operation. The company ’s cash and cash equivalents consist of cash on hand and highly liquid debt securities with original maturities of three months or less. (p. 41) The company has changed their strategy from 2005 where their cash was generated from net earnings and improved working capital management as domestic segment merchandise inventory levels were reduced and merchandise payable increased. In 2006‚ cash was generated through net earnings plus adjustments for non-cash items. They also increased
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CHAPTER 6 Objectives Identify different types of long-term operational assets. Determine the cost of long-term operational assets. Explain how different depreciation methods affect financial statements. Determine how gains and losses on disposals of long-term operational assets affect financial statements. Explain how expense recognition for natural resources (depletion) affects financial statements. Explain how expense recognition for intangible assets (amortization) affects
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Cash Management Cash Cycle Factors that influence the desired level of cash Optimal cash inventories Short-term investment strategies The Manager Managing an entity’s Resources Cash Management Inventory Management Working Capital Management Investment in Human Capital Long-term Assets Accounts Receivable Resource Decisions Investment Decisions Operating Decisions Human Resources Decisions Life cycle effects‚ Business cycle‚ public events‚ etc. Recruitment‚ Selection Training‚ Productivity
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cash Budget: A document (or electronic spreadsheet) that shows the timing of cash flows into and out of the company. Pro Forma Statements: A projected income statement (for the next several months) and balance sheet (at the end of the forecasted time period). The Cash Budget One of the major functions of corporate finance is to anticipate the need for funds in the company. Although there are several methods for forecasting these needs‚ the cash budget is the most accurate (and most commonly
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CHAPTER 2 CASH FLOWS AND FINANCIAL STATEMENTS AT SUNSET BOARDS Below are the financial statements that you are asked to prepare. 1. The income statement for each year will look like this: Income Statement 2008 2009 Sales $190‚119 $231‚840 Cost of goods sold 96‚952 122‚418 Selling & administrative 19‚067 24‚886 Depreciation 27‚370 30‚936 EBIT $46‚730 $53‚600 Interest 5‚950 6‚820 EBT $40‚780 $46‚780 Taxes (20%) 8‚156 9‚356 Net income $32‚624 $37‚424 Dividends
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Profitability Ratios: How Profitable is the Company? Net sales/Net profit after taxes The information necessary to determine a company’s profit as a percentage of sales can be found in the company’s income statement. 1. Magnetronics’ profit as a percentage of sales for 1999 was $1‚307 divided by $48‚769‚ or 2.68%. 2. This represented a decrease from 3.6% in 1995. 3. The deterioration in profitability resulted from a decrease in cost of goods sold as a percentage of sales‚
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Assignment: Cash Flow Preparation JoBeth Murphy University Of Phoenix June 12‚ 2010 Complete problems 19‚ 21‚ & 27 on pp. 50 – 53 of Foundations of Financial Management. Identify whether each of the following items increases or decreases cash flow: * Increase in accounts receivable - decrease * Increase in notes payable - decreases * Depreciation expense - increases * Increase in investments - decreases * Decrease in accounts payable - decrease * Decrease
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Receivables Turnover According to the table that shows Gamma turnover is 5.8 times and it’s mean Gamma collect his receivables about 5.8 times each year but alpha turnover is 1.4 times and it’s mean that alpha collect his receivables about 1.4 times each year. So‚ Gamma Corporation has higher proportion than Alpha Corporation and it shows that gamma corporation operates more efficiently with smoother cash flow and collects the money from the creditor easily and on the time. Also‚ that probably gathered
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Full Disclosure Paper: Starbucks This paper will discuss the disclosures contained in Starbucks’ financial Statements that are related to cash and cash equivalents‚ receivables‚ and inventories. This paper will identify the components of their cash and cash equivalents. The original name of the company was Starbucks Coffee‚ Tea and Spices which later on was changed to Starbucks Coffee Company. Starbuck was staring in 1971; they were located at Seattle’s Pike Place Market. Starbucks is
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merchandise inventory valued at P45‚000 to start with his business. GJ Cash in Bank 1‚000‚000 Merchandise Inventory 45‚000 E. Detoya‚ Capital 1‚045‚000 Initial Investment June 15 Purchased store furniture and fixtures for cash from Ayala de Cebu costing P150‚000 plus VAT of 12%. Issued Check No. 48501 covered by Check Voucher No. 001. CDJ Store Furniture and Fixtures 150‚000 Input Tax 18‚000 Cash In Bank 168‚000 Store Furniture and Fixtures purchased for cash July 4 Obtained
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