How does Net Sales change during these three years? What could be the reason for the change in Net Sales in 2011? According to the Risk factors mentioned in the Financial Statements, factors such as current economic conditions, timing of new merchandise releases and promotional events, changes in merchandise mix, success of marketing programs, and weather conditions are the main factors that affect sales in a company such as The Gap Inc. 4. What was the change of Retained Earnings from the year 2010 to 2011? Retained earnings increase by $597.00 they raised from $11,767.00 to $12,364.00, an increase approximately of 5.07% And what was the Net Income for the year 2011?
Fuel expenses grew at a faster rate than sales, fuel costs although seeing a fall off in 2009 by 20.52% rose by 29% in 2010. These costs continue to a major challenge for the company as referenced in the 2010’s annual report. Likewise, generation expenses will also increase when fuel increases as oil is the largest expense in that process. Due to efficiencies in the generating plant, the increases in costs were lower than that of fuel. Distribution expenses rose significantly in 2010 by 10.12% from 1.18% in 2009.This was as a result of Hurricane Tomas in 2010 as the distribution network was significantly impacted when several power lies were damaged.
Does this source appear on the financial statements? 1. Looking at the historical income statements, we can see that income from operations is down, interest expense is up, interest income is down income before taxes is low. If you are anticipating a business to grow, these things should be growing, rather than declining as they are on the income statements. When looking at earnings per share, we can see that between May 2003 and August 2004 they issued more shares, probably because of their expansion.
The asset turnover will increase when their profit margin increases, the high profit margin is because they are currently expanding . 2. To a certain extent, the high level of popularity was from their effective market analysis. In 2012 superstyles spent 20% of their profits on marketing. Compared to the industry average superstyles spends 50% more on marketing, however I think it is very useful as they are expanding and don’t have the brand image and reputation yet.
Further it increased both sales and net income by 54% and 28% vs. 1993, but the company has a problem of a liquidity and a shortage of cash. One of the biggest indicators of this problem is almost double decrease in quick ratio in 2 years (Exhibit 1). This means that the company has a decrement of current assets (not considering inventory) comparing to current liabilities by 0.66. Another factor which helps us understand the reason for shortage is Cash Cycle, which consists of Average Collection days and Average Inventory days subtracted by Average Payment days. This indicator is increasing dramatically by almost 11 days in two years, because of increase of Collection and Inventory days by 16 and minor increase of Payables days by 5 (Exhibit 2 and 3).
Technology in all industries has increased dramatically over the past 10 years so being able to understand the current value of marketing methods should not be as strenuous as it has been in the past. 2. From an accounting prospective, what potential problems ensue from this calculation? a. From an accounting prospective, the major problem with the calculations mentioned in the article is determining the rate of return and length of the marketing investment.
Audi's global sales rose 8.3% to 1.58 million vehicles in 2013 however despite the increase in revenue, the net profit fell 7.7% ($5.57billion) and the operating profit margin fell to 10.1% from 11% the previous year. Based on this one could assume Audi is experiencing diseconomy of scale. But when you dig deeper into their situation the reasons for a lower net profit is not because of a “per-unit” cost of production which would truly mean they are operating as a diseconomies of scale. The true reasons appear to be because of their expansion investments. As per the article Audi “warned that profit would be hit by investment in new models and tougher climate regulation”.
2. A steady upturn in the industry leading to regular profits from 2011 onwards. However, industry experts predict a continuance of difficult trading conditions. Additional Information. There is
Krispy Kreme has tampered with its financial statements ranging from 2000 to 2004 when they could not make its revenue targets to satisfy Wall Street. We found many discrepancies from the years after analyzing the income and the balance sheet statements in Exhibit 1. The balance sheet and the income statement had undergone major changes, particularly in years 2003 and 2004. While examining the balance sheet, we noticed the cash account nearly tripled from 2001 to 2004, total equity exceeded debt hence the reason for the low debt to equity ratio. The income statement’s total revenues doubled in two years due to their unusual growth.
Capital expenditure of $155,000 was incurred during last 2 years. Increase in invested capital reduced both IGR and SGR. As sales growth rate was higher than IGR and SGR, firm had to rely on trade credits and trade notes, besides internal accruals and bank notes to finance its cash outflows. Projections for 1996 are based on information provided and other assumptions described in excel sheets viz. all trade notes will be fully paid and trade credit of 10 days is for additional purchases made from April 1, 1996.