ROE comparisons between StilSim and competitor. “Return on assets (ROA) is a measure of profit per dollar of assets” (book 449) The ROA is calculated by dividing the net income by total assets. “The return on equity (ROE) is a measure of how the stockholders fared during the year” (book 449). The ROE is called by dividing the net income by the total equity. In 2016‚ StilSim’s ROA was 2.1% and ROE was 2.7%. StaffAces ROA was 2.7% and ROE was
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KAI uses an inappropriate volume- based cost allocation method that causes inefficient resource allocation‚ disincentive among employees and reduced net income. To improve the existing method‚ Senior Management should consider reviewing the current situation to identify problems‚ followed by adopting an alternative cost allocation method. The current method allocates resource based solely on revenues‚ causing inefficient resource allocation. It lacks consideration of each branch’s difference in
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corporate governance and financial reporting. • Explain how financial statement users can evaluate the quality of a company’s reported revenue. Refer to the 2002 financial statements of Lucent Technologies‚ Inc. Concepts a. In your own words‚ define “revenues.” Explain how revenues are different from “gains.” b. Describe what it means for a business to “recognize” revenues. What specific accounts and financial statements are affected by the process of revenue recognition? c. When does
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sells for $195.00 and the Standard for $120.00. The purpose of this brief is to review the May actual statements and determine the June budgeted cash flow. To identify and understand the ending cash balance of Tyva (Datar & Schoenbeck‚ 2013). Review the product sales mix‚ comparison of the monthly budget statements for significant changes. Finally‚ a recommendation will be given on how the net income can be improved based on the analysis. Analysis Based on the June cash budget‚ what are the relevant
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overstated by $ 23‚500 for merchandise that Kirk’s Servistar hold on consignment. Therefore‚ the ending inventory in 2002 is $ 91400-$ 23‚500 = $ 67‚900 and the beginning inventory in 2003 is $ 67‚900. The correction of the 2002 and 2003 income statement is | | |2003 | | |2002 | | | |Sales | |$541‚200 | | |
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Membership Fee: $26 Part A: Amount of Variable Costs (VC) Required Sales – Variable Costs – Fixed Costs = Net Income 26(300) – VC(300) – 5460=0 7800 – 300VC – 5460=0 2340 = 300VC 7.8 = VC per Unit Variable Costs: 2340 Part B: What are the monthly sales in members and dollars with a target net income of $3640? Required sales in units = (Fixed Costs + Target Net Income)/Contribution Margin per Unit Required sales in dollars = (FC+TNI)/CM Ratio (5460+3640)/18.2 = 500 Memberships
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increase in monthly sales. If the sales manager is right‚ what will be the effect on the company’s monthly net operating income or loss? (Use the incremental approach in preparing your answer.) Requirement 2 (continued) Incremental method Variable expense ($14 per unit) Contribution Margin $340‚000 Sales increased 238‚000 VE increased 102‚000 CM increased Fixed Expenses 98‚000 Net Operating Income $4‚000 Sales (17000 units x 20) $70‚000/20 = 3500 units $189‚000/13500 = $14 per unit $90‚000 + 8
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2. Valuation methods...............................................................................................................3 2.1 Balance sheets – Based methods (shareholders’Equity) ...............................................3 2.2 Income Statement – Based methods..............................................................................3 2.3 Goodwill –Based methods.............................................................................................4 2.4 Cash flow discounting
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another an experienced salesman that is working for a base salary plus commission‚ they can grow the revenues even more. By having this person work on commission‚ this will eat into the profit margin for the materials he is selling. But the net impact to the BLC will be positive. I would advise Mr. Butler to select the LOC for up to $465‚000 because he can take out as little as he needs. He does not need all $465‚000 this quarter‚ but he may need some in the first and last quarters
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\ a. What evidence can you observe from analyzing the financial statements that might signal the cash flow problems experienced in mid-Year 14? There are a few factors that attributed to the cash flow problem in year 14. First‚ one of the most important areas that shows how liquid of a position a company has is by analyzing the difference in the current ratio and quick ratio over a period of time. The current ratio is current
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