On February 2‚ 2010 Kraft and Cadbury‚ two leading firms in the snack industry finalized their merger decision after five months of negotiation. In this report we will examine why it made strategic sense for the two companies to combine and evaluate the performance of the combined companies since its merger. In particular we will analyze the post-merger financial statements and highlight a few points regarding the accounting. INTRODUCTION OF KRAFT AND CADBURY Kraft Foods Inc. (KFT) is the
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Research – TMA03 - B120 Income statement (also referred to as profit and loss statement (P&L)‚ revenue statement‚ statement of financial performance‚ earnings statement‚ operating statement or statement of operations)[1] is a company’s financial statement that indicates how the revenue (money received from the sale of products and services before expenses are taken out‚ also known as the "top line") is transformed into the net income (the result after all revenues and expenses have been accounted
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operating results of the company. The most prevalent of these are operating margin and net income margin. Please see below for the trends of the three. Operating margin is computed by taking operating income and dividing it by revenue and net income margin is computed by taking net income and divide it by revenue. [pic] From the chart we can see that there is a declining trend in both operating margin and net income margin in Year 13 and 14. Management should have determined that there were significant
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Summary for Legends on the net by Fernback Legends on the net by Jan Fernback‚ he argues that the oral cultural has been changed from past to contemporary. He says that‚ orality and literacy becomes less important because of human develop the cyberspace. Today‚ in our society people need to use internet because we are using it everywhere and it becomes part of our culture. In addition‚ the author says that‚ oral tradition has been warning for community living. Fernaback agues that‚ urban legend
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Explain the difference between a cash basis and accrual basis measure of performance. Why‚ in most cases‚ does accrual basis net income provide a better measure of performance than net operating cash flow? Explain the purpose of adjusting entries as they relate to the difference between cash and accrual accounting. Requirement 1 From the Liberty University on-line library I was able to obtain an article called “Cash vs. Accrual Accounting” (Cantu‚ October 2012). This articles gives examples
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months showing a profit and some months showing a loss. The company’s contribution format: • Income statement for the most recent month is given below: Sales (13‚500 units at $20 per unit) . . . .... $270‚000 Variable expenses . . . . . . . . . . . . . . . . . . . . 189‚000 Contribution margin . . . . . . . . . . . . . . . . . . . 81‚000 Fixed expenses . . . . . . . . . . . . . . . . . . . . . … 90‚000 Net operating loss . . . . . . . . . . . . . . . . . . . . $ (9‚000) 2 Requirements • 1.
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burden of justification is on the entity. To report higher net income is not justification! CHANGE IN AN ACCOUNTING PRINCIPLE (General Rule): Use the Current or Catch-up Approach by: a. Reporting current results using the new basis. I.e.‚ use the new method to determine income‚ balance sheet‚ etc. b. Reporting the cumulative effect of the adjustment in the current income statement between the captions "extraordinary items" and "net income". c. Presenting prior period financial statements as previously
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LinkedIn Case Analysis Executive Summary LinkedIn Corporation went public on the New York Stock Exchange on May 18th‚ 2011. The Initial Public Offering documents listed the stock at $45 per share. It started trading the next day at an opening price of $83.20‚ peaked at $122.70‚ and closed at $94.25. This was an increase of 109.44% over the IPO price. Almost two years later‚ the stock has had its low points‚ but still its market price remains well above the value calculated by many analysts
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to sign-on to AOL for 100 free minutes as an asset on its Balance Sheet. In accounting‚ we say that the costs were "capitalized‚" meaning reported on the Balance Sheet as an asset. This is in contrast to the costs being "expensed‚" flowing to the Income Statement immediately as an expense. The asset‚ Deferred Subscriber Acquisition Costs was amortized‚ beginning the month after such costs were incurred‚ over a period determined by calculating the ratio of current revenues related to direct response
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for power is $4.70‚ and the cost per revenue hour for operations hourly personnel is $24.00. Continuing with the analysis a contribution margin income statement has been created to determine the potential profits Salem Data Services could earn assuming the intracompany usage was 205 hours. Examining this income statement‚ operating income is a net loss of $30‚014 (see Exhibit 1). This shows a 5% decrease in revenue hours‚ as related to intracompany hour’s reduction‚ will result in a 27%
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