Essay about Financial Analysis

Date: Name: ID: Answer the following Questions: 1. Tower Inc. owns 30% of Yale Co. and applies the equity method. During the current year, Tower bought inventory costing $66,000 and then sold it to Yale for $120,000. At year-end, only $24,000 of merchandise was still being held by Yale. What amount of inter-company inventory profit must be deferred by Tower? A. $6,480 B. $3,240 C. $10,800 D. $16,200 E. $6,610 2. All of the following statements regarding the investment account using the equity method are true except A. The investment is recorded at cost B. Dividends received are reported as revenue C. Net income of investee increases the investment account D. Dividends received reduce the investment account E.

1) Find the distribution and report the mean and the standard deviation of the uncertain revenue in $

The rules of debit and credit determine how to record increases and decreases. Debits are always recorded on the left side of a T-account and credits on the right side. Increases in assets are a debit and decreases are a credit. Increases in liability and stockholders’ equity are credits and decreases are debits.

Financial Analysis Task 5 Part B-Report to CEO B1. Custom Snowboards sales history has been steadily increasing per the table below. CSI has had small growth in sales with an equal increase in COGS. The COGS is relative to the increase in the net sales, however, CSI should look further into ways they can decrease their COGS line item in order to see more profit growth from year to year. We can see on the Horizontal Analysis below that net sales, COGS and Profit all had the same increases from years 12 to 13 and from years 13 to 14. This is indicative of CSI needing to do more cost based analysis to see where they can make production cost cuts and boost sales. Per the data, operating costs also increased alongside the net sales. Items such

2 3 4 5 6a 6b 7 Net rental real estate income (loss) Other net rental income (loss) 16 Foreign transactions

i. Consider the “Cumulative effect of change in accounting principle” reported on the income statement. Explain in your own words what item represents.

An individual stock's diversifiable risk, which is measured by the stock's beta, can be lowered by adding more stocks to the portfolio in which the stock is held.

Assume that interest in a new basis for cost accounting at Destin Brass Products remains high. In the following month, quantities produced and sold, activities, and costs were all at standard. How much higher or lower would the net income reported under the activity-transaction-based system be than the net income that will be reported under the present, more traditional system? Why?

3) Assume that the Village of Hannah uses the purchases method of inventory accounting. At the end of the year the inventory levels have increased. What entry would be made to

38) Which of the following funds is accounted for on the modified accrual basis of accounting?

(c) What were the components of total current liabilities on December 31, 2004 (otherthan accounts payable already discussed above)?

Vertical Analysis- In conducting the vertical analysis of the financial statements provided, I have found a few rather unfavorable results. First, I can’t help but notice that in 2014 Smith Enterprises has a measly 19% total assets in cash, and 20% total assets in cash in 2015. This may be a negative result of the company’s confined inventory by 22% in 2014 and 30% for 2015. If inventory is not being moved, there is no opportunity for cash, therefore, the cash account is being negatively affected overall. Next, when reviewing Smith Enterprises total liability, for 2014 the company’s total assets to total liability equals 50% in 2014, and 46% percent in the year 2015. While the total liabilities decreased by a total of 4% between 2014 and 2015, the company’s total liabilities are extremely unfavorable. By this I am expressing that 46% and 50% of how Smith Enterprises pays for their assets is with debt through accounts such as accounts payable, salaries payable, and notes payable. If the company were moving out inventory at a faster rate, the higher debt percentage may be justified as the company could pay off this debt quickly, but when tied up inventory is visible this leads me to believe that the debt percentage will stay within a few

2. The accounts effected would be regarding their sales such as revenue, cash, and accounts receivable.

and led to it’s eventual bankruptcy filing. These included liquidity, default rate, and forms of

An American call option gives one the right, but not an obligation, to buy a specified number of shares of a stock for a specified price called exercise or strike price before the maturity date or on