9 CHAPTER 9 An Analysis of Conflict 9.1 Overview 9.2 Understanding Game Theory 9.3 A Non-Cooperative Game Model of Manager-Investor Conflict 9.3.1 Summary 9.4 Some Models of Cooperative Game Theory 9.4.1 Introduction 9.4.2 Agency Theory: An Employment Contract Between Firm Owner and Manager 9.5 Manager’s Information Advantage 9.5.1 Earnings Management 9.5.2 Controlling Earnings Management 9.6 Discussion and Summary 9.7 Agency Theory: A Bondholder-Manager
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FIN-374C Financial Planning and Policy for Large Corporations Fall 2014 Getting Started Introduction to Valuation Major Investment Decisions Project Valuation Find growth potential inside the firm Enterprise Valuation Find growth potential outside the firm Dealing with Complexity Investment Evaluation Process Case Study: CP3 Pharmaceuticals Laboratories Inc. Valuation The objective of a firm is to create wealth by initiating and managing investments that generate future
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2.0 Ratio analysis The next will introduce the Mulberry’s and its competitor—Burberry’s financial ratios from their financial statements from 2010-2012. 2.1 Profitability analysis 2.1.1 Net profit margin Table 2.1 Mulberry and Burberry’s net profit margin Net profit margin | 2010 | 2011 | 2012 | Mulberry | 4.12% | 14.03% | 15.02% | Burberry | 6.42% | 13.74% | 14.27% | Data source: Mulberry’s and Burberry’s 2010-2012 annual reports From Table 2.1 it can find that Mulberry’s net profit
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investments or capital of the firm and not only in relation to sales. Return on capital employed ratio measures the efficiency with which the investment made by shareholders and creditors is used in the business. Managers use this ratio for various financial decisions. It is a ratio of overall profitability and a higher ratio is‚ therefor‚ better. To see whether the business has improved its profitability or not‚ the ratio can be calculated for a number of years. Return on equity (ROE) is widely
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accountant is able to measure and chooses to measure…” (p. 480). Required: Discuss the extent to which the “scientific” world-view of mainstream accounting researchers‚ is grounded on a belief that “reality” exists independently of thee human subject and the possible implications this has for accounting theory development. Introduction Accounting is a subject that is guided with principles and regulations. Thus‚ it is often regarded as a rigid‚ rigorous‚ and highly analytical discipline with
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1. | Question : | Li Retailing reported the following items for the current year: Sales = $3‚000‚000; Cost of Goods Sold = $1‚500‚000; Depreciation Expense = $170‚000; Administrative Expenses = $150‚000; Interest Expense = $30‚000; Marketing Expenses = $80‚000; and Taxes = $300‚000; Li’s operating profit margin is equal to | | | Student Answer: | | 25.67% | | | | 35.67% | | | | 36.67% | | | | 50.00% | | Instructor Explanation: | Operating Profit Margin = EBIT/Sales
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| |[pic] | |Financial analysis statement for the year ended | |December in 2011
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INFORMATION FOR CANDIDATE 1. This exam is worth 50% of the overall semester assessment. 2. The total number of marks available for this exam is 100%. 3. This exam paper contains FIVE (5) questions in THREE (3) pages excluding the cover page. INSTRUCTIONS TO CANDIDATE 1. Answer all questions. 2. Write all your answers in the answer booklet provided. 3. If you make a mistake please put a single diagonal line through the section you wish to be ignored by the examiner. 4. Return all exam
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RecognitionRead: Chapter 6 and partly 13 on warrantyIn-class exercises: BE6-7‚ EX6-11‚ EX6-9‚ EX6-16‚ EX6-18 Practice exercises: EX6-7‚ BE6-11‚ P6-1‚ P6-2‚ E13-17 There are two main conceptual views on how to account for revenues/sales: Earnings approach Contract-based approach Earnings Approach Revenues are recognized when the following criteria are met: 1. Performance is achieved: a. risks and rewards transferred and/or earnings process substantially complete‚ and b. measurability reasonably
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Chapter 1 Financial Accounting and Accounting Standards Intermediate Accounting‚ 15th Edition Kieso‚ Weygandt‚ and Warfield 1 Financial Statements and Financial Reporting • Goals or purpose of (financial) accounting – Identification‚ measurement‚ and communication of financial information about – An economic entity to – Interested Parties (internal and external) • Creditors‚ managers‚ unions‚ government agencies Financial reports (statements) & notes 2 Financial Statements
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