(1) There were many compounding factors that caused SureCut Shears to be unable to pay its bank loan by March 31‚ 1996. When looking at the pro forma income statement as compared to the actual income statement we see the following inconsistencies‚ which are contributing to SureCut’s financial problems: Anticipated Actual Dollar Loss Contributed Sales 25‚800 22‚987 2‚813 COGS (% to Sls) 70.5% 73.8% 768 Gross Profit (% to Sls) 29.5% 26.2% SG&A Expenses (% to Sls) 9.4% 10.6% 269 Total
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MEMORANDUM Date: To: XYZ Research Co. From: Subject: Accounting Treatment for Patents XYZ Research Co‚ (XYZ) came to our firm‚ requesting clarification on the accounting treatment for patents the company purchased. 1. FACTS The company possesses many patents and has historically expensed all of the costs associated with obtaining their patents. The company is unsure if any or all of its patent costs can be capitalized. The company is unsure if impairment testing
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Learning Team Reflection FIN/571 2014 Learning Team Reflection Owners and managers in the business need to make working capital management decisions such as inventory management‚ cash-flow management‚ accounts receivables‚ and supplier or vendor trade credits to ensure the company has sufficient cash-flows to pay short-term obligations. There are a few different working capital strategies a business can employ. Flexible current asset management involves holding large cash balances
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Exhibit 1 Pro Forma Balance Sheets Under Seasonal Production‚ 1994 (thousands of dollars) Actual Dec. 31‚ 1993 Casha Accounts receivableb Inventoryc Current assets Net plant and equipmentd Total assets Accounts payablee Notes payable‚ bankf Accrued taxesg Long-term debt‚ current portion Current liabilities Long-term debth Seasonal Liabilities Shareholders’ equity Total liabilities and equity Jan. Feb. Mar. Apr. May July Aug. Sept. Oct. $200 2‚905 586 $878 1‚060 586 $1‚526 260 586 $1
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Reflection FIN/571 WK4 Learning Team Reflection In week four‚ Team A grasped the concept of calculating the valuation of stocks. The team also reviewed the concept video titled “Stock Valuation. The video focused on how markets and investors value stocks. In addition‚ Team A concentrated on the main drivers of stock valuation. We found that both markets and investors value stocks very highly‚ as stocks play a significant role in a company’s worth. They express to investors how much a company is worth
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ratios: Sectors‚ Inc.‚ has an EBIT of $7‚221‚643 and interest expense of $611‚800. Its depreciation for the year is $1‚434‚500. What is its cash coverage ratio? | 18.34 times | | 14.15 times | | None of these | | 15.42 times | Question 3 | | Multiples analysis: Turner Corp. has debt of $230 million and generated a net income of $121 million in the last fiscal year. In attempting to determine the total value of the firm‚ an investor identified a similar firm in Jacobs‚ Inc.‚ an all-equity
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Interpreting Financial Results FIN/571 Interpreting Financial Results When analyzing a business‚ financial statements provide a detailed look into the company and the success or failure which lies within in. Financial ratios are calculated to determine these numbers and to identify other number related variables that have an impact on the company and those investing in the business. Once determined they offer information concerning the businesses return on investment
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Assumptions for Pro Forma Statements Income Statement Net sales - Sales forecast for 1994 is used as there is no big difference in terms of sales for seasonal or level production. COGS - According to the case 65.1% of sales for the current month. Operating expenses - Seasonal projection 200 plus additional storage and handling cost 115/12 in case of shift to level production. The amount is the same for each month because in case study it is assumed operating expenses are likely to be incurred
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FIN 571 Final Exam Multiple Choice Question 51 You are provided the following working capital information for the Ridge Company: Ridge Company Account $ Inventory $12‚890 Accounts receivable 12‚800 Accounts payable 12‚670 Net sales $124‚589 Cost of goods sold 99‚630 Cash conversion cycle: What is the cash conversion cycle for Ridge Company? 38.3 days 46.4 days 83.5 days 129.9 days Find the final exam answers here FIN 571 Final Exam Multiple Choice Question 58 The cash conversion cycle
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Dana Rodriguez‚ John Ortiz‚ & Robert Helm FIN/571 May 11‚ 2015 Professor Hohl The company that was once a market leader‚ partly based on their high ethical principles and integrity experienced conflict in the services they sold. As the market changed‚ which included the emergence of information technology and a boom in mergers and acquisitions Andersen began to see conflict between its auditing and consulting partners. Anderson and Company sold auditing and consulting services. Problems
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