Effects of Leases on Selected Financial Reporting Items for Lessees Posted on March 16‚ 2012 by James in Accounting‚ CFA Exam‚ CFA Exam Level 2 The table below summarizes the effects of operating and capital leases on selected financial reporting items for lessees. ITEM OPERATING LEASE CAPITAL LEASE Balance Sheet No impact. Leased asset and lease liability are created. Income Statement Rent expense occurs over the life of the least; this may be a constant value. Interest and depreciation
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accountants) business and retail establishments. The owner receives all profits‚ absorbs all losses and is solely responsible for all debts of the business. Thus‚ the accounting records of the sole proprietorship do not include the proprietor’s personal financial records (Basic accounting made easy 2011 edition by Win Ballada‚ CPA). On the other hand‚ Partnership is a form of organization that is being owned and operated by two or more persons who bind themselves. Each partner is personally liable for any
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Ratio Analysis & Time Series Analysis Of 2.1 Ratio and time series analysis of Beximco Pharmaceutical 1. Inventory turnover: A ratio showing how many times a company’s inventory is sold and replaced over a period. Formula: Inventory Turnover =Cost of goods sold/Average Inventory. The ratio and time series analysis of Inventory Turnover of Beximco Pharmaceutical from 2008-2012 is given below- Interpretation: The companies ratio increases from 2008 to 2010‚ then decreases
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contributor to the Malaysian household debt is housing loan. Irregardless of the interest rate‚ the amount to be borrowed keeps on increasing due to the rising price houses in the country. In addition financial instituition have been aggrasively competing to get more customers. While the acceptable international ratio of house price to household income is 3 to 4 times; it can sometimes rises to 5 to 6 times in kuala Lumpur and Penang. The second contributor is car loan. Car loan consumes a large part of
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Receivables Turnover Ratio interpretation Receivables Turnover Ratio is one of the efficiency ratios and measures the number of times receivables are collected‚ on average‚ during the fiscal year. Receivables Turnover Ratio formula is: Receivables Turnover Ratio formula Receivables turnover ratio measures company’s efficiency in collecting its sales on credit and collection policies. This ratio takes in consideration ONLY the credit sales. If the cash sales are included‚ the ratio will be affected
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Team A Ratio Analysis Memo Liquidity Ratios section Current Ratio A company must consider current ratios when determining the Liquidity ratios; this is because a current ratio is used to determine what the company liquidity and their ability to pay the companies short term debts back. The current ratios are figured out by talking the company’s current assists and dividing them by their current liabilities. In order to become a ratio it must be taken by x: 1‚ x is the current assets for every dollar
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Jonathan Lewellen Financial Management 15.414 Summer 2003 Assignment 5 – Due Monday‚ Aug. 11 Read ‘Cost of Capital at Ameritrade’ and answer the following questions. The spreadsheet ‘Ameritrade’ on SloanSpace contains all of the data in Exhibits 1 – 6 of the case‚ as well as additional data for the Fama-French three-factor model. 1. What factors should Ameritrade management consider when evaluating the proposed strategy? 2. Calculate Ameritrade’s debt-to-value ratio using both the book
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Ratio Analysis – Unit II Problem 1 A company having the Net working capital of 2.8 Lacs as on 30.06.10 indicates the following financial ratios and performance figures Current Ratio 2.4 Liquidity ratio 1.6 Inventory Turnover 8 (on cost of sales ) Gross Profit on Sales 20% Credit Allowed (months ) 1.5 The company s fixed Assets is equivalent to 90% of its net worth ( Share capital plus reserves ) while reserves amounted
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Case Study HBS: The case of the Unidentified Ratios Based on the information provided by the common-sized financial statements‚ we came up to the conclusion that: Firm A – Investment Bank Main reasons: High level of leverage‚ demonstrated in the highest ratios of all companies: assets/equity and debt/equity. Highest number of days of receivable – banks lend money to their costumers (ex. long term loans) and expect to receive this money in a not very short period of time‚ reflected in the
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WARF COMPUTERS‚ INC. Financial Analysis Hirra Zahir‚ Marcus Vaughn‚ Alejandro Romero‚ Kevin Zabihi WARF COMPUTERS | Statement of Cash Flows | 2012 | ($ in thousands) | | | | | | | | | | Operations | | | | | | | | | Net income | | | | | $ | 896 | | Depreciation | | | | | | 191 | | Deferred taxes | | | | | | 130 | | Change in assets and liabilities | | | | | | | | Accounts receivable | | | | | (37) | | | Inventories
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