Horizontal Analysis Horizontal analysis is one of the two main ways to analysis the financial statements of a business. This analysis provides a year to year look at the financial performance of the business being evaluated. The spreadsheet that is attached provides a horizontal analysis of years 6, 7, and 8 for the balance sheet and income statement for Competitive Bikes and Two Wheel Racing. The horizontal analysis can take into account either the dollar amount of the changes over the years or
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investing the cash into productive assets—low liquidity levels are also desirable to the firm. It’s up to the firm’s financial management staff to find a reasonable compromise between these opposing needs. 2. (LO2) The recognition and matching principles in financial accounting call for revenues, and the costs associated with producing those revenues, to be “booked” when the revenue process is essentially complete, not necessarily when the cash is collected or bills are paid. Note that this way
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Our talk is divided into 2 main parts: Ratio and Cash flow analysis. Firstly I will talk about how to measure and decompose ROE. Then Anuar and Kostas will look at another concepts of Ratio analysis and finally Min Xe going to explain cash flow analysis. And we will be glad to answer any questions that you may have at the end or during our presentation. Financial analysis is the examination of a business from a variety of perspectives in order to fully understand the financial situation
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1. A. Prepare the necessary entry to record Brookhaven’s February payroll. The entry will include deductions for the following. 02-28-xx Brookhaven Debit Credit Salary expense 50000 Social Security taxes Payable 2000 Medicare taxes payable 750 Federal income taxes payable 7500 State income taxes payable 2000 Insurance withholdings 500 B. Prepare the journal entry to record Brookhaven’s payroll tax expense. The entry will include the following Social Security
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5-7: 1) Break-even point in unit sales using equation method: SP (Q) – VC (Q) – FC = P 8Q-6Q – 5,500 = P 2Q – 5,500 = P 2Q = 5,500 Q = 2,750 In order to break even they need to sell 2,750 units 2) Break-even point in sales dollars using the equation method and the CM ratio: Profit = CM ratio * sales – fixed expenses Target profit = CM ratio * sales – fixed expenses CM ratio * sales = target profit + fixed expenses Sales = (target profit + fixed expenses ) / CM ratio Sales =
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WGU FINANCIAL ANALYSIS JET- TASK 1 December, 2013 Determining the current performance and future potential performance of a company is a complicated and lengthy process that requires the analyses of several aspects of their operations as well as their financial indicators. Standard industry financial indicators are used to measure against known success rates and will indicate the stability of a company in its current operations. Using the history and trend of these same indicators will
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Cash dividends is a distribution of cash to shareholders. For a corporation to pay a cash dividend, it must have all three of the following: 1. Enough retained earnings 2. Enough cash 3. A declaration of dividends On the declaration date, a company’s board of directors formally declares the cash dividend and announces it to shareholders. ● An entry is required to recognize the increase in cash dividends and the increase in the current liability dividends payable. Example: To
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Case 10-2 Eagle Impairment Case Question #1 Under IFRS’ International Account Standard No.36^15 an asset must be assessed for indicators of impairment at the end of each reporting period. The information provided for the commercial building in Italy does not say whether there are is an event or change in circumstances that indicate that book value of the asset may not be recoverable. Since there is no indicator mentioned, one possibility would be that no investigation of impairment take place and
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Circuit City (Extended Warranty) Case I feel of the three approaches to accounting for the extended warranty, approach Deferral of Revenue is best. My reasoning for this is because it allows you to view and potentially process the total transaction into two separate transactions making it easier to track and account for. This approach also gives you the potential to resell the warranty contracts to a third party provider if you find that the program is not profitable or does not conform to the
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Problem Set II ACC300 P2-6A A. Earnings per share. | | Earnings per share = Net income/Average No. of outstanding shares | | 2011-$2.00 = 60,000/30,0002012- $2.12=70,000/33,000 | | B. Working capital. | | Working capital = current assets - current liabilities | | 2011- 85,000 = 155,000-70,0002012- 113,000 = 188,000- 75,000 | | C. Current ratio. | | Current ratio = Current assets/Current liability | | 2011 :2.2 =155,000/70,0002012: 2.5 = 188,000/75,000 | | D. Debt
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