Blake Romney Ethics Case, Unit 5 Ac330

In accounting there is much to be learned, about the financial aspects of a business. In the past five weeks I have learned the importance of financial reports and how they relate to the success of an establishment. These reports may include balance sheets and income statements, which help accountants and the public grasp the overall financial condition of a company. The information in these reports is really significant to, managers, owners, employees, and investors. Managers of a business can take and deduce financial

the company’s margins have shrunk by 10% in the past year due to rising costs and growing competition.

Macy’s Inc. ratio was .02 and JC Penny Co. Inc. was .00. To improve this ratio, both companies need to improve on their net income. If JC Penny doesn’t continue to improve its net income, then this ratio will begin to lean negative, signaling the company is losing money for every dollar is sales and may not be good investment. Macy’s Inc. still has room before it hits .00, however, if their net income continues to fall, they soon too may have the same profit margin ratio as JC Penny Co. Inc. Shutting down unsatisfactory stores – as each company is doing – may help improve this ratio as well. With less funding going to these stores, such as salary’s, rent, and wasted inventory, they will be able to improve their net income value.

There are at least 10 significant struggles and/or ethical violations discussed in the book. Read the book, choose three ethical issues or violations, and cover:

To consider this I will be looking at the Income Statement. If the company’s revenue exceeds its expenses it will report net income or will report a net loss. This will report on the success or failure of the company’s operation by reporting its revenue and expenses.

6. MB4 Profit and Loss Account 2: A worked example of your solutions to your identified problems in P&L1

In addition to affecting profits by adjusting useful life and depreciation; key ratios will also be affected. The net profit margin can be influenced both ways to fit the purpose of business strategy. It could be increased to make it seem more profitable, or it can be influenced in a negative way to write off as much expenses as possible – if the year held disappointing results – in order to show next year more positively in comparison.

Using a current example of an ethical issue, the definition of what an ethical issue is will be reflected upon as well as how the example case reinforces Plato’s’ quote.

So while the company increased its net income, it has done so with diminishing profit margins.

Overall, the profit before tax of the Manufacturing Group decreased 13.24%, and the Retail Group decreased 10.77%, for a total decrease of 11.28%. In simple terms, expenses have increased, profits have decreased, and Harrington Collection hasn’t performed very well over the last several years.

a. Identify the ethical dilemma faced by the CIO in this situation using the three normative theories of business ethics. Identify all stakeholders involved. How will each stakeholder group be affected by the decision taken by the management?

Profitability The company has come to a standstill with profits, in hopes to maintain a more efficient practice and continue expansion, Dynashears continued to borrow substantial amounts of working capital from the bank and ended up falling far short of the predictions for sales. The plant modernization project initially predicted a lot less money as well – and the additional funds requested put a strain on the ability to make profits. The gross profit margin dropped from 22% to14, when the projections hoped it would actually increase. The health of the company is in decline, and now has a slightly

- The financial statements for the past three years show a decline trend in both the operation and return on shareholder of the company, so a closer look at the factors contributing to this decline is needed.

Some companies cut off their controllable cost for specific period of time when sales decline. As an example Research and Development cost can be shifted down. Shifting of discretionary costs over the period may not be a good sign for quality of earning. But still company may have good reason.

The amount shown on the income statement under discontinued operations is the profit made during the period from the businesses that will not be a part of the company in the future. The net profit for the year of Reed Elsevier is higher almost by 50% due to the profit made from discontinued operations. The net profit of the Thompson Corporation has also grown by almost 4 times, which is also due mostly to the earnings from discontinued operations.