EXERCISE 8.12FIFO versus LIFO A Challenging AnalysisFord Moto.docx

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EXERCISE 8.12 FIFO versus LIFO: A Challenging Analysis Ford Motor Company uses FIFO and LIFO to account for different segments of its inventories. A note to the company's most recent financial statements indicated that if FIFO had been used for the entire inventory, the total amount of inventory would have been almost $1 billion higher ($8.3 million vs. $7.3 billion). Indicate whether each of the following financial measurements would have been higher, lower, or unaffected had Ford Motor Company used FIFO for its entire inventory. Explain the reasoning behind your answers. Gross profit rate. Reported net income. Current ratio ( Ford 's current ratio is greater than 1 to 1). Inventory turnover rate. Accounts receivable turnover rate. Cash payments made to suppliers. Net cash flow from operations ( Ford 's operating cash flows are positive). Provide your own assessment of whether using LIFO has made Ford Motor Company more or less (1) liquid and (2) well-off. Defend your answers. ...

EXERCISE 8.12FIFO versus LIFO A Challenging AnalysisFord Moto.docx

The Home Depot, Incorporated Selling, general, and Operating income 15,843 Analysis Case 4-2 Interest expense (1,201) Income tax expense Real World Income statement format; restructuring costs; earnings per share; comprehensive income; statement of cash flows; Ralph Lauren Ralph Lauren Corporation is a global leader in the design, marketing, and distribution of premium lifestyle products, including mens, womens and childrens apparel. Below are selected financial statements taken from a recent 10-K filing. RALPH LAUREN CORPORATION CONSOLIDATED STATEMENTS OF OPERATIONS (3,336.3) Interest expense Diluted Consolidated Statement of Earnings Year ended February 2, 2020 ($ in millions) 72,653 Cost of goods sold 19,740 administrative expenses share data) $ 6,159.8 (2,506.5) 3,653.3 Net revenues Cost of goods sold Gross profit Selling, general, and (3,237.5) administrative expenses Impairment of assets Restructuring and other charges Total other operating expenses, net 34.4 Operating income (7.4) Interest income Other income (expense), net Income before income taxes $ 384.3 Income tax benefit (provision) Net income RALPH LAUREN CORPORATION Net income per common share: Fiscal Year Ended March 28, 2020 (millions, except per CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME Fiscal Year Ended HOMEWORK CH 4 INCOME STATEMENT Analysis Case 4-1 Income statement information The following is the income statement of The Home Depot, Incorporated. Net sales $ 110,225 Gross profit 37,572 Depreciation and amortization 1,989 Interest and investment income 73 Income before income taxes 14,715 3,473 Net income $ 11,242 Required: 1. Is this income statement presented in the single-step or multiple-step format? 2. What is the companys approximate income tax rate? Note: Round your final answer to 1 decimal place. 3. What is the percentage of net income relative to net sales? Note: Round your final answer to 1 decimal place. SHOW YOUR COMPUTATIONS (67.2) (17.6) 326.4 Basic $ 5.07 $ 4.98 (31.6) 317.0 57.9 $ 384.3 Net income Other comprehensive income (loss), net of tax: (11.9) (2.2) Net (0.7) (14.8) Required: Use the information in the financial statements to answer the following questions. 1. Does the company use the single-step or multiple-step format to present its income statements? 2. Does the company report restructuring costs (yes/no)? If so, how much? Note: Enter your answer in millions. Round your answer to 1 decimal place. 3. Does the company report asset impairments (yes/no)? If so, how much? Note: Enter your answer in millions. Round your answer to 1 decimal place. 4. What amount does the company report for nonoperating income? Note: Enter your answer in millions. Round your answer to 1 decimal place. 5. Does the company choose to report comprehensive income in two consecutive statements or a combined statement? 7. What is the amount of comprehensive income? Note: Enter your answer in millions. Round your answer to 1 decimal place. SHOW YOUR COMPUTATIONS March 28,.

Inventories Most inventones owned by Deere -& company andits U-S- equi.pdf

saurabhmehramehra

Inventories Most inventones owned by Deere \& company andits U.S. equipment subsidiaries are valued at cost, on the "Fist-in, first-out (Lifo) basis, Remaining imentories are generally valued at the lower of cost, on the "first-in, first-out" (FIFO) basis, or market, The value of gross inventories on the LIFO basis represented 66 percent and 65 percent of worldwide gross inventories at Fifo value at October 31,2015 and 2014 , respectively. If all inventories had been valued on a Fifo basis. estimated inventories by major classification at October 31 in millions of dollars would have been as follows: This footnote reveals that not all of Deeres inventories are reported using the same inventory costing method (companies can use different imventory costing methods for different inventory pools) a. What amount does Deere report for inventories on its 2015 balance sheets? 1 million b. What would Deere have reperted as inventories on its 2015 balance sheet had the company used FiFO inventory costing for all of its inventories?s c. What cumulative effect has the use of Lifo inventory costing had, as of yeareend 2015, on Deere's pretax income compared with the pretax income it would have reported had it used FiFO inventory costing for all of its inventories? Deeres cumulative pretiox income has by 5 million since it adopted LIFO inventory costing: d. Assuming a-35\% income-tax rate, by what cumulative dollar amount has Deere's tax expense been affected by use of LIFO inventory costing as of year-end 2015 ? Has the use of Lifo inyentory costing increased or decreased Deere's cumulative tax expense? (Round answer to one decimal place.) Deere's cumulative income taxes were by 1 million as compared to the taxes that wouldve been paid under the FFO system. e. What effect has the use of LIFO inventory costing had on Deere's pretax income and tax expense for 2015 only (assume a 35% income tax rate)? (Riound answers to one decimal place. If applicable.) 2015 pretaxincome by 5 malion..

Follow up discussion response two paragraph Further the dialogue by .docx

alfred4lewis58146

Follow up discussion response two paragraph Further the dialogue by providing more information and clarification two reference Ford Motor Company reviews its statement and in many cases provides its quarterly report. The quarterly report helps executives, bankers, and investors to examine the financial statements of the company in detail. The quarterly comprehensive report that includes all of the company's financial information for the current year as well as previous years. The balance sheet is included in the report. The balance sheet is critical because it displays the company's assets, liabilities, and equity. It may show a two-year or longer comparison and detail revenue increases and decreases. The balance sheet is divided into three parts. The assets, liabilities, and equities are all listed here. The organization's financial capability is shown in all three sections. The Ford Company's balance sheet detailed the divisions of assets, liabilities, and equity. When insolvency happens, the balance sheet may assist in identifying when debts are due. A balance sheet will help determine if a person's liabilities have surpassed their available assets. The aim of these sections is to draw the reader's attention to the current state of working capital and the current ratio. The ratios are important pieces of financial data because they display the organization's financial patterns. The balance sheet is primarily used to assess a company's financial position. The balance sheet offers a brief snapshot of an organization's overall financial health as of a specific date. According to Ford's balance sheet, the total assets for their business are $259, 943 million. Ford has been financially secure and has healthy finance inside the group, while their overall liabilities are at comparing and updating the figures. $226,782 million, according to Ford's company's figures. The total assets are sufficient to cover the total liabilities. The balance sheet has been streamlined, and the common stock has increased slightly. Ford Motor Company used a strategy plan to keep working capital in place so that it could generate cash flow from its own operations. This balance sheet, which analyses Ford's current financial condition, provides a snapshot of useful information on current cash flows in and out of the business. An enterprise can show signs of high net value and can also handle some financial problems. Any breakdowns for long-term liabilities and current liabilities that signal a financial issue should be closely examined in each group. Long-term refers to an asset that is liquid for a year. Analyzing the balance sheet of Ford Motor Company from its annual 2020 report shows that its current assets, current liabilities, and equities have observed a positive trend over the year. By dividing the current asset by the current liabilities stated on the balance sheet, the ratio is a good current ratio. Ford's long-term solvency appears to be sufficient to .

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Running head: FINANCIAL MANAGEMENT DISCUSSION QUESTIONS 1 FINANCIAL MANAGEMENT DISCUSSION QUESTIONS 10 Financial Management Discussion Questions Gregory Finney Strayer University January 11, 2019 Financial Management Discussion Questions Stock Exchanges in the U.S The New York Stock Exchange (NYSE) and the National Association for Stock Dealers Automated (NASDAQ) are the two largest stock exchanges in the United States. Both of them deal with large volumes of stock exchanges daily. However, these two stock exchanges have some differences including operational differences, the size and number of listings and different perspectives. With regards to the size and number of listings, NYSE has at least 2,400 firms with a combined market capitalization of 21.3 trillion and home to blue chip firms like Ford Motors, General Electric and Walmart. Nasdaq, on the other hand, has more firms than NYSE with a market capitalization of $200 million and is also home to large tech firms like Apple, Facebook and Amazon. From operational perspective, NYSE is an auction market while Nasdaq is a dealer market. With regards to different perspective, investors consider NYSE as a stock market for the tried and true securities while Nasdaq is seen as a market for growth-oriented tech stocks (Desjardins, 2017). Free Cash Flow According to Brigham and Ehrhardt (2017), free cash flow is the amount of cash that a business generates, after accounting for the non-current capital assets investments. Mathematically; Free Cash Flow =Cash from operating activities-Capital expenditure Apple Incorporation’s Free Cash Flow An analysis of Apple Incorporation’s 2014 annual report indicates that the company’s cash flow from operations for the years ending September 28, 2014 and 2013 were $59,713 million and $53,666 million, respectively. Capital expenditures were $9,571 million and $8,165 million for the years ending 2014 and 2013, respectively (SEC, 2014a). Free Cash flow; For the year ending 2013; Free Cash Flow= $53,666-$8,165 =$45,501 million For the year ending 2014; Free cash flow =$59,713-$9,571 =$50,142 million Apple Incorporation had more cash inflows from its operating activities, because of its positive free cash flow, that could be spent on new capital investments. The increase in free cash flow from $45,501 million to $50,142 million between 2013 and 2014 is a sign of good financial performance. Ford Motors Corporation’s Free Cash Flow An analysis of Ford Motors Corporation’s 2014 annual report indicates that the company’s cash flow from operations for the years ending December 31, 2013 and 2014 were $10,444 million and $14,507 million, respectively. Capital expenditures were $ 6,597 million and $7,463 million for the years ending 2013 and 2014, respectively (SEC, 2014b). Free Cash flow; For the year ending 2013; Free Cas.

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BBA 3301 Unit V Assignment Instructions: Enter all answers directly in this worksheet. When you are finished, select Save As, and save this document using your last name and student ID as the file name. Upload the data sheet to Blackboard as a .doc, .docx or .rtf file when you are finished. Question 1. (30 points total) Use this balance sheet and income statement from Carver Enterprises to complete parts a and b: a. (15 points) Prepare a common size balance sheet for Carver Enterprises. Complete the common-size balance sheet: (Round to one decimal place.) Common−Size Balance Sheet 2013 Cash and marketable securities $ 490 % Accounts receivable 5,990 Inventories 9,550 Current assets $ 16,030 % Net property plant and equipment 17,030 Total assets $ 33,060 % Accounts payable $ 7,220 % Short−term debt 6,800 Current liabilities $ 14,020 % Long−term liabilities 7,010 Total liabilities $ 21,030 % Total owners’ equity 12,030 Total liabilities and owners’ equity $ 33,060 % b. (15 points) Prepare a common-size income statement for Carver Enterprises. Complete the common-size income statement: (Round to one decimal place.) Common−Size Income Statement 2013 Revenues $ 30,020 % Cost of goods sold (19,950) Gross profit $ 10,070 % Operating expenses (7,960) Net operating income $ 2,110 % Interest expense (940) Earnings before taxes $ 1,170 % Taxes (425) Net income $ 745 % Question 2. (10 points total) Use this data table of Campbell Industries liabilities and owners' equity to complete parts a and b. a. (5 points) What percentage of the firm's assets does the firm finance using debt (liabilities)? (Round to one decimal place.) b. (5 points) If Campbell were to purchase a new warehouse for $1.3 million and finance it entirely with long-term debt, what would be the firm's new debt ratio? (Round to one decimal place.) Question 3. (10 points total) (Liquidity analysis)Airspot Motors, Inc. has $2,433,200 in current assets and $869,000 in current liabilities. The company's managers want to increase the firm's inventory, which will be financed using short-term debt. How much can the firm increase its inventory without its current ratio falling below 2.1 (assuming all other assets and current liabilities remain constant)? (Round to one decimal place.) Question 4. (10 points total) (Efficiency analysis)Baryla Inc. manufactures high quality decorator lamps in a plant located in eastern Tennessee. Last year the firm had sales of $93 million and a gross profit margin of 45 percent. a. (5 points) How much inventory can Baryla hold and still maintain an inventory turnover ratio of at least 6.3 times? (Round to one decimal place.) b. (5 points) Currently, some of Baryla's inventory includes $2.3 million of outdated and damaged goods that simply remain in inventory and are not salable. What inventory ratio must the good inventory maintain in order to achieve an overall turnover ratio of at least 6.3 (including the ...

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DuPont System of Business Financial Analysis The DuPont system of analysis is used to dissect the firm’s financial statements and to assess its financial condition from three perspectives: Operations, Investment, and Financing. Developed by Dupont (major US chemical company) financial staff in the 1920s to enable management to gain a deeper understanding of how to raise the Return on Owners’ Equity (ROE) by better management of three key components of its business: Operational Efficiency: (Net Profit Margin) Asset Use Efficiency: (Total Asset Turnover), where TAT = Sales/Total Assets, and Financial Leverage (Debt) Management: (Financial) Leverage Multiplier = Assets/Total Equity = (1 + D/E), SOURCE: Ross, et al., Ch. 3 Copyright ©2015 Pearson Education, Inc. All rights reserved. 3-‹#› DuPont System of Business Financial Analysis USE of Dupont System: If ROE is unsatisfactory for some unspecified reason, then the Dupont Identity (see below) tells the analyst where to start searching for the reason(s) for the unsatisfactory ROE Dupont Identity: ROE = Profit Margin x Total Asset Turnover x Equity Multiplier Copyright ©2015 Pearson Education, Inc. All rights reserved. 3-‹#› Derivation of DuPont IDENTITY Both ROE (defined as Net Income/Equity) and ROA (Net Income/Total Assets) are measures of profitability. They differ because of debt financing (aka Financial Leverage) Thus, (1) ROE = ROA x Equity Multiplier. After some algebra, we obtain a more detailed version of (1): (2) ROE = Net Income/Sales x Sales/Assets x Assets/Total Equity. Substituting into (2) the definitions of key ratios, we obtain the Identity: (3) ROE = Profit Margin x Total Asset Turnover x Equity Multiplier NOTES: ROA = (Net Income/Sales) x (Sales/assets) Equity Multiplier = Assets/Total Equity = (D +E)/E) = (1 + D/E) Copyright ©2015 Pearson Education, Inc. All rights reserved. 3-‹#› Simplifying the Modified DuPont Formula We can simply the preceding formula by: 1) replacing the first two terms by the ROA ratio, since ROA = Net profit margin  Total asset turnover. 2) Thus, ROE = ROA x FLM. NOTE: The ROAssets belongs ENTIRELY to common stockholders. Hence, FLM is the equity “multiplier,” adjusting UPWARDS the ROEquity. 3) Recall, that we can reexpress ROA as follows: Copyright ©2015 Pearson Education, Inc. All rights reserved. 3-‹#› KEY FORMULA: Modified Dupont Formula ROE = (Net Profit/Sales) x (Sales/total Assets) x (Assets/(Assets – Liabilities)), or ROE = Net Profit Margin x Total Asset Turnover x FLM Interpretation: Operations: ROE can be improved by improving the profitability of operations (Net Profit Margin), e.g., improve production and sales efficiency by cutting costs and charging a premium price. Investment: ROE can be improved by more effective use of assets that generate sales (Total Asset Turnover). NOTE: The TAT ratio is a “multiplier”, telling us how many times the profit margin is EARNED EACH YEAR! Financing.

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Regardless of the size and nature, largely all businesses are dependent on leverage. This research called for analyzing the impact of leverage on equity elements like the earnings to price ratio, Market value of equity and book to market ratio. Later on we also tested to identify the relationship between leverage and on expected stock returns. Financial data for different companies ranging in their own sectors was collected and then financial data from 2002 to 2012 was used to run pooled regression in order to find out any existing relationship The results were pretty astonishing as it was proved that leverage had no impact on either of the equity elements. Nevertheless, a relationship could be identified between leverage and expected stock returns. Hence it will be safe to conclude that Pakistan’s economy is shortsighted and consumption oriented and that profits and earnings of companies in Pakistan are highly financed by their respective revenues. But nevertheless judgments about a particular sector couldn’t be made as this report has various business sectors of Pakistan.

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Corporate decision makers and analysts often use a technique called D.pdf

mohammed655285

Corporate decision makers and analysts often use a technique called DuPont analysis to understand and assess the factors that drive a company's financial performance, as measured by its return on equity (ROE). Depending on the version used, the Dupont equation will deconstruct the firm's ROE, its best measure of financial performance, into two or three important factors, or drivers. Dupont analysis can be conducted using either the traditional DuPont equation or the extended Dupont equation. The traditional equabion is constructed using two drivers, whereas the extended DuPont equation uses three variables to examine a firm's RoE performance. Complete the following sentences by entering the appropriate words or phrases. In the extended Dupont equation, a firm's ROE reflects (1) its use of debt financing, or leverage, as reflected by its (2) the efficiency with which it uses its assets, as measured by the and (3) its ability to generate sales and manage its production costs and operating expenses, as summarized by its In contrast, sometimes it is useful to focus just on asset profitability and financial leverage. In this case, you would use the traditional version of the equation, in which the firm's efficiency and profitability metrics are multiplied and summarzed in a single measure, the In this analysis, a company's financial performance is expected to result from both management's financing decisions and its effectiveness and efficiency in generating profits using the firm's asset base. Most investors and analysts in the financial community observe a firm's ROE closely. The ROE can be calculated by dividing the firm's net income by the sharehoiders' equity, or it can be reduced into the key factors that drive the ROE. Investors and analysts like to focus on these drivers to develop a more holistic image of what is changing within a company. An analyst collected the following fiscal year 2018 data for firms operating in the transportation, sector. Use the data to compute the net profit margin (NPM), total asset turnover (TAT), and equity multiplier (EM) values required for a DuPont analysis. (Note: Round your answers to two decimal places. The following dollar values are expressed in millions of U.S. dollars.) The following dollar values are expressed in millions of U.S. dollars.) Referring to this data, which of the following conclusions is true about the firms' ROEs? Firm A exchibits the lowest debt ratio among the three firms. Compared to firms A and B, firm C exhibits the worst job of managing its operating efficiency by reducing its costs and tax burden. Athough the three firms exhibit relatively similar efficiencies in managing its asset bases, firm C is marginally better in doing so. Firm B's ROE performance results from its ternble profitability and cost-containment performance despite its superior asset-management productivity performance..

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