The first part provides the reader’s opinion on what comprise the key concepts presented in the Chapter 4 article on financial statement analysis. In addition, relevant questions regarding some of the issues contained in the article together…
In addition, an explanation to support the variation in the contribution margin of the five services is provided and possible resource constraints faced by the firm is provided.
Firms adopt different dividend policies which are in line with their goals. Dividend payment is preferred by shareholders since that is their source of reward for contributing equity capital. The article states that dividend payment is simply a transfer of value within the firm. That is, the movement of value already owned by the shareholders to shareholders. Therefore, there is no level of dividend payment that contributes to value creation. The statement is true for the reason that dividend payment does not increase the firm’s ability to increase the economic benefits. In other words, a firm cannot increase its cash flow generating ability by paying dividends. However, the payment of cash dividends has a positive impact on the value of a firm (market value).
The market value of a firm (market capitalization) is determined by multiplying the outstanding shares of a firm with the current share price. It has been observed that the payment of cash dividends by firms increases the market value of companies. The increase is brought about as follows: when a firm pays cash dividends, more shareholders, who prefer certain payments, are attracted (Frankfurter, Wood & Wansley, 2003, pp. 91). The demand of shares of that company increases, thus increasing the share price. Consequently, the market value of the firm increases. There are two theories of dividend payment which supports the influence of cash dividend on the market value of the firm. That is, the bird-in-hand theory and information signalling dividend payment theory (Hunting & Paulsen 2013).
The bird-in-hand, dividend payment theory states that stockholders prefer certainty due to their aversion towards risk. Dividend payments are more assured as compared ...
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Tanya should have explained that management accounting systems are planning and control systems which are usually concerned with the planning and controlling activities of the organization. Management accounting can be defined as: ‘The process of identification, measurement, accumulation, analysis, preparation, interpretation and communication of information that assists executives in fulfilling organizational objectives… a formal mechanism of gathering and collecting data for the ends of aiding and coordinating collective decisions in light of the overall goals and objectives of an organization.
Accounting Information in Decision Making Outline i. Introduction ii. Models of decision-making and their limitations (constraints) a. Individual: Subjective Expected Utility b. Group: Theory of the Firm iii. Role of managerial accounting in providing information to aid individual and group decision-making a.
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Analyzing the statements prepared under the absorption system, the company seems to have made a significant improvement in the second quarter. The gross profit margin has improved from 28% in the first quarter to 40% in the second quarter; whereas the net profit margin has increased from 14% in the first quarter to 28% in the second quarter as seen in appended figure 5.
This is a financial report that focuses its analysis on two companies; Fantastic holdings limited and super retail group which previously was called Super cheap auto group limited. The report analyses the performance of the two companies over time and tries to evaluate which company between the two has good economic performance.
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Ford is an American Based company, with its head
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The goal of an accounting framework is to offer financial data about the studied organization. This data is normally about the financial status and productivity of the organization. It is essential for an organization to
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