FIN 370 Cash Flow Problem Sets (4-5,4-7,4-8,4-11,4-13)

FOR MORE CLASSES VISIT

www.fin370genius.com
4-5 Multiyear Future Value How much would be in your
savings account in 11 years after depositing $150
today if the bank pays 8 percent per year? (LG4-3) 4-7
Compounding with Different Interest Rates A deposit of
$350 earns the following interest rates: a. 8 percent in
the first year. Capstone Discussion Question: Post
your response to the following:
Think back over what you have studied and
learned in this course. Do you have a new perception of
or appreciation for the field of accounting and how it
contributes to business? Explain.
To be perfectly honest with you I truly had no clue what
accounting did for a company and how important it
was. I always thought that accounting only dealt with
payroll. In fact accounting does much more that just
payroll and monitor company supplies (coffee, paper,
pens & pencils). The accounting sets budgets for the
entire company, monitors outflow and inflow of profits,
plans budgets for each department, and much more.
When I first begun this class I was really nervous, I truly
thought that I was going to have a hard time
understanding the accounting but I happy to say that I
was wrong. I understood every part of this course.

On a personal note I would like to thank you Jess. If it

wasn't for your pep talk I probably would had gave
up. You are truly a great instructor. I wish you all the
best! God Bless

Another response
Accounting has taken a whole new meaning to me in
my vocabulary. Prior to this course, I just took
accounting as a calculator and crunching numbers. I
now have a new respect for accounting and all the
aspects that are involved. I never once took into
consideration profit, sales, revenue, and balance
sheets also being included with accounting. There is so
much more involved with accounting, and had I not
taken this course I would have never known.
Accounting is a very important part of running a
business. I feel that it is imperative to all people
thinking of opening a business should take some type
of accounting class to become more aware of how to
run the accounting part of a business.
----------------------------------------------

FIN 370 Final Exam Guide (New 2017)

FOR MORE CLASSES VISIT

www.fin370genius.com
Which one of the following statements is correct concerning the cash
cycle? Accepting a suppliers discount for early payment decreases
the cash cycle
Business Plan

By

Kamilah T. Crooms
 The name of my business is called DestinyWear. DestinyWear is
a urban fashion clothing company for woman, men and youth.
DestinyWear specializes in making clothing for every occasion. My
name is Kamilah Crooms and I am the owner and CEO of
DestinyWear.My goal is to ensure that my company will be succesfull
in all areas and in each department. In order for me to make sure that
the company was going to begin in the right direction I had to
priortize what was most important in establishing my business plan.
The main priority is that I had to first choose the appropriate
business structure, a high demanding product, and most of all an
outstanding accounting team.
Business Structure
Upon establishing DestinyWear I had to decide which business
struture that I felt was best for me to pursue. I decided that as a
Entreprenuer the best choice for me abd the direction of the company
would be for me to be sole proprietorship. Sole proprietorship
allowed me to be the sole owner of DestinyWear. The first and most
important reason that I wanted sole proprietorship is because it is
much easier to start a business as sole proprietorships. Sole
proprietorship takes all the profit that and doesn't have to split it
between any other owners or corporations. I also want the power to
make and change decisions along the way without having to first
consult anyone else.

DestinyWear Products
DestinyWear products will range from jeans, shirts, accessories and
shoes. The company will first start off with its most profitable product
and that will be the DestinyWear designer jeans line. The jeans line
has over twenty different jeans designs

from straight leg, baggy, cargo, overalls, shorts and much more. The
jeans line will provide services within the United States and Canada
and will eventually service International customers. The DestinyWear
jeans line will have its own building. In this building the bottom floor
will consist of the factory and the top floor will have the different
departments such as management, marketing and most importantly
the accounting department.

DestinyWear Accounting Department

The accounting plays a major role in establishing my company
DestinyWear. The accounting department does more than managing
and reporting the companys financial documents it is the greatest
tool in establishing my business. The key to a powerful accounting
department here at DestinyWear is applying the principles of internal
control. These principles consist of establishment of responsibilities,
segregation of responsibilities, documentation procedures, Physical,
mechanical, and electronic controls, Independent internal verification
and other controls such as Bonding of employees. In order to ensure
that this business plan works DestinyWear has to hire nothing but the
best qualified employees.

DestinyWear Accounting Staff

DestinyWear accounting team of fine employees will all be hired
through the company. There are several requirements that have to be
met in order for myself as the owner and Human Resource
department to even consider the applicant for accounting. We looked
for characteristics, education and work history experience. The first
and far most important qualifying requirements are education. The
applicant has to have a Bachelor BA/BS in accounting degree a plus
if he or she has a masters.
The second requirement is experience. The applicant must have the
minimum of five years of experience working in accounting. He or
She must have knowledge and employment experience of working
with financial statements, cash management and internal control.
Employees must be experienced in Invest idle cash, planning the
timing of major expenditures, delay payment of liabilities keeping
inventory levels low, and increasing the speed of collection on
receivables. In the category of experience we had to hire applicants
according to the position that had to be filled in accounting. For
example, if a position in accounting such as management or
supervisory needed to be filled, then we would look for years of
experience in management or supervisory positions. I personally
prefer that every employee have some type of management
experience.
Last but not least, the employees characteristics. It is a must that
every accounting staff member has and applies professionalism, great
ethic and moral skills, accuracy, and most importantly punctuality,
and reaching company deadlines. These characteristics are very
important to have at DestinyWear.
DestinyWear Accounting Management Team
The DestinyWear accounting management team will be
reporting to me and to the other head staff each week to report
updates and any new changes. The management team is responsible
to have all the different types of budgeting reports that includes Sales,
Labor, etc. Management must follow the responsibility reporting
system for each department. The managers will use the companys
financial information to predict outcomes of the business. I require a
report from each responsibility center, cost center, profit center and
investment center to be reported each month. Management is
responsible to ensure that the company does not over or under budget
and if any changes it must be reported immediately.
Conclusion
DestinyWear will be a very successful team not only because of
the products that we produce but because of having a great
accounting team. With the help of accounting team I DestinyWear
products will be in every wardrobe in America.

REFERENCES
//http:yourdictionary.com /CVP.org Retrieved 3/20/2010
Thomas, Y. 2005-08-27 Accounting 101 pg. 52 Statements.
March 19, 2010
Drucker, P. Managing in the next society 2002. retrieved march
19,2010
----------------------------------------------
FIN 370 Final Exam Guide (New)

FOR MORE CLASSES VISIT

www.fin370genius.com
Which financial statement reports the amounts of cash
that the firm generated and distributed during a
particular time period? statement of retained earnings
Income statement Statement of cash flows Balance
sheet

Costco Wholesale Corporation

If we look at the financial statements of the company
we can find that the company is financially strong. Its
strength are:
1. It has enough amount of current asset to repay its
current liability. The current ratio of the company
8.18 indicates that the company has $8.18 liquid
asset to repay its $1 of current liability.
2. The operating cost of the company is increasing
because the company is able to reduce its
expenses.
3. Cash from operating activity has increased for the
company.
Apart from this strength the company also has some
weakness in its financial statement:
(i) Increasing inventory indicates that the company
inventory conversion period is increasing.
(ii) The cash from investing activity shows that the
company cash outflow is more in the short term
investment i.e. in non operating activity.
(iii) The overall has for the year 2008 has declined
for the company.
Net Income:
 Net Income
$1,300,000

$1,250,000

$1,200,000
$1,150,000 Net Income

$1,100,000

$1,050,000

$1,000,000
$950,000
2006 2007 2008

If we look at the trend in net income of the company

we can find that the company net income looks
fluctuating but it has improved it net income in 2008 as
compared to 2007.
Debt ratio as a percentage of total assets:

Debt ratio as percent of total asset

55.80%
55.70%
55.60%
55.50% Debt ratio as percent
55.40% of total asset
55.30%
55.20%
55.10%
55.00%
54.90%
2007 2008

If we look at the debt ratio as percent of total asset we

can find that the debt ratio is declining in 2008 as
compared to 2007 i.e. the company is increasing equity
to finance debt.
Debt as a percentage of total equity:
 Debt as percent of total equity
127.00%
126.50%
126.00%
125.50% Debt as percent of
125.00% total equity
124.50%
124.00%
123.50%
123.00%
122.50%
2007 2008

As we can see that the debt as percent of total equity

is declining in 2008 as compared to 2007 i.e. the
company is increasing equity in its capital structure.
As we can see that there is nothing negative in 2008
for the company and this is the reason it has positive
trend as compared to 2007. Hence there is no need to
correct anything for the company.
----------------------------------------------

FIN 370 Week 1 Calculating Ratios Worksheet (2 Set)

FOR MORE CLASSES VISIT

www.fin370genius.com
This Tutorial contains 2 Set of Answers FIN 370 Week 1
Calculating Ratios Worksheet 1. What is agency
theory? How can setting the appropriate goals for the
firm minimize the agency problem? Week 1 DQ 1
Due Tuesday, Day 2
Go to the U.S. Securities and Exchange Commissions
Web site at http://www.sec.gov and the Financial
Accounting Standards Boards Web site
athttp://www.fasb.org. Identify the mission and main
activities of each organization. Then, analyze the
similarities and differences between the roles of each
entity. Which entity has more influence over financial
statement reporting? Explain your answer.
According to the SEC website their mission is to protect
investors, maintain fair, orderly, and efficient markets,
and facilitate capital formation. The SEC also requires
public companies to disclose meaningful financial and
other information to the public. This provides a
common pool of knowledge for all investors to use to
judge for themselves whether to buy, sell, or hold a
particular security. The SEC is concerned primarily with
promoting the disclosure of important market-related
information, maintaining fair dealing, and protecting
against fraud.

According to the FASB website the mission of the FASB

is to establish and improve standards of financial
accounting and reporting that foster financial reporting
by nongovernmental entities that provides decision-
useful information to investors and other users of
financial reports. Since 1973, the Financial Accounting
Standards Board (FASB) has been the designated
organization in the private sector for establishing
standards of financial accounting that govern the
preparation of financial reports by nongovernmental
entities

The major difference in the SEC and the FASB is that

the SEC deals with reporting of financial statements for
all industries while the FASB deals mainly with the
private nongovernmental entities. Both are concerned
with the fairness of financial reports and work in the
interest of the public. I believe that the SEC has more
influence over financial statement reporting because
they can bring civil action against companies and
individuals for violations of securities laws. Although
according to the FASB website, the Commissions
policy has been to rely on the private sector for this
function to the extent that the private sector
demonstrates ability to fulfill the responsibility in the
public interest.

Response 2
Go to the U.S. Securities and Exchange Commissions
Web site at http://www.sec.gov and the Financial
Accounting Standards Boards Web site
athttp://www.fasb.org. Identify the mission and main
activities of each organization. Then, analyze the
similarities and differences between the roles of each
entity. Which entity has more influence over financial
statement reporting? Explain your answer.
U.S. Securities and Exchange Commission (SEC)
 According to the SECs website The mission of the
U.S. Securities and Exchange Commission is to protect
investors, maintain fair, orderly, and efficient markets,
and facilitate capital formation(U.S. Securities and
Exchange Commission, 2010, Para. 1).
The main activities of the SEC are to interpret
federal securities laws; issue new rules and amend
existing rules; oversee the inspection of securities
firms, brokers, investment advisers, and ratings
agencies; oversee private regulatory organizations in
the securities, accounting, and auditing fields; and
coordinate U.S. securities regulation with federal, state,
and foreign authorities. (U.S. Securities and Exchange
Commission, 2010)
Financial Accounting Standards Board (FASB)
According to the FASBs website The mission of the
FASB is to establish and improve standards of financial
accounting and reporting that foster financial reporting
by nongovernmental entities that provides decision-
useful information to investors and other users of
financial reports. That mission is accomplished through
a comprehensive and independent process that
encourages broad participation, objectively considers
all stakeholder views, and is subject to oversight by the
Financial Accounting Foundations Board of Trustees
(Financial Accounting Standards Board, n.d., Para. 3).
The main activities of the FASB are to identify
financial reporting issues based on
requests/recommendations from stakeholders or
through other means. The FASB Chairman decides
whether to add a project to the technical agenda, after
consultation with FASB Members and others as
appropriate, and subject to oversight by the
Foundation's Board of Trustees. The Board deliberates
at one or more public meetings the various reporting
issues identified and analyzed by the staff. The Board
issues an Exposure Draft to solicit broad stakeholder
input. (In some projects, the Board may issue a
Discussion Paper to obtain input in the early stages of a
project) The Board holds a public roundtable meeting
on the Exposure Draft, if necessary. The staff analyzes
comment letters, public roundtable discussion, and any
other information obtained through due process
activities. The Board redeliberates the proposed
provisions, carefully considering the stakeholder input
received, at one or more public meetings. The Board
issues an Accounting Standards Update describing
amendments to the Accounting Standards Codification
(Financial Accounting Standards Board, n.d.).
Both the SEC and the FASB have the same goals of
fairness, accuracy, and understandability of financial
accounting and reporting. Both agenecys accomplish
these goals in the best interest of the overall public.
The differences between the SEC and the FASB is that
the FASB regulates financial reporting in the private
sector of businesses (but are subject to the rules and
regulations of the SEC) and the SEC deals with
regulating the financial reporting of publicly held
corporations.
I believe that the SEC has the greatest influence over
financial statements reporting because they have the
final approval on all changes of the rules and
regulations. The Sec can also bring civil or
administrative enforcement actions against individuals
and companies in violation of the securities laws.

References
Financial Accounting Standards Board. (n.d.). Facts
about FASB. Retrieved July 15, 2010, from Financial
Accounting Standards
Board:http://www.fasb.org/facts/index.shtml#mission
U.S. Securities and Exchange Commission. (2010, May
3). The Investors Advocate: How the SEC Protects
Investors, Maintains Market Integrity, and Facilitates
Capital Formation. Retrieved July 15, 2010, from U.S.
Securities and Exchange
Commission: http://www.sec.gov/about/whatwedo.shtml

Week 1 DQ 2
Due Thursday, Day 4
Search the Internet or the Online Library for
information about the Sarbanes-Oxley Act. A useful
guide to some of these provisions is located
at http://www.soxlaw.com. Summarize at least two
provisions of the law, and discuss your interpretation of
these provisions with your classmates. Do you think
this law will make financial statements more reliable?
Also, discuss how Sarbanes-Oxley establishes
boundaries to ensure ethical practices. What does the
law allow or prohibit, and why?

The Sarbanes-Oxley act has many provisions to give

companies guidelines for responsible, and ethical
financial reporting. One of those provisions is listed in
Section 302 of the act. The provision is that periodic
statutory financial reports be certified that signing
officers have reviewed the reports, the report does not
contain any untrue, or misleading information. The
financial statements fairly present the financial
condition. The signing officers are responsible for
internal controls. A list of all deficiencies in internal
controls, and a list of fraud involving employees, and
anything that could negatively affect the internal
controls.
Another provision pertains to the "management
assessment of internal controls". This provision
ensures that information is published in annual reports
regarding the adequacy of internal controls, structure
and procedures.
The Sarbanes-Oxley act is designed to help companies
promote ethical accounting procedures. The act gives
guidelines as to how financial statements are
reported. The act requires verification that officers
within the company have checked the information in
the reports for accuracy and true. The act also
requires that the companies have internal controls in
place to ensure ethical reporting practices. The main
thing that the Sarbanes-Oxley promotes is
transparency in reporting.

Response 2
Section 802 of the Sarbanes-Oxley Law defines the
penalties that may be assessed against individuals who
failed to comply with the Act. An individual could be
subject to 20 years in jail for altering, destroying,
mutilating, concealing, falsifying records, documents or
tangible objects. Guilt is define by the intent to impede
a legal investigation. This part of the law gets to the
heart of how Arthur Anderson reacted by destroying
documents important to Worldcom. The law further
defines that any accountant who knowingly violates
their ethics by wilfully violates the requirements of
maintenance of all audit or review papers. These
papers are subject to review up to five years.

The second Section that I reviewed was the Section

302. This actually is my favorite part of the law
because it directly holds the officers and directors
accountable for the accuracy of reporting in their
financial statements. It defines that the management
must review and understand the financial statements
and sign that they are true and accurate. It also holds
the management accountable for the internal controls,
requiring any deficiencies to be reported. In the past
directors of companies relied heavily on the internal
officers, management, to report the company
performance without questioning the accuracy or
taking their role on oversight committees seriously.
They could hide behind a veil of trust of the key
leaders. This Section clearly puts the responsibility for
the Board to remain independent of the executives and
function more effectively on the respective oversight
committees they serve. The example I would share is
what happened in WorldCom. The company leaders
shared what they wanted to with the Board, who
trusted implicitly the top leaders. Had they questioned
their legal representation or auditors, they potentially
could have uncovered the fraud that was committed by
the creation of shell companies, with WorldCom
employees as stockholders.

I would love to think this law would protect the

investing community. Financial reporting has improved
to some extent. Unfortunately the scams still
continue. Example would be Barney Madoff or what
happened in the financial mortgage industry. These
unethical practices were conducted after Sarbanes
Oxley was implemented. Madoff was able to provide
false financial information to investors. Financial
industry was allowed to get to aggressive in
underwriting and product suite. Fines and penalties
are deterrents. Ethics still must be inherent in an
individual and company. Laws and requirements are a
guide. There will never be enough auditors, inspectors
or oversight boards to catch all of the fraud in the
corporate community.

The law prohibits falsifying information, failing to notify

of material changes, and destruction of records.
----------------------------------------------

FIN 370 Week 1 Calculating RatiosLake of Egypt Marina

(3-29, 3-30)

FOR MORE CLASSES VISIT

www.fin370genius.com
FIN 370 Week 1 Calculating Ratios Review the financial
statements for Lake of Egypt Marina, Inc. Complete the
following problem sets from Chapter 3 in Microsoft
Excel Lucent Technologies
Axia College of University of Phoenix
Lucent Technologies is a company based on networking
for service providers, government, and enterprises
worldwide (Lucent Technologies, n.d., Para 1). The
products and services they work with are separated
into three categories; service and maintenance,
wireless mobility networking, and wire line networking.
Lucent Technologies is backed by Bell Labs, which does
research and development in networking technologies.
During the years of 2001 to 2003 this company has
experienced a decrease in demand because of other
companies loss or capital used toward spending. This
is mainly due to a downturn in the economy. As an
investor this information is necessary to know because
it explains the decrease or increase in sections of the
balance sheet. In order to compare the growth or
decline of the companys profit, an investor must
change a balance sheet into a common-size balance
sheet. First when looking at the balance sheet an
investor will see that the amount of paid in capital has
increased from the year of 2003 to 2004, the assets
have increased, but the liabilities have decreased.
When running a debt/asset ratio it is noticed that this
ratio drops from 1.2 in 2003 to 1.0 in 2004. This shows
the companys risk is low when concerning financial
leverage, usually when the debt ratio is less than one
percent it is financed mainly by company equity, so this
company is close to being debt free from creditors.
After changing the balance sheet to a common-size
balance sheet there are several factors an investor will
look at. The current assets have dropped to .48 from .
49 in 2004. This does not show harm to the company
because only the accounts receivable dropped while
the rest of the current assets increased. This means the
company is not in as much danger of default on money
owed to it. It does have a rise in marketable securities.
The one concern in the assets is the increase of prepaid
cost of pensions and goodwill. Goodwill can be used for
tax breaks but prepaid pensions cannot benefit the
company.
When looking at the liabilities section an investor will
see a drop in pension and liabilities and an increase in
long term debt, both of these could be affected
because of the drop in the economy. Long term
liabilities are often increased to help a company control
interest rate increases so as an investor cutting back
on pension liabilities cuts back cost to the company
and watching interest rate increase show the company
is concerned with its earning and investors. This would
be encouraging or an investor. The stockholders deficit
shows a drop in accumulated deficits from -1.43 to
-1.22 and total deficits of -.26 to -.08. This shows the
company is working to control any money loss and
turning it to the companys advantage. Overall it shows
the company is still earning a profit although small.
With an increase of assets and a drop in liabilities the
company is showing it is working in a low risk capital.
After reviewing this information, a creditor or investor
must be able to compare this company to the industry
totals. By comparing how this company compares to
other companies similar to it, a person can see if it is
competitive and worth taking a risk. Running ratios will
also show if the company is capable of paying off any
debts it has or if it can acquire the needed cash in case
of emergencies. Overall as an investor, I would say this
company would be worth investing in.

Reference
Axia College. (2007). Understanding Financial
Statements. Retrieved May 10, 2010 from Axia College,
Week 2 Assignment, ACC/230.
----------------------------------------------

FIN 370 Week 1 Question and Problem Sets (Ch 1: Q 3,11

Ch 2: Q4,9, CH 3: Q4,7, Ch 4: Q 1,6)

FOR MORE CLASSES VISIT

www.fin370genius.com
Purpose of Assignment Complete the following
Questions and Problems (Concepts and Critical
Thinking Questions for Ch. 1 Only) from each chapter
as indicated. Show all work and analysis. Prepare in
Microsoft Excel or Word.

Differentiating Depreciation Methods

There is one main difference between straight line
depreciation and accelerated depreciation. Straight line
is decided by taking the cost of the assets, figuring out
the salvage cost when the use of the asset is finished
and how many years of use the asset has. A person
then takes the cost minus salvage and divides the
remainder by the number of years of use. This amount
is the depreciation expense subtracted each year from
the cost. The accelerated depreciation does not have
the same amount of deprecation subtracted each year.
It does have the cost minus salvage value to figure out
the amount to use but is then divided out differently. A
person takes the sum of the years of a products useful
life, such as three years is 3 + 2 + 1 = 6, then a person
would divide the depreciation amount by 3/6 the first
year, 2/6 the second and finally 1/6 for the final year.
So the amount of depreciation expense is larger to
smaller with accelerated and equal amounts for
straight line.
The advantages of straight line method are it is easier
and faster to figure. The advantage of accelerated
method is it is more accurate when figuring
depreciation expense. The accelerated method has an
advantage and disadvantage concerning taxes. A
company can use the accelerated method to take
advantage of bigger tax breaks at the beginning of an
assets life, but since this amount drops during the
lifespan if the company needs added tax breaks it will
not receive them from these assets in the future. With
the straight line method the amount of tax breaks are
even through the life of the product. Most companies
choose this form of depreciation for reporting purpose
on taxes but will use the accelerated method to figure
taxable income.
As mentioned before the advantage of straight line
depreciation is it is easier to figure and uses the same
total each year for deduction of depreciation expense
but the disadvantage is that if use for taxable income
and reporting a company does not get a bigger tax
break at the beginning of the assets life when they
have just put out the cost for the item and may need a
bigger tax break.
----------------------------------------------

FIN 370 Week 2 Cash Flow Problem Sets (5-1,5-3,5-5,5-

7,5-12,5-15,5-39)

FOR MORE CLASSES VISIT

www.fin370genius.com
FIN 370 Week 2 Cash Flow Problem Sets Complete the
following problem sets from Chapter 5 in Microsoft
Excel

Preparing an Income Statement

The companies net income is profitable when the sales
exceed the cost of goods sold. In this, the gross profit is
$761k. This is beneficial to the company. Though we
took the cost of goods away from the net sales there
are still other areas which need to take a piece of the
pie. For this company, once the SG&A and depreciation
are taken out, the company still contains a profit of
$290k. But the buck does not stop there. Once the
interest income and interest expense are adjusted the
balance before earnings and taxes is $290k. After taxes
are taken out, the company is left with a net profit of
$174k.

In this case I think the company has achieved success

with a net profit of $174k. If the company were unable
to be profitable, the company would eventually go out
of business. We would be able to tell if the company
was not profitable by looking at each section
individually. The cost of goods sold is what stands out
for me. If we pay more to make the product then we
are actually selling it for, there is no profit to be made.
So, I think it should all start there.
----------------------------------------------

FIN 370 Week 2 Financial Markets and Institutions

Report (2 Papers)

FOR MORE CLASSES VISIT

www.fin370genius.com
This Tutorial contains 2 Papers FIN 370 Week 2
Financial Markets and Institutions Report Create a
1,050-word report, and include the following: Week 3
DQ 1
Due Tuesday, Day 2

Post your answer to Problem 3.5 on p. 109 (Ch. 3). How

might the information contained within the stockholder
equity statement be used for management and
investor decision-making? Provide specific examples of
situations in which the stockholder equity information
might be used.
The statement of stockholders equity provides the
changes in the equity accounts during the accounting
period more in depth than the balance sheet. The
information found on the statement of stockholders
equity includes retained earnings, common and
preferred stock, and additional paid in capital.
Management uses the statement of stockholders
equity to ensure they are reaching their goal of
maximizing shareholder's equity. The use of market
ratios help with the analysis of the statement of
stockholders equity, such as earnings per share, price-
to-earnings, dividend payout, and dividend yield. These
ratios will help both management and investors in
analyzing the company. For example, if I were looking
to invest in a companys stocks I would utilize all of the
financial ratios, as well as the market ratios. The
earnings per share ratio is calculated before the price
to earnings ratio, P/E, because the earnings per share
ratio is used in the second. If a company pays
dividends, the dividend payout ratio will come in handy.
It tells us The percentage of earnings paid to
shareholders in dividends (Investopedia, 2010, p. 1).
References
Investopedia. (2010). Dividend Payout Ratio. Retrieved
August 3, 2010, from
Investopedia:http://www.investopedia.com/terms/d/dividendpayout
ratio.asp

Response 2
Explain what can be found on a statement of
stockholders equity.

The major elements of stockholders' equity include

capital stock, paid-in capital, retained earnings,
treasury stock, unrealized loss on long-term
investments, and foreign currency translation gains
and losses.

How might the information contained within the

stockholder equity statement be used for
management and investor decision-making?
Provide specific examples of situations in which
the stockholder equity information might be
used.

Management may look at the stockholders equity

statement retained earnings section to determine if
company should borrow money for capital investments
or finance it through various forms of equity. It may
also be used by the stockholder to evaluate the
compensation paid to the company officers. Investors
may also look at the statement for cumulative net
unrealized gains and losses before purchasing stock in
the company. Investors are also interested in the paid
in capital because they can compare it to the additional
paid in capital and the difference between the two
values will equal the premium paid by investors over and
above the par value of the shares.
DQ 2
Week 3 DQ 2
Due Thursday, Day 4

Provide an example from the text or the Internet that

demonstrates a situation in which a companys net
profits appeared good in the statements, but the gross
or operating profits presented a different picture.
Discuss how this might have occurred. Respond to the
following question, addressed in Problem 3.6 on p.
109 (Ch. 3): Why is the bottom-line figure, net income,
not necessarily a good indicator of a firms financial
success? Look for indicators like liquidity or solvency
to answer this discussion question.

An example that demonstrates the situation is Enron.

Enrons financial statements did not show all the
expenses and costs. Instead of showing them on the
income statement they made entries so the cost and
expenses would post in the balance sheet. The same
was done with the revenues. This way it would be less
expenses and the net profit appeared good. Many
debts and losses were not reported in the financial
statements. From the third quarter of 2000 through the
third quarter of 2001, the directors fraudulently used
reserve accounts within Enron Wholesale to mask the
extent and volatility of its windfall trading profits,
particularly its profits from theCalifornia energy
markets; avoid reporting large losses in other areas of
its business; and preserve the earnings for use in later
quarters. By early 2001, Enron Wholesale's undisclosed
reserve accounts contained over $1 billion in earnings.
The head of the company improperly used hundreds of
millions of dollars of these reserves to ensure that
analysts' expectations were met. In addition, Skilling
and others improperly used the reserves to conceal
hundreds of millions of dollars in losses within Enron's
EES business unit from the investing public.This would
show the creditors that Enron was making profits and
its position was solid.
The net income is not necessarily a good indicator of a
firms financial success because the income statement
only shows the profit or loss at a period of time and
does not show the whole picture of the company. The
Balance Sheet, Statement of cash flow, Statement of
shareholders equity and the Income Statement all
together give the real picture of the business. Each one
of them shows different aspects of the business. These
statements show where the income is actually coming
from; is it from sales or from loans the company is
borrowing? If the company is selling a building or any
other asset but that does not mean that it is selling
more products and making profit. Looking at the
Income Statements the company might be making
profit but at the same time it is extremely leveraged.
Response 2
A companys net income is not the whole picture, just
part of it. There are lots of things that contribute to the
net income that may not be significative to the
companys success. If the value of a dollar has a
sudden change that can affect the bottom line if the
company happens to hold the medium of exchange
that can benefit by the change that might occur. The
company can falsely inflate the bottom line. A
companys net income is coupled with liabilities, cash
flow, and selects financial ratios. Looking at it this way
is a much better way of seeing what the companys
success is like. A company can change up many things
to make it look like their income is better. These things
that can be changed are single sales events, cash
infusion, or false financial statements. Some things like
debt that a company has, the companys cash on hand,
their capital assets conditions, or even their sales
trends. To figure the success of the company, you must
look at the whole picture. One thing cannot tell you all
the facts of the companys affairs. You cannot tell the
net income of the company just from the bottom line.
Look at all the financial records.
Response 3
Provide an example from the text or the Internet that
demonstrates a situation in which a companys net
profits appeared good in the statements, but the gross
or operating profits presented a different picture.
Discuss how this might have occurred. Respond to the
following question, addressed in Problem 3.6 on p.
109 (Ch. 3): Why is the bottom-line figure, net income,
not necessarily a good indicator of a firms financial
success? Look for indicators like liquidity or solvency
to answer this discussion question.
Net income is not necessarily a good indicator of a
firms financial success because they have ways to
manipulate it by increasing their revenues or hiding
some of their expenses. For investors trying to decide
where to invest their money, they need to look more
into assessing how the company came up with the
numbers they presented.

An example of this situation is when Laribee Wire

Manufacturing Co. exaggerated in recording their
inventory value which allowed them in acquiring loans
from six banks totaling to about $130 million using it as
collateral. At the same time, they reported $3 million in
net income for the period, but in actuality they lost
$6.5 million.

This company showed a higher net income by reporting

fake inventory in which its value was overstated and
transferred over to their income statement. When the
banks assessed their financial statements, it was
enough to sway them into lending the loans they
needed.
Reference:

Investopedia. (2010). Spotting Creative Accounting On

The Balance Sheet. Retrieved
fromhttp://www.investopedia.com/search/searchresults.aspx?
q=Spotting+Creative+Accounting+On+The+Balance+Sheet&submi
t=Search

----------------------------------------------

FIN 370 Week 2 Question and Problem Sets (Ch 5: Q3,Q4

Ch 6: Q2, Q20, Ch 7 : Q3,Q11 Ch 8: Q1,Q6)

FOR MORE CLASSES VISIT

www.fin370genius.com
Prepare in Microsoft Excel or Word. Ch. 5:
Questions 3 & 4 (Question and Problems section):
Microsoft Excel templates provided for Problems 3
and 4 Ch. 6: Questions 2 & 20 (Questions and
Problems section)
STOCK DIVIDEND

Stock Split
University of Phoenix
Stock Dividend
In the present time, the stock dividend has become
important concept. When dividend is given in form of
stock, it is called stock dividend. In this form of
dividend, the cash does not use. It is important, when
the corporation declares stock dividend, the market
value of the share decreases because the number of
stock increases. The many companies prefer stock
dividend due to the tax benefit. If the individual gets
stock dividend, he does not pay any tax on stock
dividend. Thus the stock dividend reduces tax burden.
On the other hand, the ownership of investors also
spurs up in the company because the number of
holding share increases. There is also disadvantage of
stock dividend. The market value of the share
decreases, so the market value of holding also
decreases (Kennon, 2009).
The ABC Company is leading company in its industry.
The number of outstanding share of the company is
one million. On the other hand, the number of investors
is five millions. The value of market capitalization is
$100 million. The management declares 20% stock
dividend. Thus the 200000 shares will be distributed as
a stock dividend. The number of outstanding share will
be increased by 200000 and the new total number of
outstanding stock will be 1.2 million. On the other
hand, the new value per share in the market will be
$83.33 (100 million/1.2 million). This example is taken
from below mentioned link:
Stock Split
The stock split is also an important concept. When the
management wants to increases number of shares, the
management follows this method. In this method, the
face value of the share is split and number of share
gets increased. Due to increment in number of
outstanding share, the market value of per share also
gets affected but the total market capitalization of the
company does not affect. Both stock split and stock
dividend increase number of outstanding shares but
both are different due to the accounting treatment. In
the stock split, the investors do not get any real
benefit. It is also known as non-cash distribution of
dividend. The motto behind stock split is to increase
trading of the shares in the market (Baker, 2009)
For example, the face value of per share is $100
and the total outstanding shares are 100 million. If the
management of the company announces stock split in
ratio of 1:2, the total outstanding shares will be
increased by 100 million, thus the new total number of
the share will be 200 million. On the other hand, the
face value of the share will reduce by 50%. So the new
face value of the share will be $50. Due to effect of
stock split, the holding share of the investor will also
increase in the prorate basis. If the investor has 10
shares, now he will have 20 shares. It is important
thing that the total issued capital will not be changed.
The illustration of stock split has been got from
following link:
Reverse Stock Split
The reverse stock split is just opposite of stock split. In
this process, the management reduces the number of
outstanding shares. The company increase face value
of the share. In this method corporation decides a ratio
such as 2:1. Thus the company accumulates two shares
in one share. In this method, the total market value of
company does not change. Due to reverse stock split,
the earning per share and face value of per share rises.
Thus the reverse stock split provides just opposite
result from stock split. It is important question, why
company selects this method. When the management
seems that the face value of the share is less as
compared to competitors then the company goes for
this method to make its share value to equal to
competitors shares face value. It is also a sound
strategy to increase treading of shares. If the face
value of share is too cheap in comparison to
competitors, the investors will be discouraged for
investment. For increasing the confidence of investors,
the management uses this method (Mladjenovic,
2009).
For example, an investor holds 100 shares of XYZ
Company and the face value per share is $50. If the
management go for reverse stock split option and
declares one share for 10 shares then the holding of
the individual will reduce 9 shares for every 10 shares.
Thus the new holding of the investor will be 10
(100/10) shares but the face value per share will be
$500. It is also important that the total market
capitalization will remain as same as before reverse
split. The example of the reverse split is take form
below mentioned link:
http://www.sec.gov/answers/reversesplit.htm.
References
Baker, H. K. (2009). Dividends and Dividend Policy. John
Wiley and Sons.
Kennon, J. (2009). All About Dividends. Retrieved May
31, 2010, from
http://beginnersinvest.about.com/od/dividendsdrips1/a/aa040904_2.h
tm
Mladjenovic, P. (2009). Stock Investing for Dummies.
Dummies.
----------------------------------------------

FIN 370 Week 3 Assignment Financial Ratio analysis

FOR MORE CLASSES VISIT

www.fin370genius.com
Purpose of Assignment Students should understand
how to use the financial information and tools learned
in the class on a public company, obtain public
company SEC reports, and use that data to calculate a
company's financial ratios and their comparison to
industry or competitor standards.

Analyzing an Income Statement

The net income of Kodak has decreased a bit; it
appears that the company is more profitable. By
conducting a side by side analysis from 2004 to 2003
the company has increased in current assets and
decreased in total assets. It appears that the company
went down in property, plant and equipment net as well
as discontinued operations. So, despite the decrease in
total assets it looks like the company has made a good
decision.

The company has also decreased its total liabilities by

about 4%. I believe this to be good because the short
term borrowings and long term debt has decreased. To
me, this means that the company is tightening their
belt and paying off old debt.

Total shareholders equity has down a little bit in

dollars, but on the percentage level the companys
percentage has gone up. I believe this is because the
company issued $104k more shares in 2004 than in
2003. The company has the same amount of shares
outstanding in 2004 that it did in 2003 as well.
Retained earnings on the stock have gone up in 2004
as well. I believe this is contributed by the more shares
that have been issued.

I believe the profitability of the company is under good

standings. They appear to be making the necessary
adjustments in the company to stay with in a profitable
income.
----------------------------------------------

FIN 370 Week 3 Individual AssingmentRisk and Return

Analysis Report (2 Papers)

FOR MORE CLASSES VISIT

www.fin370genius.com
This tutorial contains 2 Papers FIN 370 Week 3 Risk and
Return Analysis Create a 1,050-word report, and
include the following: Explain the relationship
between risk and return Identify an example of risk
and return Cash Flow Statement Analysis

Cash Flow Statement Analysis

The cash flow statement is important financial
statement of the corporation. The cash flow statement
states from where cash has come and where cash has
been gone. Thus the cash flow statement makes a
relationship between beginning balance and ending
balance of cash. The cash flow statement is prepaid on
the basis of income statement and balance sheet of the
company. The Little Bit Incs beginning cash balance
including marketable securities was $24000. On the
other hand, the ending cash balance including
marketable securities of the company was $40000
(Weygandt, Kimmel & Kieso, 2009).
The net income of the company was $5500 during
2009. The company generated cash inflow from
operating activity is less as compared cash out flow
from operating activities. The company generated
$9000 negative cash balance in operating activity
section of the cash flow statement. On the other hand,
in the investment section, the firm has also negative
cash balance. The firm has $7000 negative balance in
investment section of the cash flow statement. The
Little Bit Inc made investment during the year instead
of selling of assets. Last section of the cash flow
statement is financing activity section. In which, all
finance related activities come. The corporation sold
some shares and borrowed some money from outside
lenders therefore the company has positive case
balance by $32000 in financing activity section.

Reference
Weygandt, J.J.,Kimmel, P.D. & Kieso, D.E. (2009).
Managerial Accounting: Tools for Business Decision
Making. John Wiley and Sons.
----------------------------------------------

FIN 370 Week 3 Risk and Return Problem Sets (7-21,7-

27,8-19,8-21,9-33)
 FOR MORE CLASSES VISIT

www.fin370genius.com
FIN 370 Week 3 Risk and Return Problem Sets
Complete the following problem sets from Chapter 7 in
Microsoft Excel: 7-21 7-27 Complete the
following problem sets from Chapter 8 in Microsoft
Excel: Week 5 DQ 1
Due Tuesday, Day 2

In what ways does the statement of cash flows relate to

the balance sheet and income statement?

It is important to understand what we are doing with

the numbers and the results these numbers give us
because the result is the information that will be
available to us from financial statements. Although
some want to see the income statement and ignore the
other statements we need to use them together to see
the total picture of what is happening to our business.
The relationship between the numbers on the financial
statements shows us everything we need to know
about the business.
The income statement shows income and expenses for
a period of time and if we are making or loosing money.
The balance sheet compares the assets to liabilities
and shows how much money the business would have
if everything is sold today.
The statement of cash flow might be the most critical
statement because there is plenty of information we
can gain form it. This statement relates with the
income statement on operating activities to see if they
are generating cash or not. It is related to the balance
sheet on how much cash is used in investing activities.
In relationship with the balance sheet the cash flow
statement shows what cash is provided or used by
financing activities. It will tell us how much debt has
been paid and will indicated if we are using more debt
or have paid down the credit line.
When the business makes a sale or receives payment
for a sale on credit that is an inflow. A sale shows up as
income on the profit and loss statement and as an
inflow on the cash flow statement. It also shows up
either as cash or accounts receivable on the balance
sheet. Also, how quickly we can collect on accounts
receivable will play a big role in the cash flow. When
the business spends money, it shows up as an expense
in the profit and loss statement and as an outflow on
the cash flow statement. It also shows up on the
balance sheet as a decrease in cash, or an increase or
decrease in liabilities, depending on what the expense
represents.

Response 2
 In what ways does the statement of cash flows
relate to the balance sheet and income statement?
The cash flow statement relates to the income
statement and balance sheet. The net income from the
income statement is listed on the statement of cash
flows. Operating activities are analyzed on the
statement of cash flows; this section of the statement
reconciles the net income to the actual cash the
company received from or used during operations. The
second section of the statement of cash Flows is the
cash flow from investing activities which include
purchase or sale of assets. The last section in the
Statement of Cash Flows is the cash flows from
financing activities that includes raising cash by selling
stocks/bonds or borrowing from backs; or cash out
flows from paying back loans. The balance sheet shows
the different account balances at the end of the
accounting period. The statement of cash flows reflects
changes in the accounts listed on the balance sheet
between accounting periods. The net cash from
operating, financing, and investing activities are added
up to calculate the net change in cash.

Week 5 DQ 2
Due Thursday, Day 4

Discuss how the statement of cash flows is utilized by

investors. If you were an investor reviewing a
statement of cash flows, what section might interest
you most? Why? Discuss the circumstances in which
other sections of the statement might be important to
an investor.

Prior to making an investment in a company, one would

want to understand the decisions the owners are
making to fund the operations of the company daily.
Maintaining sufficient cash to acquire new product, pay
overhead, and satisfy generated sales would be the
predominant need of the company. Second need would
be for the company to have sufficient cash to remain
competitive. This may require cash to invest in
research and development, increase inventory as new
product introduction, improve efficiency in plant and
equipment, or cash to satisfy prior borrowing
obligations. By reviewing the statement of cash flow,
the investor can determine if the company is
generating sufficient cash internally to fund operations
or are they requiring outside injection of cash to
finance the short fall in cash needed to operate the
company. Last, the investor can review the statement
of cash flow to better understand the leverage of the
company and the requirement for repayment of debt,
or dividends to reward prior investments.

Response 2
Discuss how the statement of cash flows is utilized by
investors. If you were an investor reviewing a
statement of cash flows, what section might interest
you most? Why? Discuss the circumstances in which
other sections of the statement might be important to
an investor.

The statement of cash flow is utilized by investors

because it has all information integrated from the
balance sheet and the income statement. The
statement of cash flow is used by an investor to see if
the operating activities are greater than the net income
to have earnings that are called high quality. If
operating activities are less, then a red flag will be
raised as to why the net income is not becoming
cash. Another reason would be investors believe cash is
the best. The statement shows all cash coming and
going from the business. If the company generates
additional cash than what is being used, then the
company can reduce their debt, acquire another
business, or buy some of the stock back. The last
reason why would be that financial models are based
upon the statement of cash flow.
If I was an investor reviewing a statement of cash flows
the section that might interest me the most would be
the operating activities. I would like to know how the
company was doing and what areas need to be
improved to have more cash generated in the
business. All the sections are important to an investor
so they can see the complete big picture of their
investment.
----------------------------------------------

FIN 370 Week 3 Team Assignment Precision Machines

Part 1 (annotated bibliography and excel calculation)

FOR MORE CLASSES VISIT

www.fin370genius.com
This Tutorial contains both annonated bibliography and
excel file FIN 370 Week 3 Team Assignment Precision
Machines Part 1 Precision Machines is preparing a
financial plan for the next six months to determine the
financial needs of the company.

Candela Corporation
Axia College of University of Phoenix

Candela Corporation
Candela Corporation and Subsidiaries have been
working for over 34 years developing and
commercialize aesthetic laser systems that allow
physicians and personal care providers to treat a
variety of cosmetic and medical conditions such as
removal of spider veins, scars, stretch marks, warts, as
well as hair removal and age spots, freckles and
tattoos. Other skin treatments such as psoriasis and
acne and acne scars are also treated. (Axia
College, 2007)
Going from top to bottom on The Candela
Corporation and Subsidiaries Consolidated Statement
of Cash Flows; for the operating activities, 2002 shows
an alarming loss in the net income while 2003 and
2004 for the company are showing a significant and
steady climb in the net income. In 2004 there was a
new category added called Provision for the disposal of
discontinued operations and the category has caused
an increased the account for 2004. Loss from
discontinued operations grew from 2002 to 2003 but
had a significant decline for 2004. Depreciation has
increased over the last 3 years as well. Provision for
bad debts increased significantly too, but an increase
in bad dept is expected as revenue increases. The
provision for deferred taxes shows the company went
from a loss in 2002 and 2003 to show there was no tax
loss in 2004. The tax benefit from exercised stock
options has practically doubled sense 2003. The
changes in assets and liabilities for the last 3 years
have been up and down. Receivables have increased,
notes receivable decreased, and inventories have
increased. Other current assets, other assets have also
increased. Accounts payable has made a significant
decrease in the last 3 years as well as accrued payroll
expenses. The accrued payroll decreasing could mean
that the amount of employees over the years has
decreased as well. The accrued warranty costs have
increased as well; this could mean that the company
renewed equipment warranties. The net cash provided
by operating activities looks to have gone from a loss in
2002 to a large profit in 2003 and then a decrease, yet
still a profit for 2004. It appears on the operations level
that management needs to do more to regulate the
companys finances so there is not an up and down
variance each year.
The cash flow from investing activities shows me
that in the last three years they had large amount of
investments in 2002 and 2003 but now they are letting
them decrease.
The cash flow from financing activities states that
the proceeds from issuance of common stock have
increased significantly from 2002 to 2003 and rose a
little more in 2004. The repurchases of stock has not
happened sense 2002 and the principle payment of
long-term debt grew in 2003 from 2002 and shows no
activity for 2004. Same goes for the net borrowing on
line of credit; it appears that Candela Corporation is
current on payments to line of credit. So, the net cash
from financial activities looks great for 2004. The cash
and cash equivalents for each year have increased
steadily.
After reviewing the consolidated statement of cash
flows for Candela Corporation, I believe the company is
making a profit, but perhaps need some control over
their operating activities.
Reference

Axia College. (2007). Statement of Cash Flows.

Retrieved June 14, 2010 from Axia
College, Week Six, ACC 230.
----------------------------------------------

FIN 370 Week 4 Cash Flow AnalysisFrank Smith

Plumbing (calculation and 2 Papers)
 FOR MORE CLASSES VISIT

www.fin370genius.com
This tutorial includes both calculation and 2 Papers FIN
370 Week 4 Cash Flow Analysis Analyze the case study,
Frank Smith Plumbing. Analyze the Frank Smith
Plumbings Financial Statement spreadsheet.

Analyzing Statements of Cash Flows

4.8. Research Problem

Choose five companies from different industries and
locate their statements of cash flows
for the most recent year.
(a) Create a table to compare the dollars provided or
used by operating, investing, and financing activities,
as well as the overall increase or decrease in cash.
(b) Create a second table for each company comparing
this same information for each of the three years
presented in that companys statement of cash flows.
Include an additional column that looks at the
combined cash flows for all three years.
(c) Write a short analysis of the information gathered.
Your discussion should address, among other things,
whether cash flow from operating activities is large
enough to cover investing and financing activities, and
if not, how the company is financing its activities.
Discuss differences and similarities between the
companies you have chosen.

(a) Create a table to compare the dollars provided or

used by operating, investing, and financing activities,
as well as the overall increase or decrease in cash.

STATEMENT OF CASH FLOW ANALYSIS

HARELY
STARBU DAVIDSO
CKS N RITE AID
2008 2008 2008

NET INCOME /
STARTING $ $ $
LINE 315.5 - (1,079.0)
OPERATING $ $ $
ACTIVITIES 1,258.7 (684.7) 79.4
$
INVESTING (1,086. $ $
ACTIVITES 6) (393.3) (2,933.7)
FINANCING $ $ $
ACTIVITIES (184.5) 1,293.4 2,904.0
$ $ $
CASH (11.5) 190.7 49.9
(b) Create a second table for each company comparing
this same information for each of the three years
presented in that companys statement of cash flows.
Include an additional column that looks at the
combined cash flows for all three years.
STARBUCKS

2008 2007 2006

Net Income/Starting 315. 672.6 564.

Line 5 4 26
Cash from Operating 1258 1331. 1131
Activities .70 22 .63
- - -
Cash from Investing 1086 1201. 841.
Activities .60 95 04
- - -
Cash from Financing 184. 171.8 155.
Activities 50 9 33
-
11.5 - 138.
Net Change in Cash 0 31.35 80
Net Cash - Beginning 281. 312.6 173.
Balance 30 1 81
Net Cash - Ending 269. 281.2 312.
Balance 80 6 61
HARLEY
DAVIDSON

2008 2007 2006

Net
Income/Starti 933. 1043
ng Line 0 84 .15
Cash from -
Operating 684. 798. 761.
Activities 65 15 78
Cash from - -
Investing 393. 391. 35.2
Activities 25 21 6
Cash from - -
Financing 1293 1037 637.
Activities .39 .80 02
Net Change in 190. 164. 97.4
Cash 70 46 2
Net Cash -
Beginning 402. 238. 140.
Balance 85 40 98
Net Cash -
Ending 593. 402. 238.
Balance 56 85 4
RITE AID

200 200
8 7 2006

Net -
Income/Startin 107 26. 1273
g Line 8.99 83 .01
Cash from
Operating 79.3 309 417.
Activities 7 .15 17
Cash from - - -
Investing 293 312 231.
Activities 3.74 .78 08
Cash from -
Financing 290 33. 272.
Activities 3.99 72 84
-
Net Change in 49.6 30. 86.7
Cash 1 08 5
Net Cash -
Beginning 106. 76. 162.
Balance 15 07 82
Net Cash - 155. 106 76.0
Ending Balance 76 .15 7
(c) Write a short analysis
of the information
gathered. Your discussion
should address, among
other things, whether
cash flow from operating
activities is large enough
to cover investing and
financing activities, and if
not, how the company is
financing its activities.
Discuss differences and
similarities between the
companies you have
chosen.

Starbucks operating cash flow has gone up in 2007 and decrea

looks a on the down side but previously was doing well. The ne
previous year. This could mean that this year there can be a g

Harley Davidson's operating cash flow has significantly decreas

cycle from 2006. The decrease in cash from operating activitie
income. With the economy the way it is and not many people
income is decreasing. With a bounced back economy in the co
 Rite Aid's operating cash flow has taken a significant decrease
from investing and cash from financing, the net change in cash
gain in cash could be from the ever growing needs in medical s
company.
----------------------------------------------

FIN 370 Week 5 Team Assignment Precision Machines

Part 2 (Cash Budget and Strategic Analysis)

FOR MORE CLASSES VISIT

www.fin370genius.com
FIN 370 Week 5 Precision Machines Part 2 Note: There
are two parts to this learning team assignment; Part 1
was completed in Week 3. Review the Precision
Machines document and spreadsheet. Prepare a cash
budget for Precision Machines in Microsoft Excel
Findwhat.com Case - CheckPoint
ACC 230
Findwhat.com has recorded the 135 percent increase in
the revenue which is mainly due to the business
acquired of Espotting during the year. The different
accounting policies are present for the acquiring firm
and the acquired firm. The company has recorded
certain premature revenues for the amount which
advertisers had made only the advance deposit. As
result, the company is recognizing the vendor financing
as revenue. In some places, the gross revenue has
been recognized while in another, the net revenue has
been recognized. The network click revenue is
recognized at gross level while the private level
revenue is taken at net level. Some of the revenue
expenditures have been recognized as the capital
expenditures.
Revenue for set up network fee is treated as deferred
revenue and is recognized over a period of time. The
company is very inconsistent with regards to its
accounting policies in terms of recognition of revenue.
The provision and treatment of amount for doubtful
debt is also not satisfactory. When a customer clicks on
a sponsored advertisement, the whole of the revenue
due to him is recognized. The company is having a very
high amount of doubtful debt balance at the end of the
year ending December 31, 2004.