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1.A proxy fight occurs when: the board of directors disagree on the members of the management team. 2. A stakeholder is any person or entity: 3.Which one of the following is least apt to help convince managers to work in the best interest of the stockholders? threat of a proxy fight pay raises based on length of service implementation of a stock option plan
This document provides information about purchasing a 3Com NB V35 TE product from Launch 3 Telecom. It describes the product, payment and shipping options, warranty, and additional services offered by Launch 3 Telecom such as repairs, maintenance contracts, de-installation, and recycling. Customers can purchase the product by phone, email, or online form and will receive order confirmation and tracking once purchased.
This document provides information about purchasing a 3Com 3CR990-TX-97 03-0182 10/100 PCI Ethernet card from Launch 3 Telecom. It describes how to purchase the card through phone, email or by sending a request for quote. It also details Launch 3 Telecom's payment and shipping options, warranty, available repair and installation services, and contact information.
This document provides information about purchasing a 3Com 3C201400A 8 Port 10Base-FL Module from Launch 3 Telecom. It describes the product, lists methods of payment including credit cards and purchase orders, and details same day shipping and tracking. It also outlines the warranty and return policy and additional services offered like repairs, maintenance contracts, de-installation, and recycling.
On Thursday 16th February 2017, lots of museum professionals and other oddbods (which I include myself in) met up to listen to speeches about the importance of providing different services and activities to those who are ageing into the 50 years+ group. Fascinating topics such as the role of dance for those living with Parkinson's, the statistics which states that the UK's population will be becoming older rather than younger, the use of collections beyond memory boxes and activities which focussed on how museums can work with communities in their area.
Please share the notes I have attached. I hopefully recorded the key points made by all of the presenters and which I hope, as with the presenters, you will use in your museum, company and organisation.
- O documento descreve planos odontológicos oferecidos pela Odonto System, incluindo coberturas, procedimentos, valores e formas de pagamento.
- Os planos PSE Resina e Executivo oferecem cobertura para procedimentos preventivos e clínicos, com diferentes níveis de coparticipação.
- Os valores variam entre R$23,90-R$40 dependendo da cidade, e o pagamento pode ser feito por cartão de crédito, débito ou boleto bancário.
El documento describe los requisitos que deben cumplir las entidades de formación para impartir especialidades incluidas en el Catálogo de Especialidades Formativas. Estos incluyen tener un proyecto formativo detallado, instalaciones y recursos adecuados, una plataforma de aprendizaje en línea, materiales completos para los alumnos, y una planificación para los formadores.
This document provides information on a variety of custom promotional items and graphic design services offered by Motrgrafx including: reward and gift cards, health awareness direct mail programs, outdoor signs and channel letters, floor graphics and wall decals, banners, self-pop ups, designs and renderings, paper signs, counter displays, brochures, boxes, self-shippers, pillow boxes, calendars, travel kits, engraved items, and sales kits. Motrgrafx offers full turnkey design, printing, and installation of custom graphics and promotional products.
El documento habla sobre los tipos de cooperativas. Explica que existen cooperativas de trabajo asociado o de producción de bienes y servicios, así como cooperativas de producción industrial, lácteas, de carpinterías, agrícolas, pesqueras y de servicios. También menciona las cooperativas de ahorro y crédito. Además, señala que las cooperativas tienen un fundamento legal en providencias administrativas.
This document provides information about purchasing a 3Com NB V35 TE product from Launch 3 Telecom. It describes the product, payment and shipping options, warranty, and additional services offered by Launch 3 Telecom such as repairs, maintenance contracts, de-installation, and recycling. Customers can purchase the product by phone, email, or online form and will receive order confirmation and tracking once purchased.
This document provides information about purchasing a 3Com 3CR990-TX-97 03-0182 10/100 PCI Ethernet card from Launch 3 Telecom. It describes how to purchase the card through phone, email or by sending a request for quote. It also details Launch 3 Telecom's payment and shipping options, warranty, available repair and installation services, and contact information.
This document provides information about purchasing a 3Com 3C201400A 8 Port 10Base-FL Module from Launch 3 Telecom. It describes the product, lists methods of payment including credit cards and purchase orders, and details same day shipping and tracking. It also outlines the warranty and return policy and additional services offered like repairs, maintenance contracts, de-installation, and recycling.
On Thursday 16th February 2017, lots of museum professionals and other oddbods (which I include myself in) met up to listen to speeches about the importance of providing different services and activities to those who are ageing into the 50 years+ group. Fascinating topics such as the role of dance for those living with Parkinson's, the statistics which states that the UK's population will be becoming older rather than younger, the use of collections beyond memory boxes and activities which focussed on how museums can work with communities in their area.
Please share the notes I have attached. I hopefully recorded the key points made by all of the presenters and which I hope, as with the presenters, you will use in your museum, company and organisation.
- O documento descreve planos odontológicos oferecidos pela Odonto System, incluindo coberturas, procedimentos, valores e formas de pagamento.
- Os planos PSE Resina e Executivo oferecem cobertura para procedimentos preventivos e clínicos, com diferentes níveis de coparticipação.
- Os valores variam entre R$23,90-R$40 dependendo da cidade, e o pagamento pode ser feito por cartão de crédito, débito ou boleto bancário.
El documento describe los requisitos que deben cumplir las entidades de formación para impartir especialidades incluidas en el Catálogo de Especialidades Formativas. Estos incluyen tener un proyecto formativo detallado, instalaciones y recursos adecuados, una plataforma de aprendizaje en línea, materiales completos para los alumnos, y una planificación para los formadores.
This document provides information on a variety of custom promotional items and graphic design services offered by Motrgrafx including: reward and gift cards, health awareness direct mail programs, outdoor signs and channel letters, floor graphics and wall decals, banners, self-pop ups, designs and renderings, paper signs, counter displays, brochures, boxes, self-shippers, pillow boxes, calendars, travel kits, engraved items, and sales kits. Motrgrafx offers full turnkey design, printing, and installation of custom graphics and promotional products.
El documento habla sobre los tipos de cooperativas. Explica que existen cooperativas de trabajo asociado o de producción de bienes y servicios, así como cooperativas de producción industrial, lácteas, de carpinterías, agrícolas, pesqueras y de servicios. También menciona las cooperativas de ahorro y crédito. Además, señala que las cooperativas tienen un fundamento legal en providencias administrativas.
FOR MORE CLASSES VISIT
www.acc291genius.com
ACC 291 is a online tutorial store we provides ACC 291 Entire Course And Final Guide You can find here
For Discussion Question 1: Post your response to the following:
• When reviewing a financial report, why should information be reliable, relevant, consistent, and comparable?
• In other words, why are these accounting characteristics important?
• What kinds of problems could be created if a financial report is not reliable, relevant, consistent, or comparable?
Acct 504 mart perfect education acct504mart.comstudent234511
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Case Study 1 (Part A)Analyze the impact of business transactions on accounts; record (journalize and post) transactions in the books; construct and use a trial balance) For Discussion Question 1: Post your response to the following:
• When reviewing a financial report, why should information be reliable, relevant, consistent, and comparable?
• In other words, why are these accounting characteristics important?
• What kinds of problems could be created if a financial report is not reliable, relevant, consistent, or comparable?
Fin 370 genius perfect education fin370genius.comstudent234511
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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? (LG4-3) 4-7 Compounding with Different Interest Rates For Discussion Question 1: Post your response to the following:
• When reviewing a financial report, why should information be reliable, relevant, consistent, and comparable?
• In other words, why are these accounting characteristics important?
• What kinds of problems could be created if a financial report is not reliable, relevant, consistent, or comparable?
Fin 571 genius perfect education fin571genius.comstudent1256789
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www.fin571genius.com
1.A proxy fight occurs when: the board of directors disagree on the members of the management team. 2. A stakeholder is any person or entity: 3.Which one of the following is least apt to help convince managers to work in the best interest of the stockholders? threat of a proxy fight pay raises based on length of service implementation of a stock option plan 4.Financial managers primarily create firm value by: maximizing current sales. investing in assets that generate cash in excess of their cost. 5.First City
FOR MORE CLASSES VISIT
www.acc291genius.com
ACC 291 is a online tutorial store we provides ACC 291 Entire Course And Final Guide You can find here.
Current assets
When it comes to a company's classified balance sheets you will find current assets sheet. Current assets is cash or cash equilivants that the company will use. What you will find on a current asset sheet is Cash and equilvants, Short term investments, Accounts receivables, and other assets.
Week 5ACC 290 Week 5 DQ1(What is the Control Environment).docx.docxmelbruce90096
Week 5/ACC 290 Week 5 DQ1(What is the Control Environment).docx
Week 5 DQ1
What is the control environment? How does the control environment affect a company’s internal controls? What are the negative and positive elements of a control environment? What are two examples of strong and weak internal controls in organizations where you have worked or have first-hand knowledge?
The control environment is the basis of the entire control system that the organization is establishing. The control environment is the value that is placed on integrity and the knowledge that unethical activity will not be tolerated. It is management’s responsibility to express behavior and attitude that enforces this ethical behavior. The control environment affects the internal control by setting a basis of control activities that safeguard assets, enhance accounting reliability, increase efficiency of operations, and compliance with laws and regulations. The negative elements of a control environment are that strict adherence must be applied continuously. Sometimes employees become overworked and underpaid and this is cause for concern because their level of carelessness goes up. Other times people might become slack in their duties over time. Some of the positive elements of a control environment are that responsibility does not lie on one person but many. Each part of a process requires several people to handle it therefore offering little opportunity to do wrong. Other positives are the process of that accountability is established and understood by each individual. An example of a weak internal control I witnessed was in a friend’s tanning bed business. The friend worked during the day and outlined how she expected her teenage employee’s to behave through policies and procedures. To my friends face the employees were the picture of a model employee but when she left in the evenings to go home and let them finish out the night the trouble would begin. The employees were letting all their friends tan for free, selling them tanning products and pocketing the cash. My friend finally put up a camera and goodness was she shocked at what was happening after she left for the evening. A strong control system that I have knowledge of is the system where I presently work. Our everyday policy is outlined in who does what – no procedure is ever fully completed by just one person. For example, my student employees run the registers, I prepare the deposit, another person drops off the deposit, and the final person reconciles the transactions. If I were to do another procedure then I would not be allowed to do the one I am doing now. It is just simply separation of duties so that one person does not hold all of the control or responsibility.
References
Kimmel, P. D., Weygandt, J. J., & Kieso, D. E. (2011). Financial accounting: Tools for businessdecision making (6th ed.). Hoboken, NJ: John Wiley & Sons.
Week 5/ACC 290 Week 5 DQ2 (Key Internal Controls ).docx
Week 5 DQ2
How wo.
This document discusses the importance of managing a company's cash to cash cycle. It defines the cash to cash cycle as the time between when a company spends money on supplies until it receives revenue from customers. Managing inventory, receivables, and payables can optimize this cycle. The document advocates using the Fortenberry Cash to Cash Method to improve financial health by shortening the cash to cash cycle. It also stresses the importance of leadership engagement and building a culture of continuous improvement throughout the supply chain and wider business.
Fin 571 genius perfect education fin571genius.comstudet1
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1.A proxy fight occurs when: the board of directors disagree on the members of the management team. For this week's checkpoint we had to look up three job postings in the field of accounting. I'm glad that I got this opportunity because it actually opened my eyes and expanded my knowledge in the accounting field. The three job positions are listed below. The first job title
Companies are Failing to Manage Debt Collection and Credit Terms #055K2Partners
The document discusses how many companies fail to properly manage debt collection and credit terms. It notes that companies risk insolvency by not actively managing late payments or bad debts. It also says that extending credit without credit checks can lead to taking on bad risks. The document provides recommendations for improving credit management, such as performing credit checks on new customers, regularly reviewing credit levels, and having robust invoicing and debt collection procedures.
The document discusses potential abuses of power and breaches of fiduciary duty by the management of DESB. Specifically, the controlling directors, EnZayed and PnHashimah, tried to pressure the auditor to not qualify the financial statements and planned to appoint a "friendly" auditor. They also charged personal expenses to the company and withdrew company money without documentation. The directors showed a lack of familiarity with accounting standards and their roles/duties under the Companies Act of 1965. Additionally, they wanted to remove the existing auditor before the end of their term without following proper procedures. In summary, the document analyzes whether the management of DESB abused their power or breached their fiduciary duties to the company and
The document provides an overview of accrual accounting. It defines accrual accounting as requiring transactions to be recorded when they occur rather than when cash is received or spent. The advantages of accrual accounting include compliance with GAAP, increased transparency through reflecting future cash flows, and better strategic planning. The disadvantages include complexity, difficulty switching methods, and potential vulnerability to fraud. The document also discusses accounting transactions, balances, assets, liabilities, double-entry bookkeeping, and the fundamental accounting equation.
22 Things to do to improve your credit controlPaula Bolton
Do you have difficulties getting paid on time by your customers? Do you hear endless excuses of why they have not paid you? Have customers dissolved their business, whilst still owing you money?
If so, read our guide on 22 ways to improve your credit control and business processes. Not all these points may apply to all businesses, but most of them will.
Over the next 22 days implement any points to improve your efficiency of getting paid and how you run your business.
For the full guide visit: https://www.fjcm.co.uk/credit-control/22-ways-to-improve-your-credit-control/
CRO (Chief Risk Office and its responsibility)Komal310425
The document discusses the role and responsibilities of a Chief Risk Officer (CRO). The CRO is responsible for identifying, analyzing, and mitigating risks across the organization. This includes ensuring compliance with regulations, overseeing internal audits, developing risk management policies, assessing operational and reputational risks, and creating strategies to minimize risks. The CRO must also address emerging risks like cybersecurity threats and data protection issues. When evaluating vendors, organizations should thoroughly assess their financial health, business credibility, background of founders/management, and conduct an overall due diligence check using documentation like financial statements, legal records, and tax documents. This helps determine the vendor's ability to meet contractual obligations and mitigate risk.
Clarisent describes how you can prevent business theft. When it comes to protecting your own enterprise from wrongdoing, it’s wise to go the extra mile, leaving no room for error.
This document provides information on managing cash flow for a business. It discusses the key activities of a business - production, marketing, and accounting. It emphasizes the importance of understanding flows of activity through an organization. This includes communication, sales, treasury, production, quality control, public relations, and executive functions. The document stresses establishing systems to free up an entrepreneur's time and empower others. It defines important financial statements and ratios used to analyze a business's performance and cash flow. Accounting software and bookkeepers are addressed. The purpose of accounting is to improve profits and manage cash flow through coordination of production, marketing, and accounting. Cash flow management involves accelerating cash inflows and slowing outflows.
Brandon McCurdy will give an overview of Gemstar Productions' finances as the new Production Accountant. The presentation will cover the balance sheet, ratios, profit and loss statement, cash flow statement, internal controls, and accounting terminology. It will provide a deep analysis of the company's financial background by breaking down each section and key points. Understanding terminology is important rather than guessing. The balance sheet analyzes assets, liabilities, and equity. Ratios discussed include debt-to-assets, return on assets, and return on equity. The profit and loss statement summarizes revenues, costs and expenses. Cash flow covers operating, investing and financing activities. Internal controls prevent, detect and correct errors and securely manage physical and digital
This document provides information about ACC 291, an online accounting course, and summarizes its contents. It includes the ACC 291 entire course and final exam guide, discussion questions, summaries of accounting principles and financial statements, and a sample final exam question. The document aims to help students learn accounting concepts and prepare for the ACC 291 final exam.
Brennan & Clark: Your UN-Receivable DepartmentBrennan & Clark
This document discusses the importance of managing accounts receivable and collecting on overdue payments from customers. It outlines four simple rules for dealing with customers, including that allowing slow payments will encourage continued delays. The document then describes the costs of carrying unpaid receivables, both in terms of cash flow and lost opportunities. It positions Brennan & Clark as a firm that can help manage receivables and collections through various services like automated letters, phone follow-ups, online tracking, and consulting. The value of improving collections is said to be significant for companies.
Chapter 6 – Controlling Accounts ReceivablesQuestion 1. Are cr.docxchristinemaritza
Chapter 6 – Controlling Accounts Receivables
Question 1. Are credit checks performed before terms are granted to customers? Describe the process.
Conducting credit checks is highly recommended prior to setting terms granted to customers. In this way, the business owner would be able to prevent bad debts that would affect the company’s financial status.
To do so, the business must run a credit check on customers. Some private institutions provide credit services wherein they run background checks on individuals. The business may opt to charge customers with a credit check fee and then have them fill in forms where the customers consent to having a credit check run. After the results of the credit check, the business may then decide whether to transact with a customer. If they agree to a transaction, the business sets the terms depending on the customer’s credit background, particularly his or her ability to pay for rendered products or services.
Question 2. What type of sale agreements do you have in place, which are signed before the sales takes place?
Prior to signing the contract, agreements during sales include policies on return and exchange, the purchase price, the description of the product or goods being sold, warranties, description of how the goods will be delivered, and other notes agreed upon by the buyer and the seller.
Question 3. What is your Accounts Receivables turnover?
The Accounts Receivables turnover must be high for the business to ensure that it does not incur bad debts.
Question 4. What is the procedure to receive payments from customers including the receiving of the mail, opening the mail, recording the transactions, and making deposits into the bank?
To receive payments from customers including the receiving of the mail, opening the mail, recording transactions, and making deposits into the bank, the business owner should have initially recorded the terms of the receivable during the time of sale. After receiving and opening the mail, the transactions must be recorded using invoices. After keeping track of the flow of cash through invoicing, the receivables may be forwarded to the auditors and accountant. The business owner would then make a decision on how it would be deposited in the company’s bank.
Question 5. Describe the procedure the company follows when receiving payments from customers. What documents are verified to insure payments match the invoice sent to customers?
When receiving payments from customers, the business verifies the term of receivables agreed upon between the business owner and the customer. To insure payments match the invoice sent to customers, records such as the aging schedule and the general journal may be used to check the invoice using the records.
Question 6. Is there an aging process for all Accounts Receivables accounts to better control receipts from customers and to collect from overdue accounts?
Establishing and maintaining in aging process for all Acc ...
The document provides suggestions for identifying problems in business operations before they become severe issues. It recommends establishing internal controls, like segregating financial duties, to prevent fraud. It also suggests business owners get involved in daily operations to notice inefficiencies and problems employees may be unwilling to report. Producing an annual budget and reviewing monthly variances is also key to timely problem identification. For example, one company discovered it had been double billed by reviewing a large phone expense variance. Proactively managing operations through controls and budgeting allows problems to be addressed before significantly impacting profits.
How to Manage Your Lost Opportunities in Odoo 17 CRMCeline George
Odoo 17 CRM allows us to track why we lose sales opportunities with "Lost Reasons." This helps analyze our sales process and identify areas for improvement. Here's how to configure lost reasons in Odoo 17 CRM
How to Build a Module in Odoo 17 Using the Scaffold MethodCeline George
Odoo provides an option for creating a module by using a single line command. By using this command the user can make a whole structure of a module. It is very easy for a beginner to make a module. There is no need to make each file manually. This slide will show how to create a module using the scaffold method.
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FOR MORE CLASSES VISIT
www.acc291genius.com
ACC 291 is a online tutorial store we provides ACC 291 Entire Course And Final Guide You can find here
For Discussion Question 1: Post your response to the following:
• When reviewing a financial report, why should information be reliable, relevant, consistent, and comparable?
• In other words, why are these accounting characteristics important?
• What kinds of problems could be created if a financial report is not reliable, relevant, consistent, or comparable?
Acct 504 mart perfect education acct504mart.comstudent234511
FOR MORE CLASSES VISIT
www.acct504mart.com
Case Study 1 (Part A)Analyze the impact of business transactions on accounts; record (journalize and post) transactions in the books; construct and use a trial balance) For Discussion Question 1: Post your response to the following:
• When reviewing a financial report, why should information be reliable, relevant, consistent, and comparable?
• In other words, why are these accounting characteristics important?
• What kinds of problems could be created if a financial report is not reliable, relevant, consistent, or comparable?
Fin 370 genius perfect education fin370genius.comstudent234511
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? (LG4-3) 4-7 Compounding with Different Interest Rates For Discussion Question 1: Post your response to the following:
• When reviewing a financial report, why should information be reliable, relevant, consistent, and comparable?
• In other words, why are these accounting characteristics important?
• What kinds of problems could be created if a financial report is not reliable, relevant, consistent, or comparable?
Fin 571 genius perfect education fin571genius.comstudent1256789
FOR MORE CLASSES VISIT
www.fin571genius.com
1.A proxy fight occurs when: the board of directors disagree on the members of the management team. 2. A stakeholder is any person or entity: 3.Which one of the following is least apt to help convince managers to work in the best interest of the stockholders? threat of a proxy fight pay raises based on length of service implementation of a stock option plan 4.Financial managers primarily create firm value by: maximizing current sales. investing in assets that generate cash in excess of their cost. 5.First City
FOR MORE CLASSES VISIT
www.acc291genius.com
ACC 291 is a online tutorial store we provides ACC 291 Entire Course And Final Guide You can find here.
Current assets
When it comes to a company's classified balance sheets you will find current assets sheet. Current assets is cash or cash equilivants that the company will use. What you will find on a current asset sheet is Cash and equilvants, Short term investments, Accounts receivables, and other assets.
Week 5ACC 290 Week 5 DQ1(What is the Control Environment).docx.docxmelbruce90096
Week 5/ACC 290 Week 5 DQ1(What is the Control Environment).docx
Week 5 DQ1
What is the control environment? How does the control environment affect a company’s internal controls? What are the negative and positive elements of a control environment? What are two examples of strong and weak internal controls in organizations where you have worked or have first-hand knowledge?
The control environment is the basis of the entire control system that the organization is establishing. The control environment is the value that is placed on integrity and the knowledge that unethical activity will not be tolerated. It is management’s responsibility to express behavior and attitude that enforces this ethical behavior. The control environment affects the internal control by setting a basis of control activities that safeguard assets, enhance accounting reliability, increase efficiency of operations, and compliance with laws and regulations. The negative elements of a control environment are that strict adherence must be applied continuously. Sometimes employees become overworked and underpaid and this is cause for concern because their level of carelessness goes up. Other times people might become slack in their duties over time. Some of the positive elements of a control environment are that responsibility does not lie on one person but many. Each part of a process requires several people to handle it therefore offering little opportunity to do wrong. Other positives are the process of that accountability is established and understood by each individual. An example of a weak internal control I witnessed was in a friend’s tanning bed business. The friend worked during the day and outlined how she expected her teenage employee’s to behave through policies and procedures. To my friends face the employees were the picture of a model employee but when she left in the evenings to go home and let them finish out the night the trouble would begin. The employees were letting all their friends tan for free, selling them tanning products and pocketing the cash. My friend finally put up a camera and goodness was she shocked at what was happening after she left for the evening. A strong control system that I have knowledge of is the system where I presently work. Our everyday policy is outlined in who does what – no procedure is ever fully completed by just one person. For example, my student employees run the registers, I prepare the deposit, another person drops off the deposit, and the final person reconciles the transactions. If I were to do another procedure then I would not be allowed to do the one I am doing now. It is just simply separation of duties so that one person does not hold all of the control or responsibility.
References
Kimmel, P. D., Weygandt, J. J., & Kieso, D. E. (2011). Financial accounting: Tools for businessdecision making (6th ed.). Hoboken, NJ: John Wiley & Sons.
Week 5/ACC 290 Week 5 DQ2 (Key Internal Controls ).docx
Week 5 DQ2
How wo.
This document discusses the importance of managing a company's cash to cash cycle. It defines the cash to cash cycle as the time between when a company spends money on supplies until it receives revenue from customers. Managing inventory, receivables, and payables can optimize this cycle. The document advocates using the Fortenberry Cash to Cash Method to improve financial health by shortening the cash to cash cycle. It also stresses the importance of leadership engagement and building a culture of continuous improvement throughout the supply chain and wider business.
Fin 571 genius perfect education fin571genius.comstudet1
FOR MORE CLASSES VISIT
www.fin571genius.com
1.A proxy fight occurs when: the board of directors disagree on the members of the management team. For this week's checkpoint we had to look up three job postings in the field of accounting. I'm glad that I got this opportunity because it actually opened my eyes and expanded my knowledge in the accounting field. The three job positions are listed below. The first job title
Companies are Failing to Manage Debt Collection and Credit Terms #055K2Partners
The document discusses how many companies fail to properly manage debt collection and credit terms. It notes that companies risk insolvency by not actively managing late payments or bad debts. It also says that extending credit without credit checks can lead to taking on bad risks. The document provides recommendations for improving credit management, such as performing credit checks on new customers, regularly reviewing credit levels, and having robust invoicing and debt collection procedures.
The document discusses potential abuses of power and breaches of fiduciary duty by the management of DESB. Specifically, the controlling directors, EnZayed and PnHashimah, tried to pressure the auditor to not qualify the financial statements and planned to appoint a "friendly" auditor. They also charged personal expenses to the company and withdrew company money without documentation. The directors showed a lack of familiarity with accounting standards and their roles/duties under the Companies Act of 1965. Additionally, they wanted to remove the existing auditor before the end of their term without following proper procedures. In summary, the document analyzes whether the management of DESB abused their power or breached their fiduciary duties to the company and
The document provides an overview of accrual accounting. It defines accrual accounting as requiring transactions to be recorded when they occur rather than when cash is received or spent. The advantages of accrual accounting include compliance with GAAP, increased transparency through reflecting future cash flows, and better strategic planning. The disadvantages include complexity, difficulty switching methods, and potential vulnerability to fraud. The document also discusses accounting transactions, balances, assets, liabilities, double-entry bookkeeping, and the fundamental accounting equation.
22 Things to do to improve your credit controlPaula Bolton
Do you have difficulties getting paid on time by your customers? Do you hear endless excuses of why they have not paid you? Have customers dissolved their business, whilst still owing you money?
If so, read our guide on 22 ways to improve your credit control and business processes. Not all these points may apply to all businesses, but most of them will.
Over the next 22 days implement any points to improve your efficiency of getting paid and how you run your business.
For the full guide visit: https://www.fjcm.co.uk/credit-control/22-ways-to-improve-your-credit-control/
CRO (Chief Risk Office and its responsibility)Komal310425
The document discusses the role and responsibilities of a Chief Risk Officer (CRO). The CRO is responsible for identifying, analyzing, and mitigating risks across the organization. This includes ensuring compliance with regulations, overseeing internal audits, developing risk management policies, assessing operational and reputational risks, and creating strategies to minimize risks. The CRO must also address emerging risks like cybersecurity threats and data protection issues. When evaluating vendors, organizations should thoroughly assess their financial health, business credibility, background of founders/management, and conduct an overall due diligence check using documentation like financial statements, legal records, and tax documents. This helps determine the vendor's ability to meet contractual obligations and mitigate risk.
Clarisent describes how you can prevent business theft. When it comes to protecting your own enterprise from wrongdoing, it’s wise to go the extra mile, leaving no room for error.
This document provides information on managing cash flow for a business. It discusses the key activities of a business - production, marketing, and accounting. It emphasizes the importance of understanding flows of activity through an organization. This includes communication, sales, treasury, production, quality control, public relations, and executive functions. The document stresses establishing systems to free up an entrepreneur's time and empower others. It defines important financial statements and ratios used to analyze a business's performance and cash flow. Accounting software and bookkeepers are addressed. The purpose of accounting is to improve profits and manage cash flow through coordination of production, marketing, and accounting. Cash flow management involves accelerating cash inflows and slowing outflows.
Brandon McCurdy will give an overview of Gemstar Productions' finances as the new Production Accountant. The presentation will cover the balance sheet, ratios, profit and loss statement, cash flow statement, internal controls, and accounting terminology. It will provide a deep analysis of the company's financial background by breaking down each section and key points. Understanding terminology is important rather than guessing. The balance sheet analyzes assets, liabilities, and equity. Ratios discussed include debt-to-assets, return on assets, and return on equity. The profit and loss statement summarizes revenues, costs and expenses. Cash flow covers operating, investing and financing activities. Internal controls prevent, detect and correct errors and securely manage physical and digital
This document provides information about ACC 291, an online accounting course, and summarizes its contents. It includes the ACC 291 entire course and final exam guide, discussion questions, summaries of accounting principles and financial statements, and a sample final exam question. The document aims to help students learn accounting concepts and prepare for the ACC 291 final exam.
Brennan & Clark: Your UN-Receivable DepartmentBrennan & Clark
This document discusses the importance of managing accounts receivable and collecting on overdue payments from customers. It outlines four simple rules for dealing with customers, including that allowing slow payments will encourage continued delays. The document then describes the costs of carrying unpaid receivables, both in terms of cash flow and lost opportunities. It positions Brennan & Clark as a firm that can help manage receivables and collections through various services like automated letters, phone follow-ups, online tracking, and consulting. The value of improving collections is said to be significant for companies.
Chapter 6 – Controlling Accounts ReceivablesQuestion 1. Are cr.docxchristinemaritza
Chapter 6 – Controlling Accounts Receivables
Question 1. Are credit checks performed before terms are granted to customers? Describe the process.
Conducting credit checks is highly recommended prior to setting terms granted to customers. In this way, the business owner would be able to prevent bad debts that would affect the company’s financial status.
To do so, the business must run a credit check on customers. Some private institutions provide credit services wherein they run background checks on individuals. The business may opt to charge customers with a credit check fee and then have them fill in forms where the customers consent to having a credit check run. After the results of the credit check, the business may then decide whether to transact with a customer. If they agree to a transaction, the business sets the terms depending on the customer’s credit background, particularly his or her ability to pay for rendered products or services.
Question 2. What type of sale agreements do you have in place, which are signed before the sales takes place?
Prior to signing the contract, agreements during sales include policies on return and exchange, the purchase price, the description of the product or goods being sold, warranties, description of how the goods will be delivered, and other notes agreed upon by the buyer and the seller.
Question 3. What is your Accounts Receivables turnover?
The Accounts Receivables turnover must be high for the business to ensure that it does not incur bad debts.
Question 4. What is the procedure to receive payments from customers including the receiving of the mail, opening the mail, recording the transactions, and making deposits into the bank?
To receive payments from customers including the receiving of the mail, opening the mail, recording transactions, and making deposits into the bank, the business owner should have initially recorded the terms of the receivable during the time of sale. After receiving and opening the mail, the transactions must be recorded using invoices. After keeping track of the flow of cash through invoicing, the receivables may be forwarded to the auditors and accountant. The business owner would then make a decision on how it would be deposited in the company’s bank.
Question 5. Describe the procedure the company follows when receiving payments from customers. What documents are verified to insure payments match the invoice sent to customers?
When receiving payments from customers, the business verifies the term of receivables agreed upon between the business owner and the customer. To insure payments match the invoice sent to customers, records such as the aging schedule and the general journal may be used to check the invoice using the records.
Question 6. Is there an aging process for all Accounts Receivables accounts to better control receipts from customers and to collect from overdue accounts?
Establishing and maintaining in aging process for all Acc ...
The document provides suggestions for identifying problems in business operations before they become severe issues. It recommends establishing internal controls, like segregating financial duties, to prevent fraud. It also suggests business owners get involved in daily operations to notice inefficiencies and problems employees may be unwilling to report. Producing an annual budget and reviewing monthly variances is also key to timely problem identification. For example, one company discovered it had been double billed by reviewing a large phone expense variance. Proactively managing operations through controls and budgeting allows problems to be addressed before significantly impacting profits.
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Fin 571 genius perfect education fin571genius.com
1. FIN 571 Final Exam Guide (New)
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1.A proxy fight occurs when: the board of directors disagree on the
members of the management team.
Internal Cash Control
By
Kamilah Crooms
Accounting 220
Jess Stern
Internal Cash Control
The accounting department receives from sales invoices once a
month. Most of the information is missing on the invoices.
The accounting department relies on each department within the
company and all the information has to be submitted completely and
in a timely matter. In this scenario most of the information that has
been turned in has information that is missing on the invoices. I
would say that the internal controls that are not being followed are
Documentation procedures. Company documentation is very
important and must be turned in complete. These documents show
proof of delivery or proof of services to the customer. Any incomplete
documents can be very costly and can cause a delay in the company
2. being paid for any services rendered. For example, one of the
requirements in a transportation department is to make sure that the
drivers verify the load and sign for the load prior to leaving the yard,
these documents says that the load left in good condition. Well, it so
happened that we allowed a driver to leave without signing the
paperwork. This caused a delay in accounting because we had to get
signatures from the driver and the customer which took a month
later to complete.
Rob, Sue, and Bob use the same cash register at the donut shop.
Rob, Sue, and Bob all use one register has often turned into not the
best decision ideally for the company. It can increase the risk for the
drawer being short and it will be hard for the company to find out
which employee or employees had shorted the register. The internal
controls that are not being followed are Establishment of
responsibility. Happens when the company assigns one person to be
in control of a specific job or have authority to make decisions (pg
161 Internal Control and Cash). When the company signs one person
to be responsible over the register it will allow the company to hold
that one person responsible for any shortages.
Sam does the ordering of materials at the beginning of every
month and pays the bill.
In this case Sam is ordering materials and paying all the bills. This
process is actually known as related activities (pg 162 Internal
Control and Cash). This occurs when one person is doing two different
responsibilities just like Sam. The internal Control that is not being
3. applied is Segregation of Duties. It is better for the two to be a
separate responsibility because it will minimize the billing errors.
Bank reconciliations are done by the person who is responsible for
all cash responsibilities.
The problem with this scenario is that the same person is responsible
for all cash responsibilities, why is this person doing the only one that
does this job? Having one person take on such a major responsibility
increases the chances of embezzlement and thief. The internal control
that is not being applied is rotating employees’ duties and requiring
employees to take vacations. One person should not be completely in
control of one job, the company should encourage vacations or
switching positions to prevent incorrect handling of the company’s
valuable information.
New checks came in and are left on the shelf with other supplies.
This is a tough scenario because there are all sorts of internal
controls that are not being used in this case. I would say in my
opinion that the first internal control that comes to my mind that is
not being applied is bonding of employees who handle cash.
Every employee that works near or with expensive equipment should
be held reliable or responsible for the company’s assets. Bonding of
employees who handle cash protects the company by insuring that
4. the employee is or isn’t a risky applicant (background checks) or
reassuring that the employee that they will be prosecuted to the
fullest extinct if they are found guilty of thief. For example, I had
worked at Mc Donald’s and
there were my shift managers and one employee that were caught
with stealing money from the company. This situation had happen
very differently. The armor truck dropped off a deposit that belonged
to another company (armors mistake) but they signed it. Those
employees thought that nothing was going to be traced back to them
but the little did they know, all evidence traced back to them. They
each received jail time, and felony records.
Everyone has access to the computer system and the last audit was
seven years ago by the former accountant
This scenario has two things that are going on at the same time. I
will first start off with the computer system and how everyone has
access to the computer. The internal control that is not being applied
is Physical, Mechanical, and Electronic Controls. This allows the
company to control assets through physical or electronic based
systems or programs. It is extremely important for a company to
invest in computer or informational protection for the company and
for their employees. Today’s technology age most companies are
investing in a computerized program. This will help protect from
internal errors and external protection. For example, all companies
invest in a virus protection this will ensure that the company’s
information is protected and not in the wrong hands.
5. Invest idle cash
Invest idle cash occurs when any excess funds or cash needs to be
invested. The money should be highly invest and risk free. For
example, a major company should make investments with their
assets into profitably investments and risk free.
Plan the timing of major expenditures
This is when a company sets aside money for major cash needs. We
live in a world that things happen daily. A good company would set
aside emergency funds. For example, during a terrible thunderstorm,
the winds practically ripped off the roofing shingles off a commercial
business. The company will be able to use the money for emergency.
Delay payment of liabilities
Delay payment of liabilities is when a company pays bills not too soon
and not late. This allows the company to have money available for
bills that that really need to be paid allowing excess funds to be free
for other uses.
Keep inventory levels low
This occurs when the company keeps the inventory low so that it will
bring in more profits. For example, if the managers at a fast-food
over plan and fix too many hamburgers and the customers don’t buy
it, then the food will go bad and the company will lose profit.
6. Increase the speed of collection on receivables
This occurs when money is owed to the company, the company
cannot claim these until the funds have been received. Some
companies offer incentives to encourage customers to pay early or on
time. For example, my job encourages their customers by letting
them know that there will be a price increase on or after a certain
date and this really works because the customers want to pay at a
lower price.
References:
http:yourdictionary.com /accounting_statements.org Retrieved
2/13/2010
Thomas, Y. 2005-08-27 “Accounting 101 pg. 52 Statemen
-------------------------------------------------------------
FIN 571 Final Exam Guide Set 2 (NEW)
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1. Financial managers should primarily strive to: 2. The process of
planning and managing a firm's long-term assets is called Axia
College Material
Appendix B
Cash Management Matrix
Directions: Using the matrix, list how each of the principles of
internal control works, and give an example for each. Next, list how
each of the principles of cash management works, and give an
example for each.
Principles of Internal
Control
How it Works Example
Establishment of
responsibility
Happens when the
company assigns
one person to be in
control of a specific
job or have
authority to make
decisions.
My job, Our Sales
department is the
only one that can
waive a restocking
fee. It allows the
Sales team to be in
control of the
customers returns
Segregation of duties This is when the
company has more
than one person to
control a task or job
A church- You have
people who count
the offering and
then you have
someone who
writes down and
8. logs in what was
received
Documentation
procedures
Evidence or proof of
all company
transactions
My job we deliver
ship shingles to our
customers, and we
make the driver sign
prior to leaving and
we make the
customer sign a
“Proof Of Delivery”
form
Physical, mechanical,
and electronic
controls
Allows the company
to control assets
through physical or
electronic based
systems or
programs.
Our job has a
system called Cisco
and this tracks the
employees breaks
and lunches. Also,
monitors how long
the CSR have been
ready or working.
Physical control
would be the
security guard, they
require
identification prior
to entry.
Independent internal
verification
Any information that
can be reviewed ,
compare, and
reconciliation by a
employee
My job has a way of
tracking our
inventory and when
someone says that
they were shorted
on their order we
9. can go back and
track the inventory
and compare the
numbers in the
system and a
physical count to
determine if the
numbers were
incorrect
Other controls Bonding of
employees,
company protects
against abuse of
assets.
Our company fired a
girl just recently
because she had
used the company
card business card
for personal us that
was not work
related.
Principles of Cash
Management
How it Works Example
Invest idle cash Occurs when any
excess funds or cash
needs to be
invested,
My father’s
company makes
wise investments
and it turns around
in his favor
Plan the timing of
major expenditures
A company wants to
make sure that
there is money set
aside for major cash
needs
During the recession
profits dropped
lower than expected
so some companies
10. pulled from these
funds
Delay payment of
liabilities
When a company
pays the bills at an
appropriate time
not late and not too
soon.
Ok, when times are
tough at home and
bills are due I
organize the bills by
which bills needs to
be paid the soonest,
because if I pay the
bills too early I will
cut off my excess
funds that could be
used for something
else
Keep inventory levels
low
Happens when a
company keeps the
inventory low so
that it will continue
to bring profit
See’s Chocolate
factory has to make
sure that they are
not over producing
or making too much
or else the sit and
the company will
lose money
Increase the speed of
collection on
receivables
Money that is owe
to the company by
other people or
customers is money
that can not be
counted towards
the companies funds
When a customer
places a order for a
product and has not
paid yet, the
company can not
count the money as
their’s until it is
received.
-------------------------------------------------------------
11. FIN 571 Week 1 Connect Problems (Math and Accounting
Review)
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FIN 571 Week 1 Connect Problems (Math & Accounting Review) 1.
Functions Excel will make your life as a finance student much easier.
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.
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
12. 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://fi
nancial- Retrieved 2/18/2010
statements.suite101.com/article.cfm/financial_statements_the_p_l.
Retrieved 2/18/2010
-------------------------------------------------------------
FIN 571 Week 1 Connect Problems (Week 1 Problem Set)
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FIN 571 Week 1 Connect Problems (Week 1 Problem Set) 1.The
ultimate control of a corporation lies in the hands of the corporate:
president. board of directors. Discussion Question 1: Post your
response to the following:
13. 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
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.
14. 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
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
15. 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 571 Week 1 DQ 1
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What is ethics? If you follow all applicable rules and regulations, are
you an ethical person? Cost, Volume, and Profit Formulas
By
Kamilah Crooms
Due February 28, 2010
Explain the components of cost-volume-profit analysis.
16. 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?
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
17. 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.
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?
18. Shown in the example above, if one or more of the components
changes is will cause the net income to increase or decrease.
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 571 Week 1 DQ 2
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Assume that interest rates have increased substantially. Would this
tend to increase or decrease 7 How should mixed costs be
classified in CVP analysis? What approach is used to effect the
appropriate classification?
19. 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.
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FIN 571 Week 1 Individual Assignment Business Structures
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Watch the "Your Business Structure" and "Corporate Business
Structures" videos on the Electronics Reserve Readings page.
Axia College Material
Appendix C
Budgets Matrix
20. 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
budget
Is the estimated
quantity or cost of
the raw materials
that is needed in
order to produce the
units required to
fulfill inventory
Shows management
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
21. 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
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.
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FIN 571 Week 2 Connect Problems
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FIN 571 Week 2 Connect Problems 1.Sankey, Inc., has current assets
of $4,230, net fixed assets of $25,700, current liabilities of $3,500,
and long-term debt of $14,400. What is the value of the
22. shareholders' equity account for this firm 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
decision like taking on another company will not hurt the company
and is something that the compnay can sustain based on the budget.
23. 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
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
24. 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.
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FIN 571 Week 2 DQ 1
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In order to receive proper credit, please reply to this message when
posting your answers to WK2 DQ1.
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.
25. 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 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.
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FIN 571 Week 2 DQ 2
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26. Suppose rf is 5% and rM is 10%. According to the SML and the
CAPM, an asset with a beta of −2.0
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 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
27. a business should take some type of accounting class to become
more aware of how to run the accounting part of a business.
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FIN 571 Week 2 Individual Assignment Business Structure
Advice
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Write a 350 to 700 word response to the following e-mail:
Dear Consultant,
Business Plan
By
Kamilah T. Crooms
28. The name of my business is called DestinyWear. DestinyWear is
a urban fashion clothing company for woman, men and youth.
29. 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.
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
30. 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
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 Internationalcustomers. 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
31. 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
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,
32. 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 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
33. 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
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FIN 571 Week 2 Individual Assignment Ethics and Finance
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The Sarbanes-Oxley Act of 2002 (SOX) was passed as the result of the
Enron scandal and other instances of accounting fraud.
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.
34. (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.
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:
35. 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:
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.
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FIN 571 Week 2 Individual Assignment Ratio Analysis
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Ratio Analysis
(Individual Assignment)
36. You may use excel or word.doc format for this assignment.
Please post your homework as a word.doc or excel file in the class
discussion section below by the due date.
Week 1 DQ 1
Due Tuesday, Day 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.
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
37. 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
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)
38. 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 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
39. 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
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
40. 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 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
41. 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.
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,
42. 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, 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.
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FIN 571 Week 2 Learning Team Reflection
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Read the Ethics case, "A Sad Tale: The Demise of Arthur Anderson"
located in the WileyPLUS Week Fundamentals of Corporate Finance
Chapter readings. Lucent Technologies
Axia College of University of Phoenix
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
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
44. 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.
Reference
Axia College. (2007). Understanding Financial Statements. Retrieved
May 10, 2010 from Axia College, Week 2 Assignment, ACC/230.
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FIN 571 Week 3 Connect Problems
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FIN 571 Week 3 Connect Problems If the Garnett Corp. has a 15
percent ROE and a 25 percent payout ratio, what is its sustainable
growth rate?
45. 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
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
46. 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.
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FIN 571 Week 3 DQ 1
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Why are interest rates on short-term loans not necessarily
comparable to each other? 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
47. dividend yield. These ratios will help both management and investors
in analyzing the company. For example, if I were looking to invest in a
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/dividendpayout
ratio.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.
48. 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
of a firm’s financial success?” Look for indicators like liquidity or
solvency to answer this discussion question.
49. 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
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.
50. 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
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
51. 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
needed.
Reference:
Investopedia. (2010). Spotting Creative Accounting On The Balance
Sheet. Retrieved
fromhttp://www.investopedia.com/search/searchresults.aspx?q=Spo
tting+Creative+Accounting+On+The+Balance+Sheet&submit=Search
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FIN 571 Week 3 DQ 2
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Optical Supply Company offers credit terms of 2/10, net 60.
STOCK DIVIDEND
Stock Split
University of Phoenix
Stock Dividend
In the present time, the stock dividend has become important
concept. When dividend is given in form of stock, it is called stock
dividend. In this form of dividend, the cash does not use. It is
important, when the corporation declares stock dividend, the market
value of the share decreases because the number of stock increases.
The many companies prefer stock dividend due to the tax benefit. If
the individual gets stock dividend, he does not pay any tax on stock
dividend. Thus the stock dividend reduces tax burden. On the other
hand, the ownership of investors also spurs up in the company
because the number of holding share increases. There is also
disadvantage of stock dividend. The market value of the share
decreases, so the market value of holding also decreases (Kennon,
2009).
The ABC Company is leading company in its industry. The number of
outstanding share of the company is one million. On the other hand,
the number of investors is five millions. The value of market
capitalization is $100 million. The management declares 20% stock
dividend. Thus the 200000 shares will be distributed as a stock
53. dividend. The number of outstanding share will be increased by
200000 and the new total number of outstanding stock will be 1.2
million. On the other hand, the new value per share in the market will
be $83.33 (100 million/1.2 million). This example is taken from below
mentioned link:
Stock Split
The stock split is also an important concept. When the management
wants to increases number of shares, the management follows this
method. In this method, the face value of the share is split and
number of share gets increased. Due to increment in number of
outstanding share, the market value of per share also gets affected
but the total market capitalization of the company does not affect.
Both stock split and stock dividend increase number of outstanding
shares but both are different due to the accounting treatment. In the
stock split, the investors do not get any real benefit. It is also known
as non-cash distribution of dividend. The motto behind stock split is
to increase trading of the shares in the market (Baker, 2009)
For example, the face value of per share is $100 and the total
outstanding shares are 100 million. If the management of the
company announces stock split in ratio of 1:2, the total outstanding
shares will be increased by 100 million, thus the new total number of
the share will be 200 million. On the other hand, the face value of the
share will reduce by 50%. So the new face value of the share will be
$50. Due to effect of stock split, the holding share of the investor will
also increase in the prorate basis. If the investor has 10 shares, now
he will have 20 shares. It is important thing that the total issued
capital will not be changed. The illustration of stock split has been
got from following link:
Reverse Stock Split
The reverse stock split is just opposite of stock split. In this process,
the management reduces the number of outstanding shares. The
54. company increase face value of the share. In this method corporation
decides a ratio such as 2:1. Thus the company accumulates two
shares in one share. In this method, the total market value of
company does not change. Due to reverse stock split, the earning per
share and face value of per share rises. Thus the reverse stock split
provides just opposite result from stock split. It is important question,
why company selects this method. When the management seems
that the face value of the share is less as compared to competitors
then the company goes for this method to make its share value to
equal to competitor’s share’s face value. It is also a sound strategy to
increase treading of shares. If the face value of share is too cheap in
comparison to competitors, the investors will be discouraged for
investment. For increasing the confidence of investors, the
management uses this method (Mladjenovic, 2009).
For example, an investor holds 100 shares of XYZ Company and the
face value per share is $50. If the management go for reverse stock
split option and declares one share for 10 shares then the holding of
the individual will reduce 9 shares for every 10 shares. Thus the new
holding of the investor will be 10 (100/10) shares but the face value
per share will be $500. It is also important that the total market
capitalization will remain as same as before reverse split. The
example of the reverse split is take form below mentioned link:
http://www.sec.gov/answers/reversesplit.htm.
References
Baker, H. K. (2009). Dividends and Dividend Policy. John Wiley and
Sons.
Kennon, J. (2009). All About Dividends. Retrieved May 31, 2010, from
http://beginnersinvest.about.com/od/dividendsdrips1/a/aa040904_
2.htm
Mladjenovic, P. (2009). Stock Investing for Dummies. Dummies.
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55. FIN 571 Week 3 Individual Assignment Interpreting Financial
Results
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Resource: Financial Statements for the company assigned by your
instructor in Week 2.
Analyzing an Income Statement
The net income of Kodak has decreased a bit; it appears that the
company is more profitable. By conducting a side by side analysis
from 2004 to 2003 the company has increased in current assets and
decreased in total assets. It appears that the company went down
in property, plant and equipment net as well as discontinued
operations. So, despite the decrease in total assets it looks like the
company has made a good decision.
The company has also decreased its total liabilities by about 4%. I
believe this to be good because the short term borrowings and long
term debt has decreased. To me, this means that the company is
tightening their belt and paying off old debt.
56. Total shareholders’ equity has down a little bit in dollars, but on the
percentage level the company’s percentage has gone up. I believe
this is because the company issued $104k more shares in 2004 than
in 2003. The company has the same amount of shares outstanding
in 2004 that it did in 2003 as well. Retained earnings on the stock
have gone up in 2004 as well. I believe this is contributed by the
more shares that have been issued.
I believe the profitability of the company is under good standings.
They appear to be making the necessary adjustments in the
company to stay with in a profitable income.
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FIN 571 Week 3 Learning Team Reflection
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Watch the "Concept Review Video: Working Capital Management"
video located in theWileyPLUS Assignment: Week 3 Videos Activity.
Cash Flow Statement Analysis
Cash Flow Statement Analysis
The cash flow statement is important financial statement of the
corporation. The cash flow statement states from where cash has
come and where cash has been gone. Thus the cash flow statement
makes a relationship between beginning balance and ending
balance of cash. The cash flow statement is prepaid on the basis of
57. income statement and balance sheet of the company. The Little Bit
Inc’s beginning cash balance including marketable securities was
$24000. On the other hand, the ending cash balance including
marketable securities of the company was $40000 (Weygandt,
Kimmel & Kieso, 2009).
The net income of the company was $5500 during 2009. The
company generated cash inflow from operating activity is less as
compared cash out flow from operating activities. The company
generated $9000 negative cash balance in operating activity section
of the cash flow statement. On the other hand, in the investment
section, the firm has also negative cash balance. The firm has $7000
negative balance in investment section of the cash flow statement.
The Little Bit Inc made investment during the year instead of selling
of assets. Last section of the cash flow statement is financing
activity section. In which, all finance related activities come. The
corporation sold some shares and borrowed some money from
outside lenders therefore the company has positive case balance by
$32000 in financing activity section.
Reference
Weygandt, J.J.,Kimmel, P.D. & Kieso, D.E. (2009). Managerial
Accounting: Tools for Business Decision Making. John Wiley and
Sons.
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58. FIN 571 Week 3 Team Assignment Financial Statement
Interpretation
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Select three publicly traded companies. Choose one each from the
following sectors: manufacturing, service, and retail.
Preparing an Income Statement
Coyote, Inc. Company
Multi-Step Income Statement
200x 201x 202x
Net Sales 1,833,000$
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$ -$ -$
59. 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.
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FIN 571 Week 4 Connect Problems
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FIN 571 Week 4 Connect Problems Q-1 Even though most corporate
bonds in the United States make coupon payments semiannually,
Week 5 DQ 1
Due Tuesday, Day 2
60. In what ways does the statement of cash flows relate to the balance
sheet and income statement?
It is important to understand what we are doing with the numbers
and the results these numbers give us because the result is the
information that will be available to us from financial statements.
Although some want to see the income statement and ignore the
other statements we need to use them together to see the total
picture of what is happening to our business. The relationship
between the numbers on the financial statements shows us
everything we need to know about the business.
The income statement shows income and expenses for a period of
time and if we are making or loosing money. The balance sheet
compares the assets to liabilities and shows how much money the
business would have if everything is sold today.
The statement of cash flow might be the most critical statement
because there is plenty of information we can gain form it. This
statement relates with the income statement on operating activities
to see if they are generating cash or not. It is related to the balance
sheet on how much cash is used in investing activities. In relationship
with the balance sheet the cash flow statement shows what cash is
provided or used by financing activities. It will tell us how much debt
has been paid and will indicated if we are using more debt or have
paid down the credit line.
When the business makes a sale or receives payment for a sale on
credit that is an inflow. A sale shows up as income on the profit and
loss statement and as an inflow on the cash flow statement. It also
shows up either as cash or accounts receivable on the balance sheet.
Also, how quickly we can collect on accounts receivable will play a big
role in the cash flow. When the business spends money, it shows up
61. as an expense in the profit and loss statement and as an outflow on
the cash flow statement. It also shows up on the balance sheet as a
decrease in cash, or an increase or decrease in liabilities, depending
on what the expense represents.
Response 2
In what ways does the statement of cash flows relate to the
balance sheet and income statement?
The cash flow statement relates to the income statement and
balance sheet. The net income from the income statement is listed on
the statement of cash flows. Operating activities are analyzed on the
statement of cash flows; this section of the statement reconciles the
net income to the actual cash the company received from or used
during operations. The second section of the statement of cash Flows
is the cash flow from investing activities which include purchase or
sale of assets. The last section in the Statement of Cash Flows is the
cash flows from financing activities that includes raising cash by
selling stocks/bonds or borrowing from backs; or cash out flows from
paying back loans. The balance sheet shows the different account
balances at the end of the accounting period. The statement of cash
flows reflects changes in the accounts listed on the balance sheet
between accounting periods. The net cash from operating, financing,
and investing activities are added up to calculate the net change in
cash.
Week 5 DQ 2
Due Thursday, Day 4
62. Discuss how the statement of cash flows is utilized by investors. If you
were an investor reviewing a statement of cash flows, what section
might interest you most? Why? Discuss the circumstances in which
other sections of the statement might be important to an investor.
Prior to making an investment in a company, one would want to
understand the decisions the owners are making to fund the
operations of the company daily. Maintaining sufficient cash to
acquire new product, pay overhead, and satisfy generated sales
would be the predominant need of the company. Second need would
be for the company to have sufficient cash to remain
competitive. This may require cash to invest in research and
development, increase inventory as new product introduction,
improve efficiency in plant and equipment, or cash to satisfy prior
borrowing obligations. By reviewing the statement of cash flow, the
investor can determine if the company is generating sufficient cash
internally to fund operations or are they requiring outside injection of
cash to finance the short fall in cash needed to operate the
company. Last, the investor can review the statement of cash flow to
better understand the leverage of the company and the requirement
for repayment of debt, or dividends to reward prior investments.
Response 2
Discuss how the statement of cash flows is utilized by investors. If you
were an investor reviewing a statement of cash flows, what section
might interest you most? Why? Discuss the circumstances in which
other sections of the statement might be important to an investor.
63. The statement of cash flow is utilized by investors because it has all
information integrated from the balance sheet and the income
statement. The statement of cash flow is used by an investor to see if
the operating activities are greater than the net income to have
earnings that are called “high quality”. If operating activities are less,
then a red flag will be raised as to why the net income is not
becoming cash. Another reason would be investors believe cash is the
best. The statement shows all cash coming and going from the
business. If the company generates additional cash than what is
being used, then the company can reduce their debt, acquire another
business, or buy some of the stock back. The last reason why would
be that financial models are based upon the statement of cash flow.
If I was an investor reviewing a statement of cash flows the section
that might interest me the most would be the operating activities. I
would like to know how the company was doing and what areas need
to be improved to have more cash generated in the business. All the
sections are important to an investor so they can see the complete
big picture of their investment.
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FIN 571 Week 4 DQ 1
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A firm uses a single discount rate to compute the NPV of all its
potential capital budgeting projects, even though the projects have a
wide range of nondiversifiable risk.
64. Candela Corporation
Axia College of University of Phoenix
Candela Corporation
Candela Corporation and Subsidiaries have been working for over
34 years developing and commercialize aesthetic laser systems that
allow physicians and personal care providers to treat a variety of
cosmetic and medical conditions such as removal of spider veins,
scars, stretch marks, warts, as well as hair removal and age spots,
freckles and tattoos. Other skin treatments such as psoriasis and
acne and acne scars are also treated. (Axia College, 2007)
Going from top to bottom on The Candela Corporation and
Subsidiaries Consolidated Statement of Cash Flows; for the operating
activities, 2002 shows an alarming loss in the net income while 2003
and 2004 for the company are showing a significant and steady climb
in the net income. In 2004 there was a new category added called
Provision for the disposal of discontinued operations and the
category has caused an increased the account for 2004. Loss from
discontinued operations grew from 2002 to 2003 but had a
significant decline for 2004. Depreciation has increased over the last
3 years as well. Provision for bad debts increased significantly too,
but an increase in bad dept is expected as revenue increases. The
provision for deferred taxes shows the company went from a loss in
2002 and 2003 to show there was no tax loss in 2004. The tax benefit
from exercised stock options has practically doubled sense 2003. The
changes in assets and liabilities for the last 3 years have been up and
down. Receivables have increased, notes receivable decreased, and
inventories have increased. Other current assets, other assets have
also increased. Accounts payable has made a significant decrease in
the last 3 years as well as accrued payroll expenses. The accrued
payroll decreasing could mean that the amount of employees over
65. the years has decreased as well. The accrued warranty costs have
increased as well; this could mean that the company renewed
equipment warranties. The net cash provided by operating activities
looks to have gone from a loss in 2002 to a large profit in 2003 and
then a decrease, yet still a profit for 2004. It appears on the
operations level that management needs to do more to regulate the
company’s finances so there is not an up and down variance each
year.
The cash flow from investing activities shows me that in the last
three years they had large amount of investments in 2002 and 2003
but now they are letting them decrease.
The cash flow from financing activities states that the proceeds
from issuance of common stock have increased significantly from
2002 to 2003 and rose a little more in 2004. The repurchases of stock
has not happened sense 2002 and the principle payment of long-term
debt grew in 2003 from 2002 and shows no activity for 2004. Same
goes for the net borrowing on line of credit; it appears that Candela
Corporation is current on payments to line of credit. So, the net cash
from financial activities looks great for 2004. The cash and cash
equivalents for each year have increased steadily.
After reviewing the consolidated statement of cash flows for
Candela Corporation, I believe the company is making a profit, but
perhaps need some control over their operating activities.
Reference
Axia College. (2007). Statement of Cash Flows. Retrieved June 14,
2010 from Axia
College, Week Six, ACC 230.
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66. FIN 571 Week 4 DQ 2
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Phyllis believes that the firm should use straight-line depreciation for
a capital project because it results in higher net income during the
early years of the project’s life.
Analyzing Statements of Cash Flows
4.8. Research Problem
Choose five companies from different industries and locate their
statements of cash flows
for the most recent year.
(a) Create a table to compare the dollars provided or used by
operating, investing, and financing activities, as well as the overall
increase or decrease in cash.
(b) Create a second table for each company comparing this same
information for each of the three years presented in that company’s
statement of cash flows. Include an additional column that looks at
the combined cash flows for all three years.
(c) Write a short analysis of the information gathered. Your
discussion should address, among other things, whether cash flow
from operating activities is large enough to cover investing and
financing activities, and if not, how the company is financing its
activities. Discuss differences and similarities between the companies
you have chosen.
67. (a) Create a table to compare the dollars provided or used by
operating, investing, and financing activities, as well as the overall
increase or decrease in cash.
STATEMENT OF CASH FLOW ANALYSIS
STARBUCK
S
HARELY
DAVIDSON RITE AID
2008 2008 2008
NET INCOME /
STARTING LINE
$
315.5
$
-
$
(1,079.0)
OPERATING
ACTIVITIES
$
1,258.7
$
(684.7)
$
79.4
INVESTING
ACTIVITES
$
(1,086.6)
$
(393.3)
$
(2,933.7)
FINANCING
ACTIVITIES
$
(184.5)
$
1,293.4
$
2,904.0
CASH
$
(11.5)
$
190.7
$
49.9
(b) Create a second table for each company comparing this same
information for each of the three years presented in that company’s
statement of cash flows. Include an additional column that looks at
the combined cash flows for all three years.
STARBUCKS
68. 2008 2007 2006
Net Income/Starting Line 315.5 672.64 564.26
Cash from Operating Activities 1258.70 1331.22 1131.63
Cash from Investing Activities
-
1086.60
-
1201.95 -841.04
Cash from Financing Activities -184.50 -171.89 -155.33
Net Change in Cash -11.50 -31.35 138.80
Net Cash - Beginning Balance 281.30 312.61 173.81
Net Cash - Ending Balance 269.80 281.26 312.61
HARLEY DAVIDSON
2008 2007 2006
Net Income/Starting
Line 0 933.84 1043.15
Cash from Operating
Activities -684.65 798.15 761.78
Cash from Investing
Activities -393.25 391.21 -35.26
69. Cash from Financing
Activities 1293.39
-
1037.80 -637.02
Net Change in Cash 190.70 164.46 97.42
Net Cash - Beginning
Balance 402.85 238.40 140.98
Net Cash - Ending
Balance 593.56 402.85 238.4
RITE AID
2008 2007 2006
Net Income/Starting
Line
-
1078.99 26.83 1273.01
Cash from Operating
Activities 79.37 309.15 417.17
Cash from Investing
Activities
-
2933.74
-
312.78 -231.08
Cash from Financing
Activities 2903.99 33.72 -272.84
Net Change in Cash 49.61 30.08 -86.75
Net Cash - Beginning
Balance 106.15 76.07 162.82
70. Net Cash - Ending
Balance 155.76 106.15 76.07
(c) Write a short analysis of the information gathered. Your discussion should a
large enough to cover investing and financing activities, and if not, how the co
the companies you have chosen.
Starbucks operating cash flow has gone up in 2007 and decreased a little in 2
side but previously was doing well. The net loss in cash at end of year is decre
there can be a gain.
Harley Davidson's operating cash flow has significantly decreased from 2007.
in cash from operating activities is probable from the lack of information supp
buying at this point could have an effect on why the net income is decreasing.
gain.
Rite Aid's operating cash flow has taken a significant decrease as well from pr
cash from financing, the net change in cash is better than it has been in previo
growing needs in medical supplies. This also could reflect the expansion of th
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71. FIN 571 Week 4 Individual Assignment Analyzing Pro Forma
Statements
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Decide upon an initiative you want to implement that would increase
sales over the next five years, (for example, market another
Findwhat.com Case - CheckPoint
ACC 230
Findwhat.com has recorded the 135 percent increase in the revenue
which is mainly due to the business acquired of Espotting during the
year. The different accounting policies are present for the acquiring
firm and the acquired firm. The company has recorded certain
premature revenues for the amount which advertisers had made only
the advance deposit. As result, the company is recognizing the vendor
financing as revenue. In some places, the gross revenue has been
72. recognized while in another, the net revenue has been recognized.
The network click revenue is recognized at gross level while the
private level revenue is taken at net level. Some of the revenue
expenditures have been recognized as the capital expenditures.
Revenue for set up network fee is treated as deferred revenue and is
recognized over a period of time. The company is very inconsistent
with regards to its accounting policies in terms of recognition of
revenue. The provision and treatment of amount for doubtfuldebt is
also not satisfactory. When a customer clicks on a sponsored
advertisement, the whole of the revenue due to him is recognized. The
company is having a very high amount of doubtful debt balance at the
end of the year ending December 31, 2004.
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FIN 571 Week 4 Learning Team Reflection
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Watch the "Concept Review Video: Stock Valuation" video located in
the WileyPLUS Assignment: Week 4 Videos Activity. Week 7 DQ 1
Due Tuesday, Day 2
Post your answer to Study Question 5.2 on p. 180 (Ch. 5). As you
read your classmates’ responses, consider the following scenario: If
you compared two different companies that utilized two different
valuation methods, how might the quality of the results differ? Also,
comment on the difficulty of making comparisons between two firms
that use different valuation methods.
Understanding the different inventory methods is crucial. First
the person that establishes the inventory needs to determine which
73. method to use. LIFO, or FIFO. LIFO means Last in First Out. This
means that when a purchase is made, and sales are recorded the
newest product is used first. So if I bought10 combs at $2 on
December 1st, and then I buy 5 combs at $2.50 on December
10th. When sales are made I am going to record sales using the
$2.50 until I sell through the 5 combs that were purchased on the
10th, and then the cost will go to the previous purchase price of $2
until those 10 combs are sold through. FIFO is just the
opposite. Meaning that goods are used in the order that they are
received. The first items ordered, are the first items sold. Either
method will pass an audit. It is important to note though that
managers can't switch back and forth between the two
methods. Profit will vary depending on which method is being
used. Say you sold only 6 combs at $3 each. Using the LIFO method
this would equal $3.50 profit. If you used the FIFO method, this
would result in a $6.00 profit.
Response 2
Post your answer to Study Question 5.2 on p. 180 (Ch. 5). As you
read your classmates’ responses, consider the following scenario: If
you compared two different companies that utilized two different
valuation methods, how might the quality of the results differ? Also,
comment on the difficulty of making comparisons between two firms
that use different valuation methods.
It is very important to understand which inventory valuation method
is being used to determine the profit numbers quality. The balance
sheet, statement of cash flow and income statement can be directly
impacted by the valuation method that used to determine the costs of
inventory. The three methods that are used are FIFO, LIFO and
Average Cost. The valuation ratios can be dramatically affected
depending on the inventory valuation that is being used over a long-
term period; especially because prices are likely to rise. When using
FIFO you can increase net income, but then at the same time raise the
amount taxes that business is obligated to pay. When using LIFO the
74. inventory can be obsolete because they are old this will result in
lower net revenue because the products pricing is higher. The
Average Cost results usually fall between LIFO and FIFO. The
bottom line can be affected mainly by the inventory analysis and the
ratio results that are formed from that analysis. It is easier to
compare companies that are in the same line of business, so I believe
that quality of results would differ tremendously if different valuation
methods were used. If you use LIFO that company may seem
unattractive but they are performing well, as for FIFO it may look
good as for profit, but may not be performing well.
DQ 2
Week 7 DQ 2
Due Thursday, Day 4
Post your answer to Study Question 5.6 on p. 180 (Ch. 5). Discuss
the consequences of poor quality reporting. What has the U.S.
government done to improve the quality of reporting after recent
financial scandals such as Enron?
I think that the significance is that the analysts only see this one
HUGE transaction. The events that actually led up to this large
transaction actually took place over a 2 year period. These items
should have been written off as they occurred. Wall Street would not
have known that the executives refused to write off these accounts
75. when they should have. Wall Street only see's the one large
transaction. If the company would have been more honest in their
reporting they would have seen (more than likely) that there were
many accounts over a two year period that should have been written
off at different periods. So the analysts would not have seen a pattern
of recurring write-offs. If the analysts only see the one transaction
they are less likely to be able to paint an accurate picture of the
financial standing of the business for investors, or potential
investors. If the investors could see that there were many accounts
that had to be written off maybe their investing decisions would have
been different. The regulation of the accounting field has grown by
leaps and bounds since the Enron scandal. The government has
implemented several agencies and regulations to ensure honesty in
accounting practices. SOX is one example of an agency that has been
put into place to ensure honesty in accounting. SOX implements
things like internal controls, and accountability for CEO's and
CFO's.
Response 2
I believe the impact and importance of this write-off event is a very
big matter. It is obvious how they handled it that it was a scandal
from the start. I think that everyone involved had a big role in how
things played out. To me I think of the investors as a really big hit to
this but also feel that audit committees have to be held responsible as
well. It has been shown over many examples that adit oversights are
happening to financial reporting. Although I do feel they are getting
better and tighter due to conforming tightly with the GAAP
requests. I feel over time the accounts receivable should have been
written off in smaller increments and not all taken by $405 million at
once. Maybe that isn't correct but it would have been easier I would
think to take the receivables over time.
Response 3
76. Wall Street should have read the footnotes and seen that the write off
was for accounts receivables and should have been reported in the
allowance for doubtful accounts. Every company that allow sales on
credit face doubtfulaccounts; therefore, the write off may reoccur.
The significance of this transaction is that WorldCom want to cover
up the $405 million dollars that it was unable to collect from its
customers, but WorldCom wrote off a large sum of money rather
recording the write-off as needed and the analyst over looked it.
Depending on how the company policy is for writing off accounts,
from 1998 to the 3rd quarter in 2000 is 11 quarters. If the company
wrote off bad accounts quarterly it should have wrote off
36,818,181.82 per quarter. Investors would not want to continue to
invest into a company that has poor collection skills, or poor
management. Unusual items are simply for those items that are not
recurring operating expenses. Bad debts do not fall under this
category. Since the Enron and WorldCom scandals many rules and
regulations have been put in place by the government such as SOX.
More people are being held accountable for their actions and
consequences follow poor quality reporting such as fudging the
books.
-------------------------------------------------------------
FIN 571 Week 4 Team Assignment Operating Leverage and
Forecasting
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Operating Leverage and Forecasting Problems Team Assignment
Please complete the following problems. When calculating earnings
per share and PE ratios, please show your work. This problem is
similar to the examples shown in the lecture.
1.