main desire is profit maximisation. In reality firms are most likely run by managers and not by the owners. Because of this there is a lack of goal congruence between the two. Baumol (1959) suggests that manager controlled firms are more likely to have sales revenue maximisation as their main goals rather than profit maximisation favoured by shareholders. He shows that there are several explanations for the managerial emphasis on sales maximisation rather than maximising profits: sources of
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rate of gross profit is same in each case. Prepare Departmental trading account. 10. From the following particulars prepare a branch account showing the profit or loss at the branch. Opening Stock at the branch 15‚000 Goods sent to the branch 45‚000 Sales 60‚000 Salaries 5‚000 Other expenses 2‚000 Closing stock could not be ascertained but it is known that the branch usually sells at cost plus 20%. The Branch manager is entitled to a commission of 5% on the profit of the Branch
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1. Identify all the accounting policy changes and accounting estimates that Harnischfeger made during 1984. Estimate‚ as accurate as possible‚ the effect of these on the company’s 1984 reported profits. Changes that affect the Harnischfeger Revenues: • The company started to account Kobe Steel sales in US‚ previously it only added the gross margin in the financial statement. (this sales represented $28 million) • Sales to a foreign subsidiary started to be consolidated as a net revenues (this
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Analysis of profitability‚ liquidity and performance The profit of a business is the difference between its revenues and its costs. It is important to consider two main types of profit: 1. Gross profit - this is calculated by deducting the cost of sales of a business from its sales revenue (turnover). 2. Operating profit - is calculated by then taking away overhead expenses from gross profit. Given the above figures it is possible to analyse the profitability of Better Hotels Plc in the two
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Good to Great by Jim Collins Report As the name implies‚ the author of the title “Good to Great‚” embarked in a research study to try to discover what made some companies outstanding‚ persistent‚ and sustainable from their competitors. The author makes a clear distinction that the publication of the title is not meant to fill in the holes left behind on one of his previous titles‚ “Built to Last.” In fact‚ towards the ending of the research novel‚ the author states that if someone is going to
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Year 10 Revision guide A292 Business and People 1. Explain two reasons why businesses exist - use relevant examples to illustrate your answer. Businesses exist because without them many people would be unemployed because businesses supply many people with jobs‚ this is crucial because it gives money to the workers and enables the workers to pay for there family’s. Businesses exist because create products that are needed in daily life for example “Dell” creates laptops and desktops
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paid for products/services = $80‚000 Total Economic Costs: Implicit Costs + Explicit Costs = $70‚000 + $80‚000 = $150‚000 b) Economic Profit: Total Revenues – Total Economic Cost = $175‚000 - $150‚000 = $25‚000 c) Accounting Profit: Total Revenues – Explicit Costs = $175‚000 - $80‚000 = $95‚000 d) New Implicit Costs = $500‚000 x 20% = $100‚000 Economic Profit: $175‚000 – ($100‚000 + $80‚000) = $ (5‚000) Chapter Two Technical Problem 1 Qd = 600 – 4PA – 0.03M – 12PB + 15F + 6Pe + 1.5N
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Harrah’s Entertainment‚ Inc : Rewarding Our People -Jeba Nadar - 037 -Sumaira Patel - 039 Business Strategy : To convert product based company to marketing based company Competitive Advantage : Customer loyalty PORTERS ANANLYSIS: 1. Threat from buyer - NA 2. Threat from supplier - NA 3. Threat from substitutes - High 4. Threat from competitors - High New Facilities ‚ Imitating Harrah’s strategy through technological advancement‚ New attractions 5. Threat from new entrants - High
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passed‚ this was shown to ultimately be a very wise choice as the financial results would later show impressive results. These impressive results could be seen by looking at how the operating margins tripled and were able to maintain a 700M operating profit in succeeding years after the merger (starting in 2002)‚ operations expanded into 13 new countries‚ and that their sales reached a notable $417.9 million. Put this together with the fact that Unilever let Ben & Jerry’s continue to operate as an independent
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Shui Fabrics Case I. Statement of the Problem The company wants to improve or increase the annual return on investment. 10 years ago‚ the company ventured to China to lower labors costs of Rocky River Industries. It suffered money losing from the day it started its operations and interference from the Chinese government. Currently the annual return on investment of the company has been 5% for the past 3 years
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