Asset

analysis: 3 References 5 Ratio Analysis A) Definition and explanation of different financial term: i. Current Assets are the items on balance sheet of an entity which are in the form of either cash, equal to cash or can be converted to cash within next one year. For example: investments, foreign currency, cash, inventory, receivables and work in process(Kumar, 2014). ii. Noncurrent Assets are the long term investments of an entity which full value cannot be realised within one year of balance…

term, the uncertainty around the evolution of asset value will dominate the lack of precision in information. Gramlich et al (2001) added that short term debt causes long term debt ratios to shift in the opposite direction, if the current debt is classified as long term. A firm seeking to make a short term investment decision, will more than likely gain short bursts of cash or cash…

Goodwill is explained as the ‘future economic benefits arising from other assets acquired in a business combination or acquisition that are not individually identified and separately recognised’ in AASB 3 Appendix A. Physical asset including buildings or equipment cannot be considered as goodwill, it should be an intangible asset that has no physical substance. And a business combination itself means ‘a transaction or other event in which an acquirer obtains control of one or more business’. On…

among several others. Prudence The prudence convention states that caution should be exercised when making professional judgements in accounting estimates. Prudence requires the accountant to exercise caution in their estimates so that income and or asset prices are not overstated and also that expenses are not underestimated. There is a danger that management in an organisation…

capital from 2013, caused primarily due to a $299 million increase in inventory, which was necessary to support the increased retail sales. HBC’s competitor, Nordstrom, has a working capital of $2,424 million due to having a large accounts receivable asset of $2,306 million compared to the accounts receivables account of HBC, which is only $212 million. In 2014, the company saw a 97.11% increase in the operating profit, which is an increase from the 2220% decline that Hudson…

equity and better efficient utilization of assets for return than Robi-berga cooperative union during the study periods. In generally, as profitability ratios those two unions were not satisfactory as the standard…

current tax expense being less than current income tax obligation” (Income Tax: Current Vs. Deferred, 2013). A deferred tax expense, a benefit, is either the decrease or increase in the deferred tax asset balance pertaining to through the specified accounting period, from start to finish. Deferred tax assets should be reduced by a valuation allowance if there is a possibility of it not being…

is useful for showing a company’s ability to cover its short-term obligations with its readily available assets. The more current assets the firm has in comparison to its current liabilities, the less of a risk that firm runs of defaulting on these payments when they come due. The actual ratio supposes that all current liabilities must be paid off immediately with the balance of current assets at that time. For this reason, it is very much desirable for a company to have a current ratio over 1…

(Murdoch et al, 2013). Study conducted by Murdoch et al (2013) shows that in terms of asset cost, LIFO manufacturing firms are an average of about 5 to 6 times larger than that of FIFO Manufacturing firms. Also, both LIFO and FIFO Manufacturing firms hold about 20% of their assets as inventory. LIFO Manufacturing firms earn about 4 % higher after-tax operating return on their assets (ROA). In contrast, in terms of total assets, LIFO Transportation industry firms are about half the size, or less,…

The overall attractiveness of the industry is moderate. As a whole, the audio entertainment industry provides hundreds of thousands of jobs directly and indirectly. As a consumer, the attractiveness of this industry is high. The consumer has the ability to choose between the programming of AM/FM, internet, and satellite radio, based on their likes and dislikes, vis-a-vi payed programming versus commercial programming. The attractiveness remains high on the part of the consumer due to their…