Credit Union Corporation Case

Be Our Guest’s balance sheet shows good signs of liquidity. Current Ratios for the past four years have remained above 1 proving that the company can handle its current liabilities. The current ratios are not extremely high (19941.27, 1995- 2.17, 1996- 1.15 and 1997- 1.16), but they can cover the current liabilities. It is important to note that the company is operating on a thin line because the current assets are barely covering the current liabilities. This is particularly unpleasant because we are dealing with a company operating in a seasonal business. It is a concern that the current ratio slightly eroded after 1995, and this is primarily due to Be Our Guest converting the bank line into long term debt in

The organization selected for analysis and evaluation is American Lake Credit Union. This organization is composed of two main branches, both located in Tacoma, Washington. In contrast to banks, Credit Unions are smaller organizations and are directed by members who are selected via a vote to serve in an all-volunteer board of directors for the organization (Scott, and Johnston, p.2, 2011). Specifically, this credit union was founded in 1948 and has grown since then. (C. Fitzer, personal communication April 7, 2014). For instance, although the organization is small in size through a partnership with a credit union network, it is able to provide general financial services at diverse locations

Another concern identified, is the utilities expense budget for utilities in Year 9 which is $150,000. This amount is identified as a fixed amount and is unrelated to actually production activities and manufacturing efficiency. Considering that production levels and activity fluctuates throughout the year, the budget for utilities should be a variable item. An example; from Year 7 to Year 8, the utilities expenses increase by $15,000 and with this detection, ways to reduce this expense should be investigate. Another concern is a duplicated line item under the Selling, General, and Administrative Budget for Utilities and Utilities and Services. Another issue for concern, Total Variable Cost was reported to be lower; however was not enough for the lack of sales combined with an increase in advertising and transportation which resulted in an overall negative result. The low Net Sales directly impacted the Contribution Margin which decreased by $49,397. Overall, these concerns indicate the need for a flexible budget with variance analysis.

* The report to be written such that it can be understood by a person with limited understanding of financial analytical tools. Furthermore, the report is to be no more than 600 words and it should include sections: Summary, Methodology, Recommendations and Limitations.

As the financial analyst of the company, this report is written in respect to how the financial position of the company can be improved. This report is aimed for the senior management team.

Upon accepting the job offer with the credit repair company “a contract of employment was established” (Ashcroft & Ashcroft, 1999, p. 315). Within the initial employment contracts was a confidentially agreement. It seemed like a reasonable request, “that part of the job duties were to maintain confidentiality of trade secrets” (Ashcroft & Ashcroft, 1999, p. 320). The rest of the employment contracts seemed fairly balanced. Since employment is “at-will” meaning “that the employer in this case the credit repair company, can terminate an employee at any time for any reason, with the exception to the reasons found illegal or for no valid reason” (National Conference of State Legislatures, 2015) and the employee was “free to leave a job at any time for no reason with no adverse legal consequences” (National Conference of State Legislatures, 2015) there was no cause for concern when signing these forms. However the job was no longer considered “at-will” when the employer broke “public policy due requesting the employee to perform an act that state law prohibits” (National Conference of State Legislatures, 2015). The company intentionally preyed on the naïve

Also, according to its leverage ratios, the company’s debts are not only very high, but are also increasing. Its decreasing TIE ratio indicates that its capability to pay interests is decreasing. The company’s efficiency ratios indicate that despite the fact that its fixed assets are increasingly being utilized to generate sales during the years 1990-1991 as indicated by its increasing fixed asset turnover ratio, the decreasing total assets turnover indicate that overall the company’s total assets are not efficiently being put to use. Thus, as a whole its asset management is becoming less efficient. Last but not the least, based on its profitability ratios, the company’s ability to make profit is decreasing.

Note , Bank 247,000 Note, Stark 157,000 Accounts payable 343,000 Accrued expenses 51,000 Long-term debt, current portion 7,000 21 21 Long-term debt 43,000 50 50 Total liabilities $848,000 61 61 86 86 21 21 Projected Income Statement for Year 2011 (thousands of dollars) 2011 (P) net sales 3,600 cost of goods sold beginning inventory 418 purchases 2,736 76% 3,154 ending inventory 562 total cost of goods sold 2,592 72% gross profit 1,008 operating expenses 900 25% operating profit 108 purchase discount

A C corporation has to report ordinary income or loss in the C corporation’s tax return.

Rapid Repair’s profitability appears good but their cash balance has shrunk. Write a report that provides a financial analysis

The company entered into dubious transactions, especially with Doug Mather. This helped contribute to the cash flow problems. The company needs to avoid these transactions in the future.

In our opinion, with proper use of analytical procedures Ernst & Whinney should have detected the overstatement of the leased assets. The following analytical procedures should have been used, at least at the planning and overall review stages of the audit.

Loans at the time were nonamortizing and required a balloon payment at the expiration of the term. Mortgages were available to a limited client base, with home ownership representing about 40 percent of U.S. households. Many of these short-term mortgages went into default during the Great Depression as homeowners became unable to make regular payments or find new financing to pay off balloon payments that became due. The United States government intervened in the housing market in 1932 with the creation of the Federal Home Loan Bank (FHLB). The FHLB provided short-term lending to financial institutions (primarily Savings and Loans) to create additional funds for home mortgages. Congress passed the National Housing Act of 1934 to further promote homeownership by providing a system of insured loans that protected lenders against default by borrowers. The mortgage insurance program established by the National Housing Act and administered by the Federal Housing Administration (FHA) reimbursed lenders for any loss associated with a foreclosure up to 80 percent of the appraised value of the home. With the risk associated with default on FHA-backed mortgage loans reduced, lenders extended mortgage loan terms to as long as 20 years and LTVs of 80 percent. In 1938, Federal National Mortgage Association (FNMA) was established

This comprehensive paper will analyze the financial standing of PNC Bank. In the first part o we will look at PNC Bank’s profile, mission statement and future direction. An analysis of PNC’s strengths and weaknesses based on PNC’s financial statements and ratios will be conducted. PNC will also be compared to the industry and to Bank of America. The Federal Reserve interest rates over the past five years will be correlated to PNC’s Net income for the same timeframe. The analysis will conclude with my forecast for PNC’s future profitability.

The results of the company’s return on assets ratio measuring profitability overall was 7.2% in 2010 and 8.1% in 2011 having an increase of 0.9%. Return of common stock ratio that portrays the