The Government and Fiscal Policy Sample Questions

When the product of manifold was not dropped, assume that the selling prices, volumes and material costs for the year 1991 model would not change for fuel tanks and doors. Therefore, the budget year of 1991was the report of 1990 and it was not changed for 1991 (see table 4).

Reduced inventory by 1.8 million pair. Based on the COGS of 45%, this could mean a reduction in inventory of close to $10M.

20. Last year your company built 1,500,000 units of product Able and sold 1,405,000 After 14 months in R&D, a revision of product Able is due out tomorrow, on January 2 (the first business day of this year) What will happen to the unsold inventory of 95,000 units of “old” product Able?

production was at its peak and had some very mixed results. In documents 4, 6, 7, 8 they show

* 1 million usd in bank and expenditure at the rate of 600,000 usd per month.

1. There were many adjustments that were made in the original balance sheet to properly record overstatements made by DHB Inc. In the current assets, one major entry that was heavily overstated was inventory. Inventory went from $47,560,000 to $38,231,000. The difference of $47,742,000 is a material due to the magnitude of the difference.

The productive assets of property, plant, and equipment changed dramatically in 1996 they were 5,581 to 2010 an increase to 21,706. In total current assets there was a increase in 1996 from 5,910 to in 2010 21,579. Another significant change is in long term debt in 1996 of 1,116 to in 2010 an increase to 14,041. Also an important figure to note is in the retained earning in 1996 they were 94% (15,127) to 2010 68%

Asset turnover has trended downward slightly from 1.46 in 1983 to 1.32 in 1986 due to a decline in inventory turnover (3.99 in 1983 and 3.16 in 1985). In addition, any AMT"s product sits in inventory 255 days before being sold (for 1985). The fixed asset turnover ration has trended upward (from 14.6 in 1983 to 17.1 in 1985) indicating low capital intensity.

With this company the inventory management ratios further indicate that there may be an issue with inventory and inventory controls. The inventory turnover ratio is lower than the industry average and the days’ sales in inventory are high. A company wants to turn inventory quickly to reduce storage costs, and

Jones over forecasts his inventory and has a low inventory turnover ratio. This drastically increases his accounts payable, as he isn’t able to pay due to low cash inflow. His account’s payable increased by nearly 9 percent in 2006. Nearly half of his current assets are in inventory. Also Jones isn’t able to take advantage of the cash discounts offered by his suppliers due to his slow cash collection process. In order to perform well, the company must improve its inventory system and its cash collection policies.

Inventories have been valued $871 million, an increase of $150 million from last year. This can be viewed in a multitude of ways. Caterpillar may be expecting larger sales volume, and are trying to compensate. Caterpillar could have inventory control problems. Usually, inventory increases are viewed as a negative with a company that should be in theory practicing a just in time approach.

Furthermore, if Pluto's demand was even worse, it may cause the inventory’s fair value will be lower than their original cost. When Pluto's financial performance get worse, the management may possibly have the motivation to manipulate or falsify the data or documents.

If for example, the planned aggregate expenditure was lower than the output of the companies, they would see their stocks rise above what they had anticipated. As this accumulation of inventories is computed within the total expenditure, it would be fulfilled that the GDP is equal to the demand, but the level of production would not be of equilibrium. In fact, in the following periods, the companies would adjust their production downwards to give rise to the unwanted increase in inventories. The balance would be reached when production ended up at a level equal to the planned expenditure.

Income and expenditure budget – Show how much an organisation expects to earn and spend in future periods.

Reviewing Exhibit 1 it is indicative that each year their actual inventory ratio continued to increase as opposed to decreasing. Keeping inventory in stock is good for clients but bad for capital when it remains on the shelves and doesn’t sell as quickly as you are producing it.