Nobody downloaded yet

Business Accounting - Essay Example

Comments (0) Cite this document
Summary
Task 1 The company selected to perform a financial analysis is the computer manufacturer Acer Group. Acer Group is composed of three brands: Acer, Gateway, and Packard Bell. The company is the 4th largest PC manufacturer in the world and third largest notebook producer (Acer-group, 2013)…
Download full paperFile format: .doc, available for editing
GRAB THE BEST PAPER91.5% of users find it useful
Business Accounting
Read TextPreview

Extract of sample "Business Accounting"

Download file to see previous pages Acer Group generated revenues of $14.74 billion in 2012 (Acer-group, 2012). Its revenues decreased by 9.62% in comparison with the previous year. The gross profit of the company was $1.48 billion and its gross margin equaled 10.04%. Gross margin is a measure of the broad profitability of the company. Despite its solid broad profitability the company incurred in net losses for the year of $99.88 million. Its net losses for 2012 were lower than the 2011 losses of $226.59 million. The net margin of the firm was -0.68%. Net margin measures the absolute profitability of a firm. The return on assets (ROA) of Acer Group was -0.04%. ROA indicates how profitable a firm is in relation to its assets (Investopedia, 2013). The return on assets of Acer Group was bad for two reasons. First the metric result was negative. A negative ROA is an undesirable outcome. The second reason is that it was below the computer industry average ROA of 4.4% (Dun & Bradstreet, 2013). The return on equity (ROE) of the firm was -0.13%. Acer Group’s return on equity is much lower than the industry average of 9.7%. The current ratio measures the ability of a company to pay off its short term debt (Accountingexplained, 2013). This ratio is calculated dividing current assets by current liabilities. Acer Group had a current ratio of 1.19. Its current ratio is acceptable because is above the 1.0 threshold, but it is 1.01 below the industry average current ratio of 2.20. The quick ratio is another liquidity metric. It is calculated similarly than the current ratio with the exception that inventory is subtracted from current assets in the numerator of the formula. The quick ratio of Acer Group was 0.89 which is lower than the industry average of 1.50. The working capital of a business is calculated subtracting current liabilities from current assets. Acer Group had a working capital in 2012 of $954,888,000. This metric measures the ability of the company to pay off its short term debt using solely its current assets. The debt ratio measures how much a company relies on debt to finance its assets (Investorwords, 2013). It is calculated dividing total debt by total assets. Acer Group had a debt ratio in 2012 of 0.67. Considering its size the company is not too leveraged which allows the option of using additional debt in the future to expand. The debt to equity ratio of the organization was 0.49. This ratio measures the amount of assets being provided by creditors for each dollar of assets being provided by stockholders (Garrison & Noreen, 2003). The debt to equity ratio of Acer Group is lower than the industry average of 0.82. Acer Group has depended less on debt than its competition. The inventory turnover of the company was 8.91. This implies that the company sold its inventory nearly nine times during the year. The average sale period of the firm was 40.95 days, thus it took the company less than 41 days to sell its entire inventory. The asset to sales ratio of the business was 52.77% which is slightly below the industry standard of 53.40%. The sale to working capital ratio of the firm was 15.43. This ratio is good considering the fact that the industry standard is only 3.50. The times interest earned ratio measures the company’s ability to make interest payments. Acer Group had a times interest earned ratio of 1.25. Task 2 The common stocks of Acer are trading in the market under the symbol ACEIF. The stocks were priced at $3.02 as of December 25, 2013 (Yahoo, 2013). ...Download file to see next pagesRead More
Cite this document
  • APA
  • MLA
  • CHICAGO
(“Business Accounting Essay Example | Topics and Well Written Essays - 1000 words”, n.d.)
Business Accounting Essay Example | Topics and Well Written Essays - 1000 words. Retrieved from https://studentshare.org/finance-accounting/1498390-business-accounting
(Business Accounting Essay Example | Topics and Well Written Essays - 1000 Words)
Business Accounting Essay Example | Topics and Well Written Essays - 1000 Words. https://studentshare.org/finance-accounting/1498390-business-accounting.
“Business Accounting Essay Example | Topics and Well Written Essays - 1000 Words”, n.d. https://studentshare.org/finance-accounting/1498390-business-accounting.
  • Cited: 0 times
Comments (0)
Click to create a comment or rate a document

CHECK THESE SAMPLES OF Business Accounting

Business accounting

... Business Accounting Introduction The economic environment worldwide is ever changing taking into mind the recessions the world has experienced particularly the latest downturn of 2008/2009. Considering Europe in which one of the strongest economies, UK reside, is going through bad times including the case of Euro zone debt crisis which has affected the whole EU as well as the countries relating to it in any means. Europe, which was once considered one of the most successful world segment and was analyzed to take over US as the super power has now been dipped into the midst of debts and turmoil, especially the most indebted cities including Greece, Italy and Spain. Many other hurdles have struck Europe...
8 Pages(1500 words)Essay

Business Accounting

...? New product ideas and innovation have helped the British economy since its foundation. Innovation positively affects the economy because it provides companies with new products that increase revenues. The product idea that I have is a high degree oven that can be attached to existing street vendor equipment or can be sold as a complete vending unit to start your own pizza business. Pizza is a popular meal among British families. The pizzeria marketplace is a multi-billion dollar industry. The market for pizza meals includes the entire population of the United Kingdom of 62.7 million with the exception of babies who do not eat solid foods yet (Culturegrams, 2012). The pizza oven that I invented replaces the utility of a...
4 Pages(1000 words)Assignment

Business accounting

...?Introduction This paper is based on our efforts to document the value of accounting as a system and of the accountants who work on it to business enterprises. The goal of writing this paper includes the identification of concrete uses and application of data that have been generated through both financial and managerial accounting. The specific tasks and duties of an accountant are detailed herein, based on answers provided by a real-life accountant who has been requested to be a part of this research endeavor. An account of the owners of the business enterprise - as the employer of the...
6 Pages(1500 words)Essay

Business accounting

..., D 1998, Purchasing and costing for the hospitality industry, Hodder and Stoughton Educational, London. Fardon, M & Cox, D 2000, Accounting: an introduction to the principles of accounting, Osborne Books Ltd., Bath. Keown, A.J., Martin, J.D., Petty, J.W., and Scott Jr., D.F, 2005, Financial Management principles and applications, Pearson/Prentice Hall International Edition, 10th Edition. Wood, F 2002, Frank Wood's business accounting. - 1, Financial Times Prentice Hall, Harlow.... Running Head: FINANCIAL REPORT Financial Report in Harvard Style by 12 March 2007 0. Introduction The performance of a business organization is quantitatively reflected in its financial statements. Ascertaining the financial health of a company...
4 Pages(1000 words)Essay

Business Accounting

...Business Accounting a) Calculation are based on low level of risk assumed by the company and this level the risk adjusted discount rate (RADR) is given at 10%. Comparing the net present value of investment the alternative (ii) is preferred because present value of the investment in alternative (ii) is lower than the alternative (i). b) Assessment using Payback method Investment on new equipment $128,000 Year Cash flow Cumulative cash flow $ $ 1 40,000 40,000 2 80,000 120,000 3 30,000 150,000 4 12,000 162,000 The payback period of investment using payback method is three years. It is not possible to take risk based decisions under this method, because risk is function of time as well as...
4 Pages(1000 words)Essay

Business accounting

.... Moreover, the liquidity crunch problem makes the performance of Whole Foods Market, Inc. slightly vulnerable. SOLVENCY RATIO Debt to Equity: Dependency on debt financing is not a bad habit but it has consequences if you rely on more. Whole Foods Market, Inc. debt to equity ratio is lower in comparison with the previous year. The factors of business volume, Inc.rement in sales, fulfilment to pay the suppliers and acquisitions of fixed asset. Due to the expansion in business, Whole Foods Market, Inc. has plenty of financial obligations, most of which has been acquired through debt. In 2008, Whole Foods Market, Inc. reliance more on debt financing as compare to the previous years. Interest Coverage Ratio...
2 Pages(500 words)Assignment

Business accounting

...(Framework 24). Understandability A crucial feature of the information furnished in financial statements is that it has to be promptly apprehensible by users. For this reason it is assumed that users have a rational knowledge of business and economic actions and accounting and a temperament to analyse the information with sensible thoroughness. But certain information with regard to complex matters, just because they are difficult to understand by users cannot be excluded. Such information is important from the view of its significance to the economic decision-making needs of users (Framework 25). Relevance If the information depicted by the financial statements is to be relevant for its users then such...
6 Pages(1500 words)Essay

Business accounting

...quality organic poultry feed at a reasonable price.. The first step of this transformation is the writing of a business plan. This plan is being used as an internal document to assist in the development of the business. The Industry Poultry feed industry is not a new one in the market; it has developed with the poultry management practices. The industry has an elastic growth with the growth in demand for poultry. However, the traditional poultry feed industry, which is in China and Africa, comprises mostly of either local farmers who sell their by-products of grains to poultry farmers of fishermen who sell the dead fish. No research and development has been made on a large scale in this industry in...
7 Pages(1750 words)Essay

Business/Accounting

...According to Alberta’s Climate Change Program Strategy, the greenhouse gas can be accounted for. The government of Alberta has designed come up with a climate change strategy. There is a specified gas emitter’s regulation. The regulation considers the threshold or target or price, the ways of complying with the regulations and the context within which the greenhouse gasses are emitted (Bennett, Jan, & Teun, pp 122-2234). The Alberta has an offset system with an overview and the offset protocols, which applies the carbon capture and storage protocol. An accounting system has been established for verification and auditing of the entire system to ensure adherence to the regulations and the set standards. ...
2 Pages(500 words)Essay

BUSINESS ACCOUNTING

...Business Accounting and International Standards Introduction Accounting standards are very important in that they make it possible for standard financial reports to be produced. This makes it possible for the profession of accounting to be standardized and therefore information sharing among parties and different stakeholders becomes easy. This need for a standardized accounting procedure has led to many standardization bodies to be founded in order to help in achieving standardization (Delaney, 2010). All countries in the world have their standardization body. However, according to Edrey (2011), as time has gone by, the requirement for a central global...
7 Pages(1750 words)Assignment
sponsored ads
We use cookies to create the best experience for you. Keep on browsing if you are OK with that, or find out how to manage cookies.

Let us find you another Essay on topic Business Accounting for FREE!

Contact Us