4. What inventory method is used to value inventories? Does this method reflect current cost at year-end? The inventory method of FIFO(First In First Out) is used to value inventories. However, this cost is matched with the lower cost and market cost from both of them is applied to the compute of inventory
Efficiency Ratios The efficiency ratio is used to measure how the company uses its assets and liabilities internally, these ratios to measure the performance in short term. • Accounts Receivable Turnover This ratio used to measure the firm's effectiveness in extending credit and in collecting debts. The receivables turnover ratio is an activity ratio measuring how successfully a In collecting its AR during the year, if the company has AR turnover 2 that means the AR turned over two times during the year. Accounts Receivable Turnover= Credit sales AR average (assume that 75% sales are credit) AVON= 9.1 ULTA= 41.1 REVLON= 4.12 • Fixed Asset Turnover, Reflecting how efficiently a company has used its assets to generate revenue, a higher ratio indicate of greater efficiency in managing and investing fixed-asset. Fixed Asset Turnover= Net sales/ net assets EVON= 1.63 ULTA= 1.9 REVLON= .77 • Inventory turnover Inventory turnover is a ratio showing how many times a company's inventory is replaced over a specific period of time, the higher ratio the more success is the company in selling its inventory.
External versus Internal Hiring: knowing when to develop or acquire talent can be cost-effective for the organization. To control this process, measuring the fundamental knowledge and commitment of internal hires can reduce or eliminate the cost altogether. External hires are gauge through originality and a larger pool of applicants. Goal Attainment: Goal achievement measures the acknowledgment, obligation, inconvenience, and continuous response to the goal progress. Conclusion The use of metrics in business as a computable quantify helps an organization to examine, follow and evaluate the accomplishments and dissatisfactions of the organization.
The identification of SWOT is important because they can inform later steps in planning to achieve the objective. SWOT analysis is a tool to analyze the internal and the external factors that is stands for strengths and weaknesses, opportunities and threats. Firstly, strengths describe the core competencies of a business, strategic factors that may make a certain extend more likely to succeed where the commerce may have positive points over other comparable businesses. For instance, Cravia has harmony and chemistry between workers, people and groups. This agreement makes a difference in encouraging the work and assignments.
Under time period assumption, we prepare financial statements quarterly, half-yearly or annually. Theincome statement provides us an insight into the performance of the company for a period of time. Thebalance sheet (also known as the statement of financial position) provides us a snapshot of the business ' financial position (assets, liabilities and equity) at the end of the time period. The statement of cash flows and the statement of changes in equityprovide detail of how the company 's financial position changed during the time period. One implication of the time period assumption is that we have to make estimates and judgments at the end of the time period to correctly decide which events need to be reported in the current time period and which ones in the
The ratio measures the average number of times receivables have been collected within the year, and is calculated by dividing net credit sales (which are net sales less net cash sales) by the average gross accounts receivable over the past year (Principles of Accounting II 2012). Boeing Co.'s receivables turnover improved from 2009 to 2011. In 2009, receivables were collected about 13.4 times per year with an average collection period for receivables being around 27 days. In 2010, receivables were collected about 11.9 times per year with an average collection period for receivables being around 31 days. In 2011, receivables were collected about 12.9 times per year with an average collection period for receivables being around 28 days.
Master Budget Elements A master budget is an expectation, or a statement based on sales, volume etc. for an upcoming period (Shim, J. K., & Siegel, J. G. (2012). The master budget contains a pro forma income, a pro forma balance sheets, and a cash budget. Generally, a master budget is a plan or standard at the beginning, but it ends up amounting to a control device that helps to measure plans for management. This also helps management improve future performances.
Alignment Type and Maturity Introduction In today’s world enterprise and business always look for transform IT infrastructure services to gain flexibility and scalability. IT always looks for reducing total cost of ownership and bringing competitive solution for an enterprise success. Business are accepting the fact of IT as crucial department and plays an important role and it is necessary to have a strategy which will improve partnership between Business and IT and prepare an organization to sense and act on frequent changing market dynamics. A strategy should align a business and IT in such a way that it helps a company to grow and will transform a processes and IT infrastructure. A strategy can be plan through planned framework and
Everything Aldi does is focused around providing its customers value for money. Due to their cost focused competitive strategy, Aldi is efficient and cuts costs, so they can then invest profits back into the business. They can then be used to further meet its business objectives for growth. Aldi uses four strategies in their cost focused agenda, which hare time-based management, continuous improvement, just-in-time production, and volume purchasing(BusinessCaseStudies). Primarily, Aldi uses time-based management to reduce the time wasted in business operations through the use of their multi-skilled and flexible workforce.
The success of any business in the field is determined by the frequent decisions made not only by the managers at top levels but also managers of significant projects. Decisions in business are closely affected by risks involved in the implementation of strategic business goals and general future plans. Therefore managers need to spend more time in the decision-making process so that the possible outcomes in future are successful. In business a good decision is recognized when the idea achieves two objectives, one being the desirability of each outcome delivered and secondly likelihood of the choices made in generating different outcomes. Generally, good decisions require good judgment as well as greater prediction of final outcomes.
The finance department will also manage the sources of capital funds, provide data for long-range financial planning and the board’s annual goal for investments, and prevents distortion of costs or benefits in proposals (White & Griffith 2010, p. 432). Evaluating a potential new opportunity should always include the operating units involved and internal consulting. A budget of capital expenses and new programs is developed separately and approval or denial for each has to be obtained. The objective of any HCO is to make a profit each year. Profit can be defined as the difference between the amount earned and the amount spent on expenses used to provide goods and services.