Guide There are a few different categories of ratios included in KBR to assist you in determining the financial health of a company. Solvency Ratios – Six key ratios measuring financial soundness Efficiency Ratios – Five key ratios measuring asset management, suppliers, and equity Profitability Ratios – Three key ratios measuring profit according to sales, total assets, and net worth. Median Values & Industry Quartiles Solvency Ratios Solvency ratios measure the financial soundness of a business and
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ACCOUNTING STANDARD-2: ACCOUNTING STANDARD -2 VALUATION OF INVENTORIES PURPOSE: PURPOSE Specifies the principals for valuing the inventory. Disclosure of the specific policies adopted by the management for the valuation of inventory. SCOPE: SCOPE This statement should be applied in accounting for inventories other than : Work in progress arising under construction contracts, including directly related service contracts. Work in progress arising in the ordinary course of business of service
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Financial Management includes the following 5 functions * Financing function- raising capital to support firms operations and investment programs * Capital budget function- selecting the best projects in which to invest firm resources, based on a consideration of risks and return * Financial management function- managing firms interna; cash flows and its capital structure to minimize the financing costs and ensure that the firm can pay its obligations when due * Corporate goverance
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Finance Butler Lumber I: Butler Lumber’s financial problem is weak net cash flow; too much cash tied-up in inventory and debt obligations, which is reflected in liquidity, asset and debt management metrics. II: Cash flows from operations should exceed, be sufficient, to cover reinvestment in equipment and building. Specifically, expenditures for investment in Plant should exceed the annual depreciation charge. As well, funds from operations should not only be sufficient to invest, but
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technique for Merloni Elettrodomestici Spa Company across its all regional warehouses. Merloni had already implemented programs that had successfully shortened production-planning lead times and decreased inventory levels. To further reduce inventory and enhance production efficiency, management was evaluating a proposal to replace regional warehouses with "transitpoints". At these transit points, products arriving on trailers from the central warehouse and plants would then be transferred directly
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performance: With the help of ratio analysis conclusion can be drawn regarding several aspects such as financial health, profitability and operational efficiency of the undertaking. Ratio points out the operating efficiency of the firm i.e. whether the management has utilized the firm’s assets correctly, to increase the investor’s wealth. It ensures a fair return to its owners and secures optimum utilization of firms assets • It helps in inter-firm comparison: Ratio analysis helps in inter-firm comparison
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need to discover why. Inventories need to be looked at as well since the amounts have increased from the previous year. The finished goods inventory went from $1,175,500 in 2004 to $1,654,000 in 2005, the copper rod went from $1,650,000 in 2004 to $2,625,000 in 2005, and plastics inventory went from $182,000 in 2004 to $224,500 in 2005. The auditor needs to discover if the company has updated their standard costs because if they did not this may be the cause of the inventory price shift since values
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Chapter One – Using Objectives and Strategies Key Terms Corporate Objectives – The long-term goals of an organization. Corporate Strategies – The medium to long-term plans to achieve the corporate objectives of a business. Corporate Tactics – The short-term actions taken in a response to opportunities or threats and with the ultimate aim of achieving corporate objectives. Functional Objectives – The targets of each functional area of a business based around the corporate objectives. SMART
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CHAPTER 8 Valuation of Inventories: A Cost-Basis Approach ASSIGNMENT CLASSIFICATION TABLE (BY TOPIC) Topics 1. Inventory accounts; determining quantities, costs, and items to be included in inventory; the inventory equation; balance sheet disclosure. Perpetual vs. periodic. Recording of discounts. Inventory errors. Flow assumptions. 10, 11 7 12, 13, 16, 18, 20 4 5, 6, 7 Questions 1, 2, 3, 4, 5, 6, 8, 9 Brief Exercises 1, 3 Exercises 1, 2, 3, 4, 5, 6, 10 Problems 1, 2, 3 Concepts for Analysis 1
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a cost of $65. The purchase price paid by MPBC, per bicycle, is roughly 60% of the suggested retail price for all the styles available, and the inventory carrying cost is I % per month (12% per year) of the purchase price paid by MPBC. The retail price (paid by the customers) for the AirWing is $170 per bicycle. MPBC is interested in making an inventory plan for 2011. The firm wants to maintain a 95% service level with its customers to minimize the losses on the lost orders. The data collected for
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