Acc 400 Week 5 Team Assignment

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Week 5: E-text Learning Team Assignments ACC/400 Week 5: E-text Learning Team Assignments Financial Accounting: Tools for Business Decision Making, 4th edition Chapter 13: Communication Activity: BYP 13-7 Write a memo to R.J. Falk that explains the basis for comparison and the factors affecting quality of earnings. Memo To: R.J. Falk CEO From: Team B Date: May 24, 2010 Re: Financial Statement Analysis The purpose of this memo is to explain (a) the bases for comparison in analyzing Ventura financial statements and (b) the limitations, if any, in financial statement analysis. The financial statement holds pertinent information about the company, such as the financial status of…show more content…
[pic] Chapter 23: Exercise 23.12 a. What would do if you were the marketing manager at the Crunchy Cookie Company? Would you also understate sales projections? Defend your answer. The sales forecast is the basis for all the company’s budgets (e.g. production budgets, selling and administrative expense budgets, etc.). Understating the sales budget can have an adverse effect on the company as all the company’s budgets depend on the sales budget. Therefore, if the sales budget is understated the remaining budgets will follow suit. In the case of William George, marketing manager of Crunchy Cookie Company, understating the sales forecast is poor management style, an unethical practice, and can affect the ability to plan for future operations. First, assuming the Crunchy Cookie Company uses the behavioral approach to forecasting, the budgets should be within reason. Understating the sales forecast is equivalent to failing to meet reasonable expectations. Second, as mentioned previously because the sales budget is the basis of the master budget, understating a reasonable and achievable budget will have an adverse effect on production estimates, cash flow expectations, and inventory requirements. The marketing manager should not understate the budget for the reasons mentioned. Understating the sales forecast consistently may cause the Crunchy Cookie Company

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