StudentShare solutions
Triangle menu

Case Study Financial & Management Accounting: Financial and trend analysis and industry comparisons - Essay Example

Not dowloaded yet

Extract of sample
Case Study Financial & Management Accounting: Financial and trend analysis and industry comparisons

This reveals that the company has been able to increase its profit during the financial gloom, which is a positive sign for investors. However, in the balance sheet it can be seen that the cash balance has reduced to $30,000 in 2012 from $40,000 in 2011. The current assets are more in comparison to current liabilities, which proves that the company has enough working capital to manage its operational functions. The number of shares in 2012 has increased to 38,000, which indicates a further issue of 8000 shares, as there were 30,000 shares in the previous years. The earnings per share have also from $2.94 in 2010, $3.06 in 3011, to $3.15 in 2012. The liquidity ratios reveal that the liquidity position of the company has deteriorated from 2010 to 2012, which is not a good indication, and indicates towards insolvency in future if this trend continues (Wolk, and Tearney 10-15). The leverage ratio of the company also shows an increasing trend, which means that risks associated with investment are high. The profitability ratios reveal that there has not been any drastic improvement in profitability over the years, and the return on equity has decreased from 14.20 percent in 2011 to 13.98 percent. The problem is that CEO Bob Scott is focusing too much on an increase in sales of 25 percent. However, there are other important aspects which need to be considered for profitability, such as liabilities, debts, assets of the company, expenses, etc, which he is hiding behind the sales figure (Weil, Schipper and Francis 103-107). Answer 2 Ratio analysis is a significant financial measurement tool. Each ratio has its own significance and indicates certain aspect of a company. In this case study the significant ratios are mentioned, yet there are certain ratios which has been missed out, would have given the investor a clearly look of the financial status of the company. The first ratio that can be considered is Return on Investment ratio. The return on investment ratio would assist in understanding the investments made by the company for business, and return achieved from business functions. The Debt to Equity ratio should have been also considered, so that the constituent of the capital structure can be understood. Working capital turnover ratio would have been appropriate for TEC, so as to understand the status of the working capital of the company. The Price Earnings ratio would have been helpful in identifying the earning per share in comparison to the price of each share. Apart from this there are other ratios like operating ratio, stock turnover ratio, etc, which if included would have presented a transparent picture of the company (Elmaleh 105-106). Answer 3 CEO and president of the company Bob Scott said in the beginning of his speech that the fiscal year 2012 has been a mixture of opportunities and threats for TEC. He mentioned the positive results but did not reveal any negative aspect about the company which could define the threats. He also indicated that sales of the company have increased by 25 percent. In comparison to the industry growth, which is around 10 to 12 percent, this revenue growth of the company was enormous. He mentioned that the company would be able to pull away from the prevailing threats due to increased revenue, but what were the threats or risks that the company faced and how are they going to face it was not explained by him. He did not mention anything about company’ ...Show more

Summary

Case Study Financial & Management Accounting: Financial and Trend Analysis and Industry Comparisons Table of Contents Answer 1 3 Answer 2 4 Answer 3 4 Answer 4 5 Answer 5 5 Answer 6 6 Work Cited 7 Answer 1 Thunder Electronics Company SA (TEC) is a supplier of computer spare parts…
Author : yhansen
Case Study Financial & Management Accounting: Financial and trend analysis and industry comparisons essay example
Read Text Preview
Save Your Time for More Important Things
Let us write or edit the essay on your topic
"Case Study Financial & Management Accounting: Financial and trend analysis and industry comparisons"
with a personal 20% discount.
Grab the best paper

Related Essays

Strategic Management Accounting
Management accounting is considered to be useful when it properly displays an external image and a futuristic picture for an organisation. Strategic Management Accounting on the other hand can be distinguished from other management accounting activities through its extensive external orientation; this extensive external orientation includes focus towards customers, competitors, suppliers and all other stakeholders that get affected by the organisation’s normal course of business.
7 pages (1750 words) Essay
Case Study: Ethical Behavior in Accounting and Financial Management
Before filing for bankruptcy in the year 2001, Enron was the largest wholesale marketer related to natural gas as well as electricity in North America. However, after years of international and domestic extension of its business involving many complex deals and contracts, the corporation acquired billions of Dollars in debt.
4 pages (1000 words) Essay
Financial Management case study 2
especially that which could be converted to cash. (Ishaq, 2004) Examples are cash, securities, accounts receivable, inventory, office equipment, real estate, a car, and other property. On a balance sheet, assets are equal to the sum of liabilities, common stock, preferred stock, and retained earnings.
3 pages (750 words) Essay
Management accounting - financial reporting
To support such changes, companies have altered their management accounting practices to adapt to the ever changing environment. There is sufficient research done by the authors discussed in this work, to support such a statement.
12 pages (3000 words) Essay
Case Study on Financial Management
By combining a variety of investments options such as stocks, bonds and real estate assets an investor can achieve diversification and thus avoid "putting all his eggs in one basket". However, it should be remembered that it is not possible to have zero risk and 100% rewards, yet with the correct combinations of diversification it is possible to achieve an optimal balance or risk and reward depending on the investment goals, growth strategies and available time horizons (Witt and Dobbins 1979).
8 pages (2000 words) Essay
Financial & Management Accounting
This aspect of accounting concerns itself with learning about the effect an organisation has on society and about its relationships with an entire range of stakeholders to whom it is accountable. These would include all those groups who affect and/or are affected by the organisation and its activities.
19 pages (4750 words) Essay
Financial analysis case study
Chairman statement in an annual report is like an index of the contents of the report. One can say that Chairman statement sets the tone of the report and provides an overview of the performance of the
5 pages (1250 words) Essay
Topic: DOES FUTURE OF MANAGEMENT ACCOUNTING LIE IN STRATEGIC MANAGEMENT ACCOUNTING
At the end, a conclusion has been inferred from the entire report. An organisation is successful to the extent it successfully implements its
10 pages (2500 words) Essay
Case Study: Ethical Behavior in Accounting and Financial Management
However, after years of international and domestic extension of its business involving many complex deals and contracts, the corporation acquired billions of Dollars in debt. All these debts were covered by
4 pages (1000 words) Essay
Financial Accounting Ethics Case Study
reasingly important for a business to survive in the currently highly competitive corporate sector, organizational leaders have found themselves having to plan for both long-term and instantaneous projects, goals and objectives. Mergers and acquisition have continuously been
4 pages (1000 words) Essay
Get a custom paper written
by a pro under your requirements!
Win a special DISCOUNT!
Put in your e-mail and click the button with your lucky finger
Your email
YOUR PRIZE:
Apply my DISCOUNT
Comments (0)
Rate this paper:
Thank you! Your comment has been sent and will be posted after moderation