The checklist was utilized by reviewing each individual indicator one-by-one (33 in all) and parsing together information from various sources (discussed in further detail below); to address each of the indicator questions. The tool was useful in that it provided us a way of delving into areas and factors of Youth on their Own that we may not have realized without the tool. For instance, the inventory question (indicator 15) led us to look more in-depth, into the financial details regarding Youth on their Own (YOTO)’s “Resale Home Store” in order to determine how exactly they managed and documented inventory, and tracked their sales. While this proved slightly challenging with the information that was available online, we did end up …show more content…
However, helpful these statements are - there are still several indicators (and their associated questions) which needed to be addressed by other means. A secondary source of information utilized while reviewing the checklist tool was the collection of governing board minutes, which are posted dating back to the beginning of calendar year 2014 (January 2014). The board appears to have regularly-scheduled monthly meetings, and takes detailed minutes of each of these meetings. While some of the indicator questions cannot be answered directly (even using these board minutes in addition to audited financial statements), many can be inferred from these documents. For instance, it does appear as though there is a level of financial expertise that is quite impressive for this board, as shown by the minutes from a May 2016 board meeting (YOTO, 2016): “The goal is to keep two months of operating cash in the bank. We look for 7% return on investments (4% in cash flow and 3% in growth in stocks). An additional source of capital we have if we ever need it, is the real estate that we own (long-term assets).” With this level of financial acuity on the board, we are able to infer that some of the routine (or required) financial processes such as keeping (and adhering to) fiscal policies and procedures (indicator 16) occurs, or that cash is able to be reconciled on a monthly basis (indicator 9).
Companies’ Solvency, Liquidity, And Profitability Based On Current Ratio, Return On Sales, Earnings Per Share (EPS), Debt Ratio, And Price Earnings
EEC calculated the amount of time involved the anticipation of its cost ($3 million). The timeline in recovering their cost of investment ($2 million) initially for the foundation of this investment any profit made in the future of this investment will be justified as a profit for the company. If EEC can anticipate a fast return on its investment it is a profitable wise decision in making the investment financial, it is considered to be an easier way of formulating investments financially. On the basis of one year all cash flows is added together equal to the sum of $2 million originally invested, then it is divided by the annual cash flow of $500,000. The calculation of the payback period would equal four years. After this time frame any financial proceeds will be considered profitable for the company. I conclude that the timeframe is adequate in comparison of the investment in this worthwhile investment financial venture for the company.
j. One of Go-Go’s primary strategies is to achieve consistent growth. The capital budgeting policy indicates a required payback period of 24 months or less and an internal rate of return that exceeds cost of capital by 6% for all new investments.
Capital structure long term is looking at how assets for the business should be paid for. Through the article the common theme is to more efficiently change working capital into cash that can be used to pay for the debt and liabilities for the business. By converting the working capital into cash, the business can make payments without having to take out an extra loan or take on more debt for the business. The working capital management is evaluating the day-to-day finances of the firm and how to make sure it is paid for. Again converting working capital into tangible resources that can be used to pay for the firm is key to covering the businesses operating expenses day to day in this economy. It is more profitable for the company to do this. This will not change the overall total value of assets, but it would shift assets from being fixed into being current. Having more current assets creates a larger net working capital for the business, which is beneficial to them. Determinants of the businesses growth include total asset turnover and the dividend policy. The total asset turnover will be increased if the tips in this article are complied with. This is because having current assets that can and will be used increases this amount. The dividend policy is about choosing how much to pay shareholders versus reinvesting
Whole Foods is most likely to finance the investment project through equity and debt. The corporation is taking on a capital budgeting project which involves planning and managing long-term investments. The financial manager studies the investment opportunities that would guarantee the company future success. Financial managers help the company to analyze how much cash they expect to receive and when they expect to receive it. In this type of project usually, the value of cash flow generated by an asset exceeds the cost of that asset. Calculating the size, timing, and risk of future cash flows is the core of capital budgeting. In the balance sheet, many items would be affected, long-term assets which include property, plant, and equipment
Closing entries is the last part to closing accounts for any type of business. This will allow a company to ready itself for its next fiscal year. When doing so, a business must transfer balances in revenues and expenses to an income summary to the retained earnings account. This will reset all temporary accounts to zero permitting new transactions to occur for the next fiscal year. This lets businesses to compare balances from year to year; in return, they can make necessary adjustments in their business decisions. (Editorial Board, 2012, p. 52-53)
Over winter break I decided to help out my grandma’s community. By helping out her community for 2 hours, I volunteered at a local shop called The Resale Barn. The Resale Barn is a shop that realize on volunteers and all the money goes back to a non profit organization. While spending time there I learned how to tag clothing which was a crazy hard process. Also was taught how to fold clothes the way the stores do to make clothes look nicer. At the end of the 2 hour period I was able to say that I can tag clothes and fold them very nicely so if I ever work in retail it will not be as hard to learn again.
The mission of T & T Real Estate, LLC is to establish a portfolio of income producing real estate assets over the next 15-20 year that will produce supplemental income for retirement to the two principal owners. The principals of T & T Real Estate, LLC will manage the company in a conservative approach that will allow them to maintain their current full time employment. The company will seek to invest in one to two properties per year. To acquire the capital needed for reinvestment T & T Real Estate, LLC will seek to purchase residential properties that have the potential to generate an immediate return on investment after rehabilitation and will be resold. Those proceeds will then be used to supplement the investment of a second property that be rented as an income producing asset all the while
The most important thing is that, according to our estimation, the next five-year we will get additional funds needed increasingly with no surplus funds; which means, our assets increase faster than our liabilities. Therefore, our company goes well in the short term future based on this model. In conclusion,
The historical roots on Return on Investments (ROI) have an extensive historical background which involves the Du Pont system. It is significant to illustrate the major history behind the Return on Investments (ROI) and how the Du Pont system started. The purpose of the Return on Investment (ROI) is to evaluate the efficiency of an investment or compare the efficiency of various investments. In addition to (ROI) share the common class of profitability ratios. Several examples will show how Return on Investments (ROI) and the Du Pont system has established life-long formulas to help indicate growth or decline on financial investments.
Granny’s Greenhouse does not perceive a need to fund the project by issuing bonds or stocks. Based on the projected net income, Granny’s will have positive cash flow of almost $66 thousand already by the sixth month of operation. In other words, retained earnings will be more than enough to fund business operations. Assets will increase within the first year and surplus funds will be invested conservatively to draw on when needed. Due to high margins and a strong contract with Whole Foods guaranteeing that the tomatoes will be purchased; the bank is willing to finance the operation even in today’s difficult climate. (Priest, 2013)
The four components of its financial strategy are steady with this growth objective. Its growth objective is to remain a leading growth company and developing appropriate investment
you know you want to sell your home and you're thinking man if I could just sell this myself that would be twenty five thousand dollars I get to keep in my pocket then that little voice in your head or your spouse or your friends or whoever tells you that you don't even know what you're doing and of course technically you don't now I said technically well here are the facts of all the homes sold each and every year nine percent are sold by the owners what does that tell you it tells you it can be done nothing happened to these people and no one got ripped off all of these folks just saved tens of thousands of dollars on commissions but the truth is most of these people will probably admit to some of the difficulties that come along with
One of the critical problems confronting management and the board of Pioneer Petroleum Corporation was the determination of a minimum acceptable rate of return on new capital investments, The company’s basic capital budgeting approach was to accept all proposed investments with a positive net present value when discounted at the appropriate cost of capital. At issue was how the appropriate discount rate would be determined.
Capital: The bank needs to know what assets the organization owns that can be quickly turned into cash.