...Unit 4-Long-Term Financial Management JO September 5, 2013 Financial Management/310 American InterContinental University Abstract A manufacturing company is thinking of launching a new product. The company expects to sell $950,000 of the new product in the first year and $1,500,000 each year thereafter. Direct costs including labor and materials will be 55% of sales. Indirect incremental costs are estimated at $80,000 a year. The project requires a new plant that will cost a total of $1,000,000, which will be depreciated straight line over the next five years. The new line will also require an additional net investment in inventory and receivables in the amount of $200,000. Assume there is no need for additional investment in building and land for the project. The firm's marginal tax rate is 35%, and its cost of capital is 10%. Table of Contents Introduction………………………………………………………………………………………..4 Incremental Cash Flow……………………………………………………………………………4 Payback Period…………………………………………………………………………………….4 Conclusion………………………………………………………………………………………...5 References…………………………………………………………………………………………6 Introduction An incremental cash flow statement will be prepared for a project over an 8-year period. This paper will also calculate the Payback Period (P/B) and the Net Present Value (NPV) for the project (Brooks, 2012). Incremental Cash Flow |Year ...
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...The Impact of Financial Education in High School and College On Financial Literacy and Subsequent Financial Decision Making by Lewis Mandell Kermit O. Hanson Visiting Professor of Finance and Business Economics Foster School of Business, University of Washington Senior Fellow, Initiative on Financial Security, Aspen Institute Presented at the American Economic Association Meetings San Francisco, CA January 4, 2009 The Impact of Financial Education in High School and College On Financial Literacy and Subsequent Financial Decision Making Abstract: Many consumers appear to lack the financial literacy needed to make financial decisions in their self-interest. A growing number of analysts and politicians are blaming the intersection of low levels of financial literacy with complex, financially-engineered products for the current economic meltdown and have proposed a number of solutions to this problem. These solutions range from mandatory education in personal finance to required simplification of financial products and greatly increased regulation. This paper examines evidence on the effectiveness of personal finance education on both financial literacy and financial behavior. If the problem can be solved through education, it is likely to reduce the perceived need to limit choice in the marketplace for retail financial products. If education is shown to be ineffective, the future of financial product innovation and financial engineering may be greatly limited. Supporting...
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...MGT 521 Complete Week 5 To Buy This material Click below link http://www.uoptutors.com/MGT-521/MGT-521-Complete-Week-5 MGT 521 Week 5 DQ 1 How could benchmarking be effectively used to achieve competitive advantage? Provide an example MGT 521 Week 5 DQ 2 One standard corporations use to evaluate their performance against their competitors is the set of rankings developed by Fortune magazine. These include the Fortune 500, the 100 Best Companies to Work For, and other lists. The public also uses these rankings to decide to what companies they should give their business; however, should they? Is there an intrinsic value in these rankings, or are they subjective? Should a business set a specific ranking on a list like this as a standard to be met? Support your assertions. MGT 521 Week 5 DQ 3 The text states that a multinational corporation may need to adapt its control measures across the different locations where it operates, to ensure each measure is relevant in each location. Given this, how can a manager at the home office recommend appropriate actions to reduce performance gaps for the other locations? Is this possible? Explain and support your answer. MGT 521 Week 5 DQ 4 How has the Sarbanes-Oxley Act (SOX) changed the system of corporate governance in publicly traded organizations in the United States? How has SOX adjusted the decisions managers must make when recommending actions to reduce performance gaps? MGT 521 Week 5 Individual Team Leadership Your...
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...Recognized Courses in Accounting/Tax Research and Analysis and Accounting/Business Communications September 3, 2014 The Texas State Board of Public Accountancy requires each candidate to complete a minimum of two semester hours in accounting research and analysis or tax research and analysis from a recognized college or university. The semester hours may be obtained through a discrete course or offered through an integrated approach. If the course content is offered through integration, the college or university must advise the Board which course(s) contain the research and analysis content. Courses identified through integration must dedicate 1 semester hour, or quarter hour equivalent, to research and analysis. Courses used to meet this requirement may not be used to meet the requirement for accounting or business communications described below. Course(s) identified by a university to meet the requirements for research and analysis in accounting or taxation should primarily address the identification, organization, and integration of diverse sources of information such as authoritative literature and pronouncements, to reach a conclusion or make a decision; and should analyze accounting and taxation issues by reviewing information, using empirical data and analytical methods, recognizing data in patterned activities, forecasting, and integrating data. CPAs may be asked to conduct research and analysis when providing attest services, professional accounting...
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...MGT 521 Week 5 Individual Knowledge Check To Buy This material Click below link http://www.uoptutors.com/MGT-521/MGT-521-Week-5-Individual-Knowledge-Check 1 . The control process assumes that ________. • A. employees require clear directions from management • B. employees are underqualified and require training • C. specific goals for performance were already created during the planning process • D. employee monitoring costs are part and parcel of doing business 2 . An example of control criteria that can be used in any situation is ________. • A. number of calls taken per day • B. employee satisfaction • C. average time to process paperwork • D. client requests completed per hour 3 . In reviewing the result of the control process, managers could choose to avoid taking action when ________. • A. an employee fails to attain the standard because of internal problems • B. the variance between actual performance and the standard is acceptable • C. performance standards are acceptable, though the employees have not attained it • D. the variance observed from the expected performance is caused due to unrealistic standards 17 . If a manager rationalizes that he does not have time to investigate the source of a problem and instead resorts to “putting out fires,” the manager is missing the use of ________. • ...
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...Audit Problems ACC 623 Test 1 Review I) Intro to Auditing a. The Need for High quality Information: i. Financial information is relied upon by investors to make their investment decisions, creditors to make lending decisions, and by other parties that include vendors, customers, and potential merger or acquisition partners. It is extremely important that this information be reliable since significant sums of money are at stake in these investment and lending decisions. ii. A user of the financial statements of an entity who views the information they obtain as being low quality, or risky, will demand a higher return for his or her investment in that entity. 1. Risk premium: the difference between the return demanded by the investors and the return that would be demanded in the absence of any associated risk iii. Low quality information can be caused by either intentional or unintentional misstatements of that information. 2. Unintentional misstatements in the financial statements often occur due to weak internal controls, unqualified staff, human judgment errors, or lack of attention to detail in the financial reporting process. 3. Mgt, who prepare the financial statements, have significant incentives to intentionally misstate the financial statements to make the company appear more profitable than it is a. Moral hazard: situation in which one party gets involved in a risky event...
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...Secondary data from the Ghana Stock Exchange on manufacturing companies within the Accra metropolis was used to examine whether working capital management influence the profitability of manufacturing companies in the country. The study found out that, the major component of working capital management such as inventory days, account payable and cash conversion cycle have influence on the profitability of manufacturing companies. The study recommended that, manufacturing companies should adopt efficient and effective ways of efficiently managing these components of working capital management. KEY WORDS: Working capital management, profitability, net operating profit 1.1 INTRODUCTION Working Capital Management has become very important in financial management because of its effects on the firm’s profitability, risk and consequently its value. There are several important reasons why the management of working capital is important to both small and large organisations. (Smith, 1980). A well designed and implemented working capital management policy is expected to contribute positively to the creation of a firm’s value. (Padachi, 2010). Current assets of many companies, accounts for over half the total assets and are even higher in the companies in the distribution sector. (Horne and Wachowicz, 2009). However, a company is required to maintain a balance between liquidity and profitability while conducting it...
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...Nestor Santamaria MGT 324 Leopoldo Lopez October 22nd, 2012 TIRE CITY Assignment Present Condition of the Firm: Do a profile of Tire City's financial health by calculating the following ratios from 1993 through 1995 * Short Term Solvency or Liquidity: current ratio, quick ratio Short term solvency of liquidity ratios | | | | 1993 | 1994 | 1995 | current asset | 4683 | 5542 | 6548 | current liabilities | 2312 | 2882 | 3218 | Current ratio | 2.02551903 | 1.92297016 | 2.03480423 | | | | | | | | | Current asset | 4683 | 5542 | 6548 | Inventory | 1630 | 1838 | 2190 | current liabilities | 2312 | 2882 | 3218 | Quick ratio | 1.32050173 | 1.2852186 | 1.3542573 | * Long Term Solvency: equity multiplier, total debt ratio, interest coverage ratio Long term solvency ratios | | | | | 1993 | 1994 | 1995 | Total asset | 6580 | 7822 | 8983 | Total equity | 3268 | 4065 | 5015 | Equity multiplier | 2.01346389 | 1.92423124 | 1.79122632 | | | | | Total asset | 6580 | 7822 | 8983 | Total equity | 3268 | 4065 | 5015 | Total debt ratio | 0.50334347 | 0.48031194 | 0.44172326 | | | | | EBIT | 1445 | 1925 | 2209 | Interest expense | 119 | 106 | 94 | Interest coverage ratio | 12.1428571 | 18.1603774 | 23.5 | * Asset Management: total asset turnover Asset Management ratios | | | | | 1993 | 1994 | 1995 | Sales | 16230 | 20355 | 23505 | Total asset | 6580 | 7822 | 8983 | Total asset turnover...
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...FINANCIAL RATIOS Liquidity – determine company’s ability to pay off short-term obligations; higher ratio = higher margin of safety; important for creditors Working capital =current assets-current liabilities Current Ratio – also known as the working capital ratio; ability to pay liabilities with assets; can be bloated by obsolete or non-moving inventory =(current assets)/(current liabilities) Quick Ratio – strong indicator of whether a firm has enough short-term assets to finance immediate liabilities; should be greater than 1; increasing ratio is not necessarily good, may be an indicator that receivables are not being collected, or cash is idle =(current assets-inventories and prepayments)/(current liabilities) Cash asset ratio =(cash+marketable securities)/(current liabilities) Cash conversion cycle – also known as operating cycle; shorter cycle = more liquid working capital =days inventory+days receivable-days payable Efficiency – how well company uses assets and liabilities internally Asset turnover – indicaor of how well assets are utilized to generate sales for the company =(net sales)/(average total assets) Fixed asset turnover – indicator of how well fixed assets are used to generate sales for the company =(net sales)/(average investment in fixed assets) Inventory turnover – number of times the company is able to move their inventory in a year =(cost of goods sold)/invntory Days Inventory – average number of days before inventory is sold ...
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...Ethics and Strategic Planning MGT/498 Ethics Ethics within a strategic plan are a very important piece to the success of a business and that organization. The role that ethics and social responsibility play in developing a strategic plan as well as running a company in general is vast. In my opinion stakeholder needs and agendas while they may conflict with what is ethical or socially acceptable it is also something that the stakeholders want to see, a company that is ethical and socially responsible. I chose the financial industry to provide an example on for a time when ethics was questioned. While researching the financial industry, Wells Fargo stood out as one strong player in the industry. Wells Fargo is a nationwide, diversified financial services company with $1.6 trillion in assets. Founded in 1852, Wells Fargo provides banking, insurance, investments, mortgage, and consumer and commercial finance. They do business with one in three U.S. households. Clearly Wells Fargo is a top player in the financial industry and they have had both ups and downs in the questioning of their ethics. Ethical issues in the financial services industry affect everyone, because even if you don’t work in the field, you’re a consumer of the services. The public seems to have the perception that the financial services sector is more unethical than other areas of business, this misperception persists for several reasons. First, the industry itself is quite large...
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... natural charisma (lead by example) cf. Jack Welch :Brash, Impetuous, abrasive, feisty (dictatorship) Jeff, breakthrough in the CEO Factory? CEO Process Implementation Long Term Planning CEO Candidacy Programme for an emergency, 1994 CEO Candidates 24 survived Management Development and Compensation Committee Appraisal on Personality and ability(1-2 yrs) 8 Board members collective interviews Management Ability Test (3-4 yrs) Job rotation in divisions - One of final three candidates - designate backup Decision Merit (TO/Profits) check and CEO interview - young, expansive thinking Time consumed 6 years 5 months 1. Tracing Young Turks - Scanning high - potential cases 2. Global Mgt Capability - Leadership, Strategy - Human Resource 3. Crisis Capability - Adversity - Venture, New Area 4. CEO Candidate - CEO School - Competency 5. CEO Cultivation Team - Professional Support - Mentor by J. Welch Immelt’s Narratives • Repositioning the portfolio and diversification – From a process oriented company to creativity and fundamentals – Emphasizes organic growth rather than deals, divesture (Necessity after Welch’s era) • Innovation Management – “Imagination Breakthroughs” for sustainable growth • New Ethical policy (Core Value) and its connection to personnel - 8 Values and 4 Actions (‘Integrity’) • Changing the culture – Outsiders to high rank positions – Diversifying the top ranks – New executive...
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...Curriculum Vitae Name: Liu Ying Birth of Date: 22-07-1977 Telephone: 18910603097 E-mail address: cherry7987@gmail.com Education: Beijing Wuzi University (financial accounting); Beijing Language and Culture University (English, bachelor degree) Certificates: Certificate of Accountant Professional Professional Title: Accountant Working Experience: July 2011 to Present Global Data Solution Services Co., Ltd Position: Senior Manager Principal responsibility & Key Areas: Preparing consolidation statement and MD&A for Mgt Meeting & BOD Meeting Working with external auditor, assessor, lawyer and following the outstanding list Assorting with other departments and designing the process of the revenue recognition and AR collection Beforehand controlling the items of purchases contracts and sales contracts, assuring correctness of cost, revenue and financial statement Assorting relation between company and tax bureau, preparing the memo of FIN48 Working as finance SVP assistant October 2010 to June 2011 Beijing Top Grade Medical Equipment Co., Ltd Position: Senior Manager Principal responsibility & Key Areas: As coordinator to assort with audit for IPO in HK, and follow up audit schedule Assorting with other departments to complete Due Diligence of legal and finance Cooperating with each intermediary agencies, and completing...
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...Business Analysis III Robin Bailey MGT/521 July 22, 2012 Roberto Guzman Citigroup Citigroup is an institution which connects 1,000 cities, 160 countries and millions of people. The institution is considered a global bank and strives to serve individuals, communities, institutions and nations (Citigroup, 2012). 2010 was a turning point for Citigroup and the organization achieved one again the return of profitability. In each quarter of 2010 Citigroup posted a positive net income. Citigroup has shown a steady increase in profitability and posting a full year profit of $10.6 billion and a 14.9 billion profit in the core businesses that will determine the company’s future (Citigroup, 2012). In 2010 Citigroup was included in the Dow Jones Sustainability Indexes and the FTSE4Good Index for the ninth year (Citigroup, 2012). Citigroup has gone through several transitions within the last ten years in all markets that they are involved with. Citibank which is part of Citigroup was one of the first foreign banks that obtained licenses to conduct a limited range of commercial activities in China (Citigroup, 2012). The company has made reductions in workforce and the company has also had changes in structure which the company has to make these changes. The changes involve adaption in operational adaption to the changing markets. The change in structure is driven by trends within the organization. The first one is...
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...Apple Inc. Review MGT/521 Management Week Five Individual Assignment Apple Inc. has been noted as one of the most positive growing companies in the technology field today. The question is, How do we know this and how do we measure this? The answer is through three major financial business statements; The Income Statement, Balance Sheet, and Cash Flow Statement. All of these statements may seem to be redundant in what they portray but all of them are necessary in bringing to light the actual financial standing of any company. These statements are how a financial analyst can put together an honest analysis of the how the company is doing financially. Statements: The Income Statement for any company is a statement that shows the year-to-date profits and losses. In today’s world of the internet, it can be pulled as frequently as daily, weekly, monthly, quarterly, or just yearly. The balance sheet for a company gives a snapshot of the financial condition at any given moment but is usually generated at the end of an accounting time period (often at the end of the month or quarter). This sheet shows the assets, liabilities, and equity of the company to give a rounded idea of how the company is doing financially. A balance sheet is much like balancing a personal checkbook in that it is a way to log everything to do with the company including detailed costs and profits. The Cash Flow statement is another statement used to measure the amount...
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...CompanyAnalysis Group 14_Jonathan Hayes_Clint Halim Jonathan Hayes Fin201*02 Fundamentals of Financial Mgt. 12/17/15 Nike Inc. NKE $126.30 Dec. 13th Close 2. Nike Incorporated is the worlds largest producer of exclusively branded footwear, clothing and sports apparel such as cleats, shoes, socks, shirts, pants, etcetera. The logo for Nike was created back in 1971 around the start of the business. By the late 70’s Nike was evaluated at 210 million dollars. As of today Nike has surpassed revenues of over 30.6 billion dollars and continues to grow. Approximately 77 percent of Nike’s sales in the past year has been wholesale, with 23 percent accounting for direct selling to customers through the Nike webpage, as well as affiliate outlets. Around 64% of Nikes revenues are generated from sales of shoes. As you will see in the analysis Nike is steadily growing in the high single digit growth in revenues and earnings per share. Nike Inc. has 6 notable regions of distribution: North America (48% 2015 revenues), Western Europe (20%), Central & Eastern Europe (5%), Greater China (11%), Japan (3%), and emerging markets (14%). As far as retail distribution locations are concerned, Nike has 33 factory overstock outlets around the United States and 73 abroad employing 185 different operations factory stores in the United States, and 512 internationally. American labor by number of factory outlets account for 26.5% of the total production of goods. In the five...
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