1. Financial Ratios--- • Liquidity Ratio: measure the availability of cash to pay debt. Current Ratio = Current assets/ Current Liabilities 262‚515/ 285‚030= 0.92 There is a problem meeting its short term obligations The best way to improve this ratio and better position the business to cover its short-term obligations is to better manage current liabilities (accounts payables). Generate more profit (cash) out of each sale by increasing profit (as long as it is competitive within the industry)
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obtain funding‚ you need to convince a lender / investor that your business is more than a hobby. You need to demonstrate that you have a firm grasp of your business‚ the accounting practices that impact your business‚ the controls needed to safeguard assets‚ and which accounting system will produce accurate and relevant financial information. 1. Describe the type of business you have created including: a. The product or service‚ and general staffing plan. Provide a rationale for your plan. Having worked
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shareholders but that it was not immune to the global economic downturn and felt this most during the 2009 fiscal period. Ratio Analysis Overview i Gross Profit Margin Operating Profit Margin Return on Assets Return on Equity Current Ratio Quick Ratio Debit/Equity Ratio Total Debt Ratio Time Interest Earned Asset Turnover Ratio Average Collection Period Inventory Turnover Ratio Change 08-09 -1.99% -5.46% -17.60% -17.60% 25.99% 26.54% 4.99% 3.28% -3.39 4.8% 2009 79.20% 34.85% 19.34% 38.42% 1.82 1.58 9.9%
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growth in 1996 (using exhibit 4&5): Operating assets (OA) = total assets – short term investment OA in 1995 = 1594 – 484 = 1110 Mil USD Operating Asset to Sales ratio = 1110/3457 = 32% Sales increased from 3457 to 5296 Mil USD in 1996. Multiplying the operating asset to sales ratio by the increase in sales 0.32 x (5296 – 3457) = 582 mil USD‚ which is the operating assets that Dell needed to fund its 52% growth. This increase in assets meant an increase in liabilities too‚ proportional
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Question 1: The definition of assets is in FASB Concept Statement 6‚ paragraph 25: Assets are probable future economic benefits obtained or controlled by a particular entity as a result of past transactions or events. Paragraph 26 then describes the trio of characteristics that qualify an item as an asset: an asset has three essential characteristics: (a) it embodies a probable future benefit that involves a capacity‚ singly or in combination with other assets‚ to contribute directly or indirectly
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measurement of the financial instrument and impairment of financial assets. However‚ the boards did not converge and set down different paths. The IASB issued IFRS 9 a financial instrument in July 2014‚ IFRS now introduces a new model for classification for measurement and impairment. The FASB is still deliberating‚ (pwc.com). Fair value measurement provides users of financial statements with an accurate picture of the value of a company’s assets. Both IFRS and GAAP require firms to include information regarding
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Industry 3 Size of the firm: capitalization 4 Sales 4 Ownership: 5 International: 5 short term credit analysis 6 Analysis of Current Assets and Liabilities: 6 Current Asset Composition: 6 Current Liabilities Composition: 7 Working Capital and Related Ratios: 8 Working Capital: 8 Working Capital of Gul Ahmed:- 8 Current Ratio: 9 Current Asset= current Assets/ Current Liabilities. 9 Current Ratio of Gul Ahmed:- 9 Net Trade Cycle: 10 Net Trade cycle of Gul Ahmed:- 11 Cash Ratio: 12 Cash
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------------------------------------------------- Chapter 1 Solutions The Financial Statements ------------------------------------------------- Short Exercises (5 min.) S 1-1 Computed amounts in boxes | | | | | | | | Total Assets | = | Total Liabilities | + | Stockholders’ Equity | | | | | | | a. | $340‚000 | = | $130‚000 | + | $210‚000 | | | | | | | b. | 250‚000 | = | 70‚000 | + | 180‚000 | | | | | | |
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and other chemicals‚ such as resorcinol. The Midstream‚ Marketing‚ and Other segment gathers‚ treats‚ processes‚ transports‚ stores‚ purchases‚ and markets oil‚ condensate‚ NGLs‚ natural gas‚ and carbon dioxide. This segment also trades around its assets consisting of pipelines and storage
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Introduction Over the past years there have been many accounting measurement systems developed to replace or serve as a supplement to historical cost accounting. However it is not possible‚ at present‚ to state which system‚ if any‚ is likely to replace the historical cost system. Perhaps the most notable system is Continuously Contemporary Accounting (CoCoA)‚ proposed by Australian researcher‚ Raymond Chambers. Chambers quoted “…that thousands of shareholders had lost millions of dollars on security
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