  3. 3. Management may look at the stockholder’s equity statement retained earnings section to determine if company should borrow money for capital investments or finance it through various forms of equity. It may also be used by the stockholder to evaluate the compensation paid to the company officers. Investors may also look at the statement for cumulative net unrealized gains and losses before purchasing stock in the company. Investors are also interested in the paid in capital because they can compare it to the additional paid in capital and the difference between the two values will equal the premium paid by investors over and above the par value of the shares. DQ 2 Week 3 DQ 2 Due Thursday, Day 4 Provide an example from the text or the Internet that demonstrates a situation in which a company’s net profits appeared good in the statements, but the gross or operating profits presented a different picture. Discuss how this might have occurred. Respond to the following question, addressed in Problem 3.6 on p. 109 (Ch. 3): “Why is the bottom-line figure, net income, not necessarily a good indicator
  4. 4. of a firm’s financial success?” Look for indicators like liquidity or solvency to answer this discussion question. An example that demonstrates the situation is Enron. Enron’s financial statements did not show all the expenses and costs. Instead of showing them on the income statement they made entries so the cost and expenses would post in the balance sheet. The same was done with the revenues. This way it would be less expenses and the net profit appeared good. Many debts and losses were not reported in the financial statements. From the third quarter of 2000 through the third quarter of 2001, the directors fraudulently used reserve accounts within Enron Wholesale to mask the extent and volatility of its windfall trading profits, particularly its profits from theCalifornia energy markets; avoid reporting large losses in other areas of its business; and preserve the earnings for use in later quarters. By early 2001, Enron Wholesale's undisclosed reserve accounts contained over $1 billion in earnings. The head of the company improperly used hundreds of millions of dollars of these reserves to ensure that analysts' expectations were met. In addition, Skilling and others improperly used the reserves to conceal hundreds of millions of dollars in losses within Enron's EES business unit from the investing public.This would show the creditors that Enron was making profits and its position was solid. The net income is not necessarily a good indicator of a firm’s financial success because the income statement only shows the profit or loss at a period of time and does not show the whole picture of the company. The Balance Sheet, Statement of cash flow, Statement of shareholders’ equity and the Income Statement all together give the
  5. 5. real picture of the business. Each one of them shows different aspects of the business. These statements show where the income is actually coming from; is it from sales or from loans the company is borrowing? If the company is selling a building or any other asset but that does not mean that it is selling more products and making profit. Looking at the Income Statements the company might be making profit but at the same time it is extremely leveraged. Response 2 A company’s net income is not the whole picture, just part of it. There are lots of things that contribute to the net income that may not be significative to the company’s success. If the value of a dollar has a sudden change that can affect the bottom line if the company happens to hold the medium of exchange that can benefit by the change that might occur. The company can falsely inflate the bottom line. A company’s net income is coupled with liabilities, cash flow, and selects financial ratios. Looking at it this way is a much better way of seeing what the company’s success is like. A company can change up many things to make it look like their income is better. These things that can be changed are single sales events, cash infusion, or false financial statements. Some things like debt that a company has, the company’s cash on hand, their capital assets conditions, or even their sales trends. To figure the success of the company, you must look at the whole picture. One thing cannot tell you all the facts of the company’s affairs. You cannot tell the net
  6. 6. income of the company just from the bottom line. Look at all the financial records. Response 3 Provide an example from the text or the Internet that demonstrates a situation in which a company’s net profits appeared good in the statements, but the gross or operating profits presented a different picture. Discuss how this might have occurred. Respond to the following question, addressed in Problem 3.6 on p. 109 (Ch. 3): “Why is the bottom-line figure, net income, not necessarily a good indicator of a firm’s financial success?” Look for indicators like liquidity or solvency to answer this discussion question. Net income is not necessarily a good indicator of a firm’s financial success because they have ways to manipulate it by increasing their revenues or hiding some of their expenses. For investors trying to decide where to invest their money, they need to look more into assessing how the company came up with the numbers they presented. An example of this situation is when Laribee Wire Manufacturing Co. exaggerated in recording their inventory value which allowed them in acquiring loans from six banks totaling to about $130 million using it as collateral. At the same time, they reported $3 million in net income for the period, but in actuality they lost $6.5 million. This company showed a higher net income by reporting fake inventory in which its value was overstated and transferred over to their income statement. When the banks assessed their financial statements, it was enough to sway them into lending the loans they
  7. 7. needed. Reference: Investopedia. (2010). Spotting Creative Accounting On The Balance Sheet. Retrieved fromhttp://www.investopedia.com/search/searchresults.aspx?q=Spott ing+Creative+Accounting+On+The+Balance+Sheet&submit=Searc h ----------------------------------------------------------- FIN 370 Final Exam Guide (New 2017) FOR MORE CLASSES VISIT www.fin370genius.com Which one of the following statements is correct concerning the cash cycle? Accepting a supplier’s discount for early payment decreases the cash cycle. Increasing the accounts payable period increases the cash cycle. Income statement is a financial statement that shows how much money is coming from product sales and services prior to any expenses being taken out. Both internal and external users such as managers and investors are able to access this. For example, if a investor wanted to see if the company made money or lost money they would use this financial statement report. Balance sheet shows what condition the company is currently in. whereas the other financial statements only came monthly or annually. For example, what if the management planning team wanted to see the company's current assets, ownership equity and liabilities? All they have to do is run the balance sheet report.
  8. 8. CVP income statement or Cost Volume statement reports or monitors the effects of the changes in cost and volume when it comes to the company profits. For example, I work at a manufacturing plant for roofing shingles. The CVP analyst studies the cost which includes but not limited too, manufacturing, material, labor cost. This financial statement report would help the management team budget the cost of manufacturing goods. Statement of cash flow tracks the movement of cash coming in or out of the business. This financial statement will show if the company made cash or not, or if the net income increased or decreased. For example, the owner or the management department will use this to determine if the company has earned enough money to be able to for any expenses. Retained earnings statements is a percentage that is kept by the company to be reinvested or to be used to pay debts. For example, if a company was looking to expand their business by purchasing top of the line equipment they can use this statement to see how much money the company has put away. References: http://www.investopedia.com/terms/r/retainedearnings.asphttp://finan cial- Retrieved 2/18/2010 statements.suite101.com/article.cfm/financial_statements_the_p_l. Retrieved 2/18/2010 ----------------------------------------------------------- FIN 370 Final Exam Guide (New) FOR MORE CLASSES VISIT
  9. 9. www.fin370genius.com Which financial statement reports the amounts of cash that the firm generated and distributed during a particular time period? statement of retained earnings Income statement Statement of cash flows Balance sheet Which of these provide a forum in which demanders of funds raise funds by issuing new financial instruments, such as stocks and bonds? Discussion Question 1: Post your response to the following: How would you describe the difference between financial and managerial accounting? What are the distinguishing features of managerial accounting? There are many differences between financial and managerial accounting. The financial accounting statements are available to external users such as employees, stockholders, creditors, investors, etc. This is available to them so that they can monitor the company's performances quarterly or annually. Managerial accounting provides financial information for managers and other internal people or department. Managerial accounting is confidential so it is only observed by internal users such as management, owner, and will provided to external users such as the public. Management uses this for budgeting purposes or to monitor profit loss/gain within the company. Managerial accounting can be available to them as often as needed. Managerial accounting statements is a great way for management to make decisions based on what has been reported. Another response The differences between managerial accounting and financial accounting are distinct. Managerial accounting reports are for those in managerial and decision making positions. The managers use the
  10. 10. financial report to answer questions, which would advance the company and its employees. The manager would want to know if certain investments should be made and should the company advance an employee's salary. The manager needs the report to decide if a factory is built or if a certain stock is brought. The financial accountant has the job of showing the external users such as creditors and stockholders a picture of the company's stability. The manager's purpose is to manage by making stable plans, delegate duties, motivate the workers, and control the atmosphere. Distinguishing features of managerial accounting are the fact no cpa will audit the report, and there is no specific frequency of the report. The reports are done in a need to know basis and for a specific reason, which is for business purposes. The reports are detailed and pertain to specific business decisions. The financial accountant need only be concerned with the company's finances. DQ2 Discussion Question 2: Post your response to the following: Select a management function (planning, directing and motivating, or controlling) and explain how that function relates to business as a whole. Next, select a different function listed by a classmate. Discuss with your classmate how the functions you each selected complement each other. The management functions that I choose was controlling. Controlling job is to make sure that the each department/person is keeping the company's activities or plans on track and in order to achieve that they must work closely with
  11. 11. Management planning function. Controlling continually compares the company's performance to make sure that the planned standards are being met. In my opinion this is known as the "dirty work". Controlling operations have to know what to look for and how to keep track of all the company's activities. They have to take actions and quickly correct any errors and make sure that the company goals are being achieved in a timely matter or the time that it was planned. If there are errors it is job of the controlling operations to take quick action. The controlling operations not only correct errors after it happens but they also are in charge of foreseeing any potential errors and act quickly to get that resolved. Another response I chose Controlling as part of the management function. The controlling function relates to business as a whole because it helps monitoring the firm’s performance to make sure the planned goals are being met. Managers need to pay attention to costs versus performance of the organization. let say, if the company has a goal of increasing sales by 10% over the next two months, the manager may check the progress toward the goal at the end of month one. If they are not reaching the goal the manager must decide what changes are needed to get back on track. ----------------------------------------------------------- FIN 370 Week 1 Calculating Ratios Worksheet (2 Set) FOR MORE CLASSES VISIT
  12. 12. www.fin370genius.com This Tutorial contains 2 Set of Answers FIN 370 Week 1 Calculating Ratios Worksheet 1. What is “agency theory?” How can setting the appropriate goals for the firm minimize the agency problem? Cost, Volume, and Profit Formulas By Kamilah Crooms Due February 28, 2010 Explain the components of cost-volume-profit analysis. The components of cost volume-profit analysis consist of Level or volume of activity, Unit Selling Price, Variable Cost per unit, total fixed costs, and Sales mix. What does each of the components mean?
  13. 13. Level or volume of activity is the activity that causes change or behavior when it comes to the cost. Unit selling Price is the cost for the product basically how much each unit is selling for. The Variable Cost per unit is something that can change depending on the activity. The total fixed cost does stay the same as activities change but differ per unit. The Sales mix is basically what the name says. It’s a mixture of sale items when more than one product sold the sales will remain the consistent. Based on the formulas you have reviewed, what happens to contribution margin per unit when unit selling prices increase? Contribution margin is the amount of revenue left over after subtracting the variable cost. So basically Unit sales price subtracting or minus variable cost. Illustrate your explanation with an example from a fictitious company of how an increase in unit selling prices might affect contribution margin. Kelly’s Sweetheart Flowers The owner of Kelly’s Sweetheart Flowers is selling their bouquet of flowers for $10 per unit. The Variable Cost per unit is $4.00. The contribution margin will be ($10-$4) = $6. If the sells price increases to say $15, then the contribution margin will be ($15-$6) = $9 per unit.
  14. 14. When fixed costs decrease, what does this do for sales? Illustrate your explanation with an example from a fictitious company. Kelly’s Sweetheart Flowers When the fixed cost decreases, the contribution margin ratio the net income and sales will increase. For example, The flowers are $10 per unit. The variable cost per unit is $4.00. The contribution margin will be ($10-$4) = $6. The fixed cost is $3. We subtract Contribution margin – Fixed Cost= Net income. The net income is $3.00. Define contribution ratios The contribution margin ratio is the contribution margin per unit margin divided by the unit selling price. What happens to contribution ratios as one of the components changes? Shown in the example above, if one or more of the components changes is will cause the net income to increase or decrease.
  15. 15. Reference statements.suite101.com/article.cfm/cost_volume_profits*the_p_l. Retrieved 2/28/2010 //http:yourdictionary.com /CVP.org Retrieved 2/26/2010 Thomas, Y. 2005-08-27 “Accounting 101 pg. 52 Statements ----------------------------------------------------------- FIN 370 Week 1 Calculating RatiosLake of Egypt Marina (3-29, 3-30) FOR MORE CLASSES VISIT www.fin370genius.com FIN 370 Week 1 Calculating Ratios Review the financial statements for Lake of Egypt Marina, Inc. Complete the following problem sets from Chapter 3 in Microsoft® Excel7 How should mixed costs be classified in CVP analysis? What approach is used to effect the appropriate classification?
  16. 16. According to our class materials all mixed cost must be classified into their fixed and variable and variable elements. The method that can be used to determine is called the high/low method. To determine the variable cost the analysis takes the total cost and divide it with the low activity level. To get the fixed cost then the company would have to subtract the total variable with either the high or low activity level. 9. Cost volume profit CVP analysis is based entirely on unit costs. Do you agree? Explain. In my opinion when it comes to making financial decisions for the company, often times more than one method is used. Cost volume profit is also based on Volume or level activities, unit selling prices, variable cost per unit, total fixed and sales mix. 14. You can find the break point in dollars by drawing a horizontal line to the vertical axis. I you want to find the break even point in units it will be a vertical line from the break even point to the horizontal axis. ----------------------------------------------------------- FIN 370 Week 1 Question and Problem Sets (Ch 1: Q 3,11 Ch 2: Q4,9, CH 3: Q4,7, Ch 4: Q 1,6) FOR MORE CLASSES VISIT www.fin370genius.com Purpose of Assignment Complete the following Questions and Problems (Concepts and Critical Thinking Questions for Ch. 1 Only)
  17. 17. from each chapter as indicated. Show all work and analysis. Prepare in Microsoft® Excel® or Word Axia College Material Appendix C Budgets Matrix Directions: Using the matrix, define each of the budgets listed and briefly describe its uses. Budget Definition Describe its uses Sales budget Estimate of the expected sales for the period. All of the other budgets depend on the sales budget. This is where all the other budgets will start from The sales budget shows dollars and units. This will allow management to see how many units will be produced for the period Production budget A production of units needed to be produced in order to meet the projected sales Shows management how many units will be produced during each budget period and what amount is needed to fulfill inventory demands Direct materials Is the estimated Shows management
  18. 18. budget quantity or cost of the raw materials that is needed in order to produce the units required to fulfill inventory how much raw materials that is already on hand and or that needs to be ordered to meet inventory demands. Direct labor budget A estimate of cost and quantity of direct labor needed in order to meet production Shows how many hours, how many laborers needed to produce the units for that budget period. Management will decide what will be the right amount of laborers needed and if the company will be able to meet the budget Manufacturing overhead budget An estimated expected amount of manufacturing cost for the budget period This list all overhead cost involving cash disbursement in a quarter Selling and administrative expense budget Anticipated selling and administrative expenses in the budget period Shows area of budget expenses that are not listed other than manufacturing. Expenses such as marketing, promotion cost etc
  19. 19. for the budget period Budgeted income statement Estimate of expected profitability of operations in a budget period Is a very important tool because it shows the company estimated profit for the budget period. Cash budget A projection of expected cash flows in and out of the business. Cash budget helps management keep a tally or total of all cash balances. ----------------------------------------------------------- FIN 370 Week 2 Cash Flow Problem Sets (5-1,5-3,5-5,5- 7,5-12,5-15,5-39) FOR MORE CLASSES VISIT www.fin370genius.com FIN 370 Week 2 Cash Flow Problem Sets Complete the following problem sets from Chapter 5 in Microsoft® Excel®: • 5-1 • 5-3 • 5-5 • 5-7 • 5-12 • 5-15 • 5-39 (Calculate monthly payment only) 5- 1FutureValue Compute the future value in year 9 of a $2,000 deposit
  20. 20. in year 1 and another $1,500 deposit at the end of year 3 using a 10 percent interest rate. Discussion Question 1: Post your response to the following: You know how important it is to create budgets for your household. How does budgeting help management make good business decisions? Budgeting is a very important skill that can be applied to everyday life and also when it comes to making good business decisions. I really like the way our class resources says about Budgeting. Budgeting is used as a planning tool used by management to make good decision for the company. If a company is successful than more than likely that means that the management team is very good at managing the company finances. Budgeting helps management plan ahead, defines what is most important, shows warning signs, reach a company target without over or under budgeting and etc. Another response In a business, a budget helps a business make good decisions because they are used by the company to plan for future events and coordinate the events and duties in the company. They also gives objectives used to evaluate the performance of the company on each level which can help to make future decisions that will not hurt the company based on the projected objectives. It can also be used to alert the company of possible problems or negative trends in the company that need to be addressed so that there is a clear picture of the overall health of the company before decisions are made. The budget helps the company to be able to make an informed decision when making one. It is there in order to make sure that making a
  21. 21. decision like taking on another company will not hurt the company and is something that the compnay can sustain based on the budget. DQ2 Discussion Question 2: Post your response to the following: What are some of the different types of budgets? Describe in detail one type of budget covered in the text. Describe what the budget is used for and what information it provides a business. Then, as you respond to your classmates, discuss how the budget you described relates to the budgets they described. Discuss how a business benefits from each of the budgets. There are many different types of budgetting. For example, there sales budget which allows management to see how many units that need to be produced, production budget which will allows everyone to see how many units are going to be produced in or needed to be produced in order to meet the inventory for that budget period. One budget that I can describe in detail is called the direct labor budget and this budget shows how many people, hours is needed in order to meet the required budget for that period. This will give management an idea of how much money is needed such as paying the cost of labor. The company benefits by each of these budgets because it will help manage just how much money it will cost the company during
  22. 22. this period. Management can also see if there are different ways to cost the company out of pocket cost down during this period. Another response I chose to write about the Production Budget. The Production Budget shows the cost of each unit needed to produce an item or manufacture a product. The formula used by the Production Budget : Budget sales units + Desired ending finished goods units - Beginning finished goods units = Required production units. An example would be, every Easter the bakeries in the Bronx loads up on Hot Cross Buns. My mother and grandmother would buy these tasty sweet breads,and eat them for breakfast. I personally would like to eat them every week but, they are only sold during the Easter season. Maybe, it has something to do with the glazed cross on the top. Every Easter Holiday, there appears these Hot Cross Buns and the bakeries production department allows for the purchases for items needed to make the buns. After Easter has gone, Hot Cross Buns are not included in the budget. ----------------------------------------------------------- FIN 370 Week 2 Financial Markets and Institutions Report (2 Papers) FOR MORE CLASSES VISIT
  23. 23. www.fin370genius.com This Tutorial contains 2 Papers FIN 370 Week 2 Financial Markets and Institutions Report Create a 1,050-word report, and include the following: What is a Flexible budget? A Flexible budget is a budget that change or is flexible during different levels or activity. Unlike the static budget which is a budget based on one activity level, the flexible budget is based off of more than one activity level. The steps to development a flexible budget is : a) Identify the activity index, and the range of activity b) Find out what the variable cost, and determine the variable cost per unit c) Find out what the fixed cost and determine the budgeted amount for each unit d) Organize the budget for selected additional activity within the appropriate range The information found on a flexible budget cannot begin with the master budget. The flexible budget uses the same guidelines the original budget. The budget consists of Sales, Cost of Goods Sold, Selling Expenses, General and Administrative Expenses, Income Taxes, and finally the Net Income. The information on the budget is a great tool to be used for evaluation performances. The flexible budget can be used for
  24. 24. monthly comparison purposes. Also during the process that management is identifying the activity index and the range of activity it will allow them to see the cost of direct labor hours for that budget period. ----------------------------------------------------------- FIN 370 Week 2 Question and Problem Sets (Ch 5: Q3,Q4 Ch 6: Q2, Q20, Ch 7 : Q3,Q11 Ch 8: Q1,Q6) FOR MORE CLASSES VISIT www.fin370genius.com Prepare in Microsoft® Excel® or Word. • Ch. 5: Questions 3 & 4 (Question and Problems section): Microsoft® Excel® templates provided for Problems 3 and 4 • • Ch. 6: Questions 2 & 20 (Questions and Problems section) Capstone Discussion Question: Post your response to the following: Think back over what you have studied and learned in this course. Do you have a new perception of or appreciation for the field of accounting and how it contributes to business? Explain. To be perfectly honest with you I truly had no clue what accounting did for a company and how important it was. I always thought that accounting only dealt with payroll. In fact accounting does much more that just payroll and monitor company supplies (coffee, paper, pens & pencils). The accounting sets budgets for the entire company, monitors outflow and inflow of profits, plans budgets for each department, and much more. When I first begun this class I was really nervous, I truly thought that I was going to have a hard time
  25. 25. understanding the accounting but I happy to say that I was wrong. I understood every part of this course. On a personal note I would like to thank you Jess. If it wasn't for your pep talk I probably would had gave up. You are truly a great instructor. I wish you all the best! God Bless Another response Accounting has taken a whole new meaning to me in my vocabulary. Prior to this course, I just took accounting as a calculator and crunching numbers. I now have a new respect for accounting and all the aspects that are involved. I never once took into consideration profit, sales, revenue, and balance sheets also being included with accounting. There is so much more involved with accounting, and had I not taken this course I would have never known. Accounting is a very important part of running a business. I feel that it is imperative to all people thinking of opening a business should take some type of accounting class to become more aware of how to run the accounting part of a business. ----------------------------------------------------------- FIN 370 Week 3 Assignment Financial Ratio analysis FOR MORE CLASSES VISIT www.fin370genius.com Purpose of Assignment Students should understand how to use the financial information and tools learned in the class on a public
  26. 26. company, obtain public company SEC reports, and use that data to calculate a company's financial ratios and their comparison to industry or competitor standards. Business Plan By Kamilah T. Crooms
  27. 27. The name of my business is called DestinyWear. DestinyWear is a urban fashion clothing company for woman, men and youth. DestinyWear specializes in making clothing for every occasion. My name is Kamilah Crooms and I am the owner and CEO of DestinyWear.My goal is to ensure that my company will be succesfull in all areas and in each department. In order for me to make sure that the company was going to begin in the right direction I had to priortize what was most important in establishing my business plan. The main priority is that I had to first choose the appropriate business structure, a high demanding product, and most of all an outstanding accounting team.
  28. 28. Business Structure Upon establishing DestinyWear I had to decide which business struture that I felt was best for me to pursue. I decided that as a Entreprenuer the best choice for me abd the direction of the company would be for me to be sole proprietorship. Sole proprietorship allowed me to be the sole owner of DestinyWear. The first and most important reason that I wanted sole proprietorship is because it is much easier to start a business as sole proprietorships. Sole proprietorship takes all the profit that and doesn't have to split it between any other owners or corporations. I also want the power to make and change decisions along the way without having to first consult anyone else. DestinyWear Products DestinyWear products will range from jeans, shirts, accessories and shoes. The company will first start off with its most profitable product and that will be the DestinyWear designer jeans line. The jeans line has over twenty different jeans designs
  29. 29. from straight leg, baggy, cargo, overalls, shorts and much more. The jeans line will provide services within the United States and Canada and will eventually service International customers. The DestinyWear jeans line will have its own building. In this building the bottom floor will consist of the factory and the top floor will have the different departments such as management, marketing and most importantly the accounting department. DestinyWear Accounting Department The accounting plays a major role in establishing my company DestinyWear. The accounting department does more than managing and reporting the company’s financial documents it is the greatest tool in establishing my business. The key to a powerful accounting department here at DestinyWear is applying the principles of internal control. These principles consist of establishment of responsibilities, segregation of responsibilities, documentation procedures, Physical, mechanical, and electronic controls, Independent internal verification and other controls such as Bonding of employees. In order to ensure that this business plan works DestinyWear has to hire nothing but the best qualified employees. DestinyWear Accounting Staff DestinyWear accounting team of fine employees will all be hired through the company. There are several requirements that have to be met in order for myself as the owner and Human Resource
  30. 30. department to even consider the applicant for accounting. We looked for characteristics, education and work history experience. The first and far most important qualifying requirements are education. The applicant has to have a Bachelor BA/BS in accounting degree a plus if he or she has a master’s. The second requirement is experience. The applicant must have the minimum of five years of experience working in accounting. He or She must have knowledge and employment experience of working with financial statements, cash management and internal control. Employees must be experienced in Invest idle cash, planning the timing of major expenditures, delay payment of liabilities keeping inventory levels low, and increasing the speed of collection on receivables. In the category of experience we had to hire applicants according to the position that had to be filled in accounting. For example, if a position in accounting such as management or supervisory needed to be filled, then we would look for years of experience in management or supervisory positions. I personally prefer that every employee have some type of management experience. Last but not least, the employees characteristics. It is a must that every accounting staff member has and applies professionalism, great ethic and moral skills, accuracy, and most importantly punctuality, and reaching company deadlines. These characteristics are very important to have at DestinyWear. DestinyWear Accounting Management Team The DestinyWear accounting management team will be reporting to me and to the other head staff each week to report updates and any new changes. The management team is responsible to have all the different types of budgeting reports that includes
  31. 31. Sales, Labor, etc. Management must follow the responsibility reporting system for each department. The managers will use the company’s financial information to predict outcomes of the business. I require a report from each responsibility center, cost center, profit center and investment center to be reported each month. Management is responsible to ensure that the company does not over or under budget and if any changes it must be reported immediately. Conclusion DestinyWear will be a very successful team not only because of the products that we produce but because of having a great accounting team. With the help of accounting team I DestinyWear products will be in every wardrobe in America. REFERENCES  //http:yourdictionary.com /CVP.org Retrieved 3/20/2010  Thomas, Y. 2005-08-27 “Accounting 101 pg. 52 Statements. March 19, 2010  Drucker, P. Managing in the next society 2002. retrieved march 19,2010  -----------------------------------------------------------
  32. 32. FIN 370 Week 3 Individual AssingmentRisk and Return Analysis Report (2 Papers) FOR MORE CLASSES VISIT www.fin370genius.com This tutorial contains 2 Papers FIN 370 Week 3 Risk and Return Analysis Create a 1,050-word report, and include the following: • Explain the relationship between risk and return Costco Wholesale Corporation If we look at the financial statements of the company we can find that the company is financially strong. Its strength are: 1. It has enough amount of current asset to repay its current liability. The current ratio of the company 8.18 indicates that the company has $8.18 liquid asset to repay its $1 of current liability. 2. The operating cost of the company is increasing because the company is able to reduce its expenses. 3. Cash from operating activity has increased for the company. Apart from this strength the company also has some weakness in its financial statement: (i) Increasing inventory indicates that the company inventory conversion period is increasing. (ii) The cash from investing activity shows that the company cash outflow is more in the short term investment i.e. in non operating activity. (iii) The overall has for the year 2008 has declined for the company.
  33. 33. Net Income: If we look at the trend in net income of the company we can find that the company net income looks fluctuating but it has improved it net income in 2008 as compared to 2007. Debt ratio as a percentage of total assets: If we look at the debt ratio as percent of total asset we can find that the debt ratio is declining in 2008 as compared to 2007 i.e. the company is increasing equity to finance debt. Debt as a percentage of total equity:
  34. 34. As we can see that the debt as percent of total equity is declining in 2008 as compared to 2007 i.e. the company is increasing equity in its capital structure. As we can see that there is nothing negative in 2008 for the company and this is the reason it has positive trend as compared to 2007. Hence there is no need to correct anything for the company. ----------------------------------------------------------- FIN 370 Week 3 Risk and Return Problem Sets (7-21,7- 27,8-19,8-21,9-33) FOR MORE CLASSES VISIT www.fin370genius.com FIN 370 Week 3 Risk and Return Problem Sets Complete the following problem sets from Chapter 7 in Microsoft® Excel®: • 7-21 • 7-27 Complete the following problem sets from Chapter 8 in Microsoft® Excel®: Week 1 DQ 1 Due Tuesday, Day 2
  35. 35. Go to the U.S. Securities and Exchange Commission’s Web site at http://www.sec.gov and the Financial Accounting Standards Board’s Web site athttp://www.fasb.org. Identify the mission and main activities of each organization. Then, analyze the similarities and differences between the roles of each entity. Which entity has more influence over financial statement reporting? Explain your answer. According to the SEC website their mission is to protect investors, maintain fair, orderly, and efficient markets, and facilitate capital formation. The SEC also requires public companies to disclose meaningful financial and other information to the public. This provides a common pool of knowledge for all investors to use to judge for themselves whether to buy, sell, or hold a particular security. The SEC is concerned primarily with promoting the disclosure of important market-related information, maintaining fair dealing, and protecting against fraud. According to the FASB website the mission of the FASB is to establish and improve standards of financial accounting and reporting that foster financial reporting by nongovernmental entities that provides decision-useful information to investors and other users of financial reports. Since 1973, the Financial Accounting Standards Board (FASB) has been the designated organization in the private sector for establishing standards of financial accounting that govern the preparation of financial reports by nongovernmental entities
  36. 36. The major difference in the SEC and the FASB is that the SEC deals with reporting of financial statements for all industries while the FASB deals mainly with the private nongovernmental entities. Both are concerned with the fairness of financial reports and work in the interest of the public. I believe that the SEC has more influence over financial statement reporting because they can bring civil action against companies and individuals for violations of securities laws. Although according to the FASB website, “the Commission’s policy has been to rely on the private sector for this function to the extent that the private sector demonstrates ability to fulfill the responsibility in the public interest. Response 2 Go to the U.S. Securities and Exchange Commission’s Web site at http://www.sec.gov and the Financial Accounting Standards Board’s Web site athttp://www.fasb.org. Identify the mission and main activities of each organization. Then, analyze the similarities and differences between the roles of each entity. Which entity has more influence over financial statement reporting? Explain your answer. U.S. Securities and Exchange Commission (SEC) According to the SEC’s website “The mission of the U.S. Securities and Exchange Commission is to protect investors, maintain fair, orderly, and efficient markets, and facilitate capital formation”(U.S. Securities and Exchange Commission, 2010, Para. 1). The main activities of the SEC are to interpret federal securities laws; issue new rules and amend existing rules; oversee the
  37. 37. inspection of securities firms, brokers, investment advisers, and ratings agencies; oversee private regulatory organizations in the securities, accounting, and auditing fields; and coordinate U.S. securities regulation with federal, state, and foreign authorities. (U.S. Securities and Exchange Commission, 2010) Financial Accounting Standards Board (FASB) According to the FASB’s website “The mission of the FASB is to establish and improve standards of financial accounting and reporting that foster financial reporting by nongovernmental entities that provides decision-useful information to investors and other users of financial reports. That mission is accomplished through a comprehensive and independent process that encourages broad participation, objectively considers all stakeholder views, and is subject to oversight by the Financial Accounting Foundation’s Board of Trustees” (Financial Accounting Standards Board, n.d., Para. 3). The main activities of the FASB are to identify financial reporting issues based on requests/recommendations from stakeholders or through other means. The FASB Chairman decides whether to add a project to the technical agenda, after consultation with FASB Members and others as appropriate, and subject to oversight by the Foundation's Board of Trustees. The Board deliberates at one or more public meetings the various reporting issues identified and analyzed by the staff. The Board issues an Exposure Draft to solicit broad stakeholder input. (In some projects, the Board may issue a Discussion Paper to obtain input in the early stages of a project) The Board holds a public roundtable meeting on the Exposure Draft, if necessary. The staff analyzes comment letters, public roundtable discussion, and any other information obtained through due process activities. The Board redeliberates the proposed provisions, carefully
  38. 38. considering the stakeholder input received, at one or more public meetings. The Board issues an Accounting Standards Update describing amendments to the Accounting Standards Codification (Financial Accounting Standards Board, n.d.). Both the SEC and the FASB have the same goals of fairness, accuracy, and understandability of financial accounting and reporting. Both agenecys accomplish these goals in the best interest of the overall public. The differences between the SEC and the FASB is that the FASB regulates financial reporting in the private sector of businesses (but are subject to the rules and regulations of the SEC) and the SEC deals with regulating the financial reporting of publicly held corporations. I believe that the SEC has the greatest influence over financial statements reporting because they have the final approval on all changes of the rules and regulations. The Sec can also bring civil or administrative enforcement actions against individuals and companies in violation of the securities laws. References Financial Accounting Standards Board. (n.d.). Facts about FASB. Retrieved July 15, 2010, from Financial Accounting Standards Board:http://www.fasb.org/facts/index.shtml#mission U.S. Securities and Exchange Commission. (2010, May 3). The Investors Advocate: How the SEC Protects Investors, Maintains Market Integrity, and Facilitates Capital Formation. Retrieved July 15, 2010, from U.S. Securities and Exchange Commission: http://www.sec.gov/about/whatwedo.shtml
  39. 39. Week 1 DQ 2 Due Thursday, Day 4 Search the Internet or the Online Library for information about the Sarbanes-Oxley Act. A useful guide to some of these provisions is located at http://www.soxlaw.com. Summarize at least two provisions of the law, and discuss your interpretation of these provisions with your classmates. Do you think this law will make financial statements more reliable? Also, discuss how Sarbanes-Oxley establishes boundaries to ensure ethical practices. What does the law allow or prohibit, and why? The Sarbanes-Oxley act has many provisions to give companies guidelines for responsible, and ethical financial reporting. One of those provisions is listed in Section 302 of the act. The provision is that periodic statutory financial reports be certified that signing officers have reviewed the reports, the report does not contain any untrue, or misleading information. The financial statements fairly present the financial condition. The signing officers are responsible for internal controls. A list of all deficiencies in internal controls, and
  40. 40. a list of fraud involving employees, and anything that could negatively affect the internal controls. Another provision pertains to the "management assessment of internal controls". This provision ensures that information is published in annual reports regarding the adequacy of internal controls, structure and procedures. The Sarbanes-Oxley act is designed to help companies promote ethical accounting procedures. The act gives guidelines as to how financial statements are reported. The act requires verification that officers within the company have checked the information in the reports for accuracy and true. The act also requires that the companies have internal controls in place to ensure ethical reporting practices. The main thing that the Sarbanes-Oxley promotes is transparency in reporting. Response 2 Section 802 of the Sarbanes-Oxley Law defines the penalties that may be assessed against individuals who failed to comply with the Act. An individual could be subject to 20 years in jail for altering, destroying, mutilating, concealing, falsifying records, documents or tangible objects. Guilt is define by the intent to impede a legal investigation. This part of the law gets to the heart of how Arthur Anderson reacted by destroying documents important to Worldcom. The law further defines that any accountant who knowingly violates their ethics by wilfully violates the requirements of maintenance of all audit or review papers. These papers are subject to review up to five years.
  41. 41. The second Section that I reviewed was the Section 302. This actually is my favorite part of the law because it directly holds the officers and directors accountable for the accuracy of reporting in their financial statements. It defines that the management must review and understand the financial statements and sign that they are true and accurate. It also holds the management accountable for the internal controls, requiring any deficiencies to be reported. In the past directors of companies relied heavily on the internal officers, management, to report the company performance without questioning the accuracy or taking their role on oversight committees seriously. They could hide behind a veil of trust of the key leaders. This Section clearly puts the responsibility for the Board to remain independent of the executives and function more effectively on the respective oversight committees they serve. The example I would share is what happened in WorldCom. The company leaders shared what they wanted to with the Board, who trusted implicitly the top leaders. Had they questioned their legal representation or auditors, they potentially could have uncovered the fraud that was committed by the creation of shell companies, with WorldCom employees as stockholders. I would love to think this law would protect the investing community. Financial reporting has improved to some extent. Unfortunately the scams still continue. Example would be Barney Madoff or what happened in the financial mortgage industry. These unethical practices were conducted after Sarbanes Oxley was implemented. Madoff was able to provide false financial information to investors. Financial industry was allowed to get to aggressive in underwriting and product suite. Fines and penalties are deterrents. Ethics still must be inherent in an individual and company. Laws and requirements are a guide. There will never be enough auditors,
  42. 42. inspectors or oversight boards to catch all of the fraud in the corporate community. The law prohibits falsifying information, failing to notify of material changes, and destruction of records. ----------------------------------------------------------- FIN 370 Week 3 Team Assignment Precision Machines Part 1 (annotated bibliography and excel calculation) FOR MORE CLASSES VISIT www.fin370genius.com This Tutorial contains both annonated bibliography and excel file FIN 370 Week 3 Team Assignment Precision Machines Part 1 Precision Machines is preparing a financial plan for the next six months to determine the financial needs of the company. Lucent Technologies Axia College of University of Phoenix
  43. 43. Lucent Technologies is a company based on networking for service providers, government, and enterprises worldwide (Lucent Technologies, n.d., Para 1). The products and services they work with are separated into three categories; service and maintenance, wireless mobility networking, and wire line networking. Lucent Technologies is backed by Bell Labs, which does research and development in networking technologies. During the years of 2001 to 2003 this company has experienced a decrease in demand because of other companies’ loss or capital used toward spending. This is mainly due to a downturn in the economy. As an investor this information is necessary to know because it explains the decrease or increase in sections of the balance sheet. In order to compare the growth or decline of the company’s profit, an investor must change a balance sheet into a common-size balance sheet. First when looking at the balance sheet an investor will see that the amount of paid in capital has increased from the year of 2003 to 2004, the assets have increased, but the liabilities have decreased. When running a debt/asset ratio it is noticed that this ratio drops from 1.2 in 2003 to 1.0 in 2004. This shows the company’s risk is low when concerning financial leverage, usually when the debt ratio is less than one percent it is financed mainly by company equity, so this company is close to being debt free from creditors. After changing the balance sheet to a common-size balance sheet there are several factors an investor will look at. The current assets have dropped to .48 from .49 in 2004. This does not show harm to the company because only the accounts receivable dropped while the rest of the current assets increased. This means the company is not in as much danger of default on money owed to it. It does have a rise in marketable securities. The one concern in the assets is the increase of
  44. 44. prepaid cost of pensions and goodwill. Goodwill can be used for tax breaks but prepaid pensions cannot benefit the company. When looking at the liabilities section an investor will see a drop in pension and liabilities and an increase in long term debt, both of these could be affected because of the drop in the economy. Long term liabilities are often increased to help a company control interest rate increases so as an investor cutting back on pension liabilities cuts back cost to the company and watching interest rate increase show the company is concerned with its earning and investors. This would be encouraging or an investor. The stockholders deficit shows a drop in accumulated deficits from -1.43 to -1.22 and total deficits of -.26 to -.08. This shows the company is working to control any money loss and turning it to the company’s advantage. Overall it shows the company is still earning a profit although small. With an increase of assets and a drop in liabilities the company is showing it is working in a low risk capital. After reviewing this information, a creditor or investor must be able to compare this company to the industry totals. By comparing how this company compares to other companies similar to it, a person can see if it is competitive and worth taking a risk. Running ratios will also show if the company is capable of paying off any debts it has or if it can acquire the needed cash in case of emergencies. Overall as an investor, I would say this company would be worth investing in.
  45. 45. Reference Axia College. (2007). Understanding Financial Statements. Retrieved May 10, 2010 from Axia College, Week 2 Assignment, ACC/230. ----------------------------------------------------------- FIN 370 Week 4 Cash Flow AnalysisFrank Smith Plumbing (calculation and 2 Papers) FOR MORE CLASSES VISIT www.fin370genius.com This tutorial includes both calculation and 2 Papers FIN 370 Week 4 Cash Flow Analysis Analyze the case study, “Frank Smith Plumbing.” Analyze the “Frank Smith Plumbing’s Financial Statement” spreadsheet Differentiating Depreciation Methods There is one main difference between straight line depreciation and accelerated depreciation. Straight line is decided by taking the cost of the assets, figuring out the salvage cost when the use of the asset is finished and how many years of use the asset has. A person then takes the cost minus salvage and divides the remainder by the number of years of use. This amount is the depreciation expense subtracted each year from the cost. The accelerated depreciation does not have the same amount of deprecation subtracted each year. It does have the cost minus salvage value to figure out the amount to
  46. 46. use but is then divided out differently. A person takes the sum of the years of a product’s useful life, such as three years is 3 + 2 + 1 = 6, then a person would divide the depreciation amount by 3/6 the first year, 2/6 the second and finally 1/6 for the final year. So the amount of depreciation expense is larger to smaller with accelerated and equal amounts for straight line. The advantages of straight line method are it is easier and faster to figure. The advantage of accelerated method is it is more accurate when figuring depreciation expense. The accelerated method has an advantage and disadvantage concerning taxes. A company can use the accelerated method to take advantage of bigger tax breaks at the beginning of an assets life, but since this amount drops during the lifespan if the company needs added tax breaks it will not receive them from these assets in the future. With the straight line method the amount of tax breaks are even through the life of the product. Most companies choose this form of depreciation for reporting purpose on taxes but will use the accelerated method to figure taxable income. As mentioned before the advantage of straight line depreciation is it is easier to figure and uses the same total each year for deduction of depreciation expense but the disadvantage is that if use for taxable income and reporting a company does not get a bigger tax break at the beginning of the assets life when they have just put out the cost for the item and may need a bigger tax break. ----------------------------------------------------------- FIN 370 Week 5 Team Assignment Precision Machines Part 2 (Cash Budget and Strategic Analysis)
  47. 47. FOR MORE CLASSES VISIT www.fin370genius.com FIN 370 Week 5 Precision Machines Part 2 Note: There are two parts to this learning team assignment; Part 1 was completed in Week 3. Review the “Precision Machines” document and spreadsheet. Preparing an Income Statement Coyote, Inc. Company Multi-Step Income Statement 200x 201x 202x Net Sales 1,833,000$ Cost of Goods Sold 1,072,000 Gross Profit 761,000 - - Selling and Administrative Expenses 454,000 Advertising Depreciation and Amortization 14,000 Repairs and Maintenance Operating Profit 293,000 - - Other Income (Expense) Interest Income 13,000 Interest Expense (16,000) Earnings Before Interest and Taxes 290,000 - - Income Taxes 116,000 Net Earnings 174,000$ -$ -$
  48. 48. The companies’ net income is profitable when the sales exceed the cost of goods sold. In this, the gross profit is $761k. This is beneficial to the company. Though we took the cost of goods away from the net sales there are still other areas which need to take a piece of the pie. For this company, once the SG&A and depreciation are taken out, the company still contains a profit of $290k. But the buck does not stop there. Once the interest income and interest expense are adjusted the balance before earnings and taxes is $290k. After taxes are taken out, the company is left with a net profit of $174k. In this case I think the company has achieved success with a net profit of $174k. If the company were unable to be profitable, the company would eventually go out of business. We would be able to tell if the company was not profitable by looking at each section individually. The cost of goods sold is what stands out for me. If we pay more to make the product then we are actually selling it for, there is no profit to be made. So, I think it should all start there.

×