Abstract This analysis identifies several expected changes in the field of accounting. These include that the reporting of financial information will become more strictly regulated; that the reporting of financial information will involve international regulations and standards; that accounting departments will have an international aspect to their operations; that information technology will impact on the role of the accounting department; that the accounting department will provide more diverse information; and that the skills and functions required of accountants will increase.
From the Paper "Accounting has always been related to measuring the activities of the business and reporting those activities in suitable ways. Financial statements are created not only to tell the business how it is functioning, but also to pass that information on to shareholders and other interested third parties. This is the task of disclosing financial information and it is a crucial one. One source notes that the primary goal of financial accounting is to provide information to external users of accounting information. Most major organizations are supported by shareholders."
This paper discusses the ABC accounting process, which evaluates and determines ways to improve the quality of financial decisions at the Department of Defense (DoD).
Abstract This paper explains that the Department of Defense (DoD), with more than $1 trillion in assets and a budget that accounts for about half of the federal government's discretionary funding, has a need for accurate accounting processes. The author points out that ABC captures quantified cost and time data and translates it into information for making decisions by measuring process and activity performance, by determining the cost of business process outputs, and by identifying opportunities to improve process efficiency and effectiveness. The paper concludes that the ultimate decision will be based on a blended action that minimizes cost and time, while creating a better outcome.
Table of Contents
Big Need for Accurate Accounting
ABC in the Military
Process Decision Example
Success Stories
NASA
Fleet and Industrial Supply Center (FISC)
Military Resistance to ABC?
Who Might Benefit in the DoD?
From the Paper "In the 1990s, the RAND Corporation, including its defense-oriented federally funded research and development organizations, offered a better way for the DoD to pay for its purchases, one it thought would improve the interactions; after all, if a unit overspent in one year, then the next year it would be looking for lower prices. That meant that the organization it purchased from would experience a loss, or potentially could, which in turn could affect the service or product quality or delivery. However, the WCF arrangement bore the stamp of approval of the DoD Comptroller's office, which suggested that the WCF approach has saved ?billions of dollars by providing managers with greater visibility into the costs of DoD support operations.?"
Tags: rand, budget, time, cost, website, purchases
Abstract This paper is an oral presentation of the findings of an independent auditor of the HealthSouth Corporation. The audit concerns a 300-million-dollar refund HealthSouth is seeking from the federal government on the over-inflated profits it reported on its assets. The auditor asserts that no indications of Medicare fraud were found and that the over-inflated profits reported by the company were a result of HealthSound projecting assets not truly expected to incur, as well as a refusal to take into consideration the costs of the company (reporting only money accrued, rather than actual profits. This, in turn, was facilitated by the bureaucratic nature of the medical industry, where reporting of costs, payment of bills, and administrative costs are often delayed because of the nature of health care providers. The paper concludes by stating that HealthSound has not been negatively impacted by the allegations of securities fraud and that it is, and will continue to be, a sound company because of the quality its product.
From the Paper "As a part of this presentation, I, as an independent auditor commissioned by the committee of the firm representing the HealthSouth Corporation, wish to make clear that the company I have just audited, though tarred and feathered by the modern media, is not nearly at fault as one might initially believe, given the nature of the following components peculiar to the health services and health care industry. Although HealthSouth's supposed irregularities may have been elided in the public imagination with corporations such as Enron, it is not an ?imaginary corporation.? Mistakes were made, but these mistakes should not cause individuals to forget the ongoing quality of care still provided by the company."
Tags: finances, accountant, bookkeeping, creditors, debt, survival, solvency, tenet, health, care, industry
Abstract This paper provides an overview and background of the budgeting process, including budget planning and the types of budget statements commonly used. An examination of the budgeting process in action is followed by a discussion of some constraints to effective budgeting. An analysis of strategic budgeting as an alternative is followed by a summary of the research in the conclusion.
From the Paper "An old saying advises that, "We don"t plan to fail, we fail to plan.? The budget process was developed to allow companies to better understanding where they have come from, where they are currently, and how they can get where they want to go. According to Jack Welch, then CEO of General Electric, ?The budget is the bane of corporate America. It should never had existed.? Christian Babbini points out that Bob Lutz at Chrysler has made similar statements and a significant number of large European companies such as Ericsson, Volvo, Ikea, SKF and Diageo, have also abandoned the traditional budget or substantially altered the process. The reasons this disillusionment are well-known to everyone: budgets are frequently late, overly political in terms of trade-offs made, take too long to develop, take too many organizational resources and, fail to measure the critical things that make organizations successful in today's fast paced, global economy. In this view, ?The budget becomes God and people manage to the budget and not to the realities of the competitive environment.? This is not to say, of course, that the budgeting process does not have its place and function; it is to say, though, that companies may want to use some of the better alternatives which are available today which provide "what if" analyses and change the budgeting process into a strategic planning tool rather than an annual exercise in stone carving."
Abstract The paper describes ABC as a set of accounting concepts and systems that managers can use to trace historical costs to activities, products, and services. The paper looks at the advantage of ABC for managers.
From the Paper "Activity-Based Costing and its Relationship to
Total Quality Management
What is Activity-Based Costing
Activity-Based Costing refers to the set of value-added or adjusted accounting concepts and systems that certain managers have adopted as a method to ..."
Abstract This paper looks at the need for accurate information for decision making in the business environment. It discusses the value of activity-based costing (ABC) in providing management with accurate overhead attribution to product cost.
From the Paper "GETTING TO KNOW THE ABC'S OF ABC
History of Activity-Based Costing
Cost effectiveness is a key element of business competitiveness (Goulden & Rawlings, 1997). In the competitive business environment, management needs accurate information for decision ..."
Abstract This paper analyzes the key environmental influences on the soft drink and beer industries in the United Kingdom, using the Political, Economical, Social, Technological (PEST) Analysis. It also evaluates the competitive environment by implementing Porters? Five Forces Analysis in order to compare the industries? competitive edge both today and in the future. The second section of the paper presents a SWOT Analysis for the two key players of each industry and illustrates how they respond to the main drivers to change. Finally, the comparable future prospects are discussed in Section Three. The appendix includes an analysis of gathered data for the two industries.
Table of Contents
Introduction
Environmental Influences
I.1 Soft Drinks Industry
I.1.1 Macro Environment ? PEST Analysis
I.1.2 Competitive Environment-Porter's 5 Forces Model
I.1.3 Attractiveness of the Soft Drinks Market
I.2 Beer Industry
I.2.1 Macro Environment ? PEST Analysis
I.2.2 Competitive Environment-Porter's 5 Force Model
I.2.3 Attractiveness of the Beer Market
I.3 Soft Drink Versus Beer Industry-Comparison of the Attractiveness
II Response of Key Players to the Changing Environment
II.1 Soft Drinks Industry
II.1.1 SWOT Analysis of the Key Players
II.1.2 Response of Key Players to Main Drivers to Change
II.2 Beer Industry
II.2.1 SWOT Analysis of Key Players
II.2.2 Response of Key Players to Main Drivers to Change
III Comparable Future Prospects
III.1 Soft Drinks Industry
III.2 Beer Industry
Bibliography
Appendix
From the Paper "The soft drinks market is highly concentrated into the activities of a handful of major companies, led by two dominant alliances. The clear leader is the alliance between Coca-Cola and Cadbury Schweppes, knows as Coca-Cola & Schweppes Beverages (CCSB). Due to the high costs of market entry into a large, national sector such as soft drinks, and the significant resources required to meet distribution demands, it is expected that the soft drinks industry structure will continue to become more consolidated at the top, and increasingly fragmented at entry level."
Abstract The paper discusses advantages and disadvantages of enterprise resource planning, alongside company examples. There is a detailed budgeting analysis included in the paper. The importance of ERP is discussed, and then the cost and benefit of the system are detailed.
From the Paper "Definition ERP: Enterprise Resource Planning (ERP) software, is a business management system that integrates all facets of the business, including planning, manufacturing, sales, and marketing. As the ERP methodology has become more popular, software applications have emerged to help business managers implement ERP. The true ambition of an ERP is the enterprise part. It attempts to integrate all departments and functions across a company onto a single computer system that can serve all those different departments? particular needs. It is normally purchased as an off-the-shelf package, which is tailored by a consultant. A single package can replace many different previous packages. Costs and Benefits of ERP Advantages of ERP ERP offers only one real advantage of Integration, however, it provides a significant boost to the industry provided that it has been implemented correctly taking into mind accurate requirements. (See prior to ERP , Appendix I) By implementing an ERP, a single uniform source of information is used throughout a business. This should lead to a reduction in errors like insufficient inventory levels which could lead to unfulfilled orders which mean unpaid creditors, which in turn leads to poor cashflow management, which we call know leads to a business going under. Innovative works on ERP have focussed on redefining the integration market to include not only point-to-point data and metadata exchange between ERP packages, but the linking of all data sources, object models, and execution architectures--including the Web. Most important of all, speed up to implementation process For e.g. SAP's innovation on its R/3 to the Ready-to-Run R/3 (RRR) is a new program, which makes it easier and faster to implement the R/3."
Abstract This paper provides a comprehensive review and discussion of the relevant literature to define what stock options are and how they are used. An examination of traditional and new valuation methods is followed by a review of current and future trends in expensing stock options. A summary of the research is provided in the conclusion. Two excellent graphics are also provided within the text.
From the Paper "During the past decade, American corporations have granted more and more stock options as compensation, especially for top executives. An option gives the holder the right to buy or sell stock at a specified price by a specific date. If the right to buy shares is set at a low price and the stock goes up, the option holder makes a profit. Critics of the proposed changes argue that options provide vital incentives for skilled employees and executives, especially those who work for risky high-tech ventures. Advocates of reform maintain that options give executives too much incentive to inflate profits falsely to boost the value of their options. Also, they argue that because stock-option costs are not counted in quarterly earnings statements, companies can mask their true cost to investors."
Abstract This report attempts provides insight into Dana Corporation's capital structure. The paper focuses on identifying the company's book value, market value, and the levered value. The report then demonstrates, through a quantitative analysis, what a twenty percent increase in assets will do for Dana Corporation, and assumptions are made to recommend an optimal capital structure mix. The analysis incorporates an estimation of Dana Corp's cost of capital, price per share, and the overall market value of the firm.
From the Paper "The relationship of the stockholder's equity to total liabilities has been shown to be the most significant indicator of a company's solvency because it provides the ratio of capital provided by the stockholders as compared to capital provided through creditors. The information obtained through the analysis in this report provides answers to the ever important question of whether or not a company should issue stock or carry debt. Unsophisticated investors often wonder why a company would purposely carry debt and one excellent motivation derived from the Modigliani-Miller (M&M) model demonstrates that debt can and often is used as a shield against taxes. If a company like Dana decides, therefore, to carry debt, the tax shield would be used to lower overall costs. The next idea then is for a company like Dana to obtain an ideal or optimal mix between debt and equity."
Abstract This paper explains if accounts and financial statements are not maintained, then a check on the company's profit and loss or simple money expenditures cannot be analyzed. The author points out that, even though a check on an organization's financial statement is kept by the accounts department, it is important that the managers understand and keep a check on these reports. The paper relates that members of a health care organization can make use of the guidelines put forward by the AICPA to evaluate the financial statements.
From the Paper "Healthcare organizations deal with a huge mass of people every day. The cash flow statements, the profit and loss account and the balance sheet unveil the potency and feebleness of such organizations. Budgeting can be easily accomplished with the help of financial statements. Budgeting allows healthcare organizations to plan and utilize people's resources, productive aptitude and finance to the fullest."
Abstract This paper explains that Ratio Analysis is an early warning indicator that enables the business owner and manager to spot trends in a business and to compare its performance and condition with the average performance of similar businesses in the same industry. The author relates that Ratio Analysis is done by comparing the specific company's ratios with the average of similar businesses and comparing the business's own ratios for several successive years, watching especially for any unfavorable trends that may be starting. The paper states that the current ratio measures the ability of the firm to pay is current bills, while still allowing for a safety margin above the required amount needed to pay current obligations.
Table of Contents
Liquidity Ratios
Current Ratio
Quick Ratio
Net Working Capital
Activity Ratios
Days Sales Outstanding
Average Payment Period
Fixed Assets Turnover
Total Asset Turnover
Inventory Turnover
Debt Ratios
Debt Ratio
Debt to Equity Ratio
Times Interest Earned
Fixed Payment Coverage Ratio
Profitability Ratios
Gross Profit Margin
Operating Profit Margin
Net Profit Margin
Return on Investment
Return on Equity
Earnings per Share
From the Paper "The ROI is determined by multiplying the Total Asset turnover by the Net Profit Margin. The figure is meaningful because it shows how well a company uses its assets to generate profits,. The basic formula is as follows:
ROI = Total Asset Turnover x Net Profit Margin
The DuPont method allows the firm to break down its return on investment into a profit on sales component and an asset efficiency component. Typically, a firm with a low net profit margin would have a total asset turnover. The relationship between the net profit margin and Total Asset turnover is largely dependent on the industry the firm operates."
Abstract This paper analyzes the specific components of the statement of changes in owner's equity and statements of cash flows from line items to balances in General Electric. The paper discusses the changes in those balances from the prior year, presents possible specific explanations for any changes from the previous year, and suggests how management can use that information in helping the business to achieve its goals.
From the Paper "General Electric still stands tall in the public's estimation and in its international reputation as a pioneer of Six Sigma management policies regarding internal quality control. (Six Sigma, 2004) According to its annual report, GE Share owners? equity increased $8.9 billion, $4.3 billion and $7.9 billion in 2002, 2001 and 2000. Thus, the performance of the General Electric company in sheer dollar terms continues to improve, not simply as a statistical blip between the current financial year and the financial year of the past, but steadily, and over time. The increases were largely attributable to net earnings of $14.1 billion, $13.7 billion and $12.7 billion. These increases were only partially offset by dividends declared of $7.3 billion, $6.6 billion and $5.6 billion in 2002, 2001 and 2000, respectively."
Abstract The overturning of the Glass-Steagall Act has spawned numerous discussions and debates concerning the resulting effects. This paper reviews literature aimed at explaining the effects the FSMA has had on the values of commercial banks, investment banks, and thrifts, as well as the of effect of deregulation on corporate customers and the conflict of interest versus certification of value debates pertaining to commercial banks operating in the securities market.
From the Paper "Studies done to date, in respect to the deregulation of commercial banks, are not sufficient and in some cases may have missed the boat. For instance, the study conducted by Czyrnik and Klein included thrift stocks (a variable of seemingly little importance) and excluded corporate customers. It would be interesting to see the results of a similar study concerning FSMA's effect on the value of corporations who use investment banks compared to those who use commercial banks for underwriting IPOs. A study of this nature would serve well to examine the possible effects of commercial banks tying investment banking to credit offerings. Another possibility for a future study would be to interview investors with question regarding their perceptions concerning conflict of interest or certification of value that may or may not attribute to commercial banks engaging in underwriting securities."
Abstract The paper discusses what interest rates are, who controls interest rates, how interest rates affect an economy, the conundrum of why 30-year interest rates have not increased in spite of all contrary experience, and a conclusion concerning whether interest rates should be increased at a measured or quick pace.
From the Paper "I wonder if when Nostradamus was predicting the end of the world and saw the world awash in flames, what he really saw was the world awash in debt. Presently, because interest rates in the United States are so low, Americans and American businesses have taken out loans at an increased rate to keep pace with their high demand of goods and services. The Bush administration's tax cuts have added fuel to this spending trend also. The purpose for these two actions was to jump start the United States economy; Policies that have been successful. The real GDP has continued to grow at a good pace and the fourth quarter of 2004 growth of 3.1 percent annual rate is an indication of this growth . But what are the consequences of this growth come?"
