http://seekingalpha.com/article/37536-a-comparative-analysis-of-two-steel-producers-gerdau-sa-and-nucor
Summary:
This article compares the financial positions of two steel producing companies called Gerdau SA and Nucor. Since they are from different countries with different currencies, it would be difficult to compare their progress just by looking at their dollar values, therefore William Trent (the author of the article) had to assess both companies by calculating and looking at their ratio values. The financial statements showed in this article revealed that Nucor is much more efficient at handling inventory and that their inventory on hand averaged 33.7 days, while Gerdau SA's was 84.1. As the article goes on, it starts to bring in more ratios to compare the two companies, like the accounts receivable turnover, days sales outstanding, asset turnover ratio, current/equity ratios, solvency ratio, and lastly, profitability ratios. It was determined that Nucor was far more superior to Gerdau in operating their company.
Connection:
There were a topics in this article that relates with chapter 15 in the accounting textbook. Since the two companies were using different currencies, a lot of new ratios were brought in and introduced to us. There were also a few ratios that were used and that we remember like the current ratio, equity ratio, and the inventory turnover ratio. Although the textbook says that not all lines of business have the same rate of turnover, it doesn't apply in this case because both Nucor and Gerdau SA produce steel. Some reasons for this significant difference in financial position could do with the demand in their countries. It was also brought to our attention that there are a lot more ratios out in the real business world that haven't been discussed in the textbook.
Reflections:
I think that this article brought up many interesting points. It showed us that there are many processes to go through when regarding a companies progress. Many ratios are needed to make a correct judgment, along with a company's financial records from at least 5 years ago. I think that Nucor was able to create more profit because there's a higher demand for steel in the U.S., where Nucor is situated, while the demand for steel is much lower in Brazil, which is where Gerdau SA is situated. Nucor had nearly dominated Gerdau SA in every financial aspect, resulting in a huge difference in profitability.
Monday, April 6, 2009
Wednesday, March 11, 2009
CH 16: Reviewing timecards for double-dipping police
http://findarticles.com/p/articles/mi_qa3720/is_200011/ai_n8927978
Summary
This article is about Orange County's sheriffs filing timecards that if traced, shows that they were working at two jobs at the same time. A man called Christopher Mele went through piles of paperwork and discovered that a total of nine officers had committed this offense. The term used in this article for describing the act of filing time cards showing you doing two different things at the same time is "double-dipping". Christopher Mele had to go through the history of 32 deputies including the times that they took vacations and had sick days. The results showed that a total of nine officers committed 125 hours of "double-dipping". The consequences were suspension, getting fired, and worst of all, getting a criminal record.
Connection
The connection between this article and chapter 16 of the accounting textbook was timecards. These nine officers tried to find loopholes around the timecard policy to make their lives easier. They cheated their employers and when they were found out, they suffered severe consequences. This article shows that, although this plan might work out well in the beginning, if someone suspects something fishy about your work history, then you can expect you'll be getting some major difficulties in the future. Although the article doesn't mention it, some extra consequences for these types of crime offenders might be a fine totaling up to more than the amount cheated off your employer.
Reflection
I found that this article was quite interesting. I've read and heard about many ordinary citizens committing this crime, but never thought that policemen would do the same. We all think that policemen would know better after all those long years of studying law. Unfortunately, in this situation, I think that the crime offenders had it coming and that they should have been more consientious about their actions. Honestly, I think they also didn't have to commit this crime because their present wages aren't too shabby. This incident doesn't occur very often, but if it does and word gets out to the public, it could ruin the reputation of the police force greatly.
Summary
This article is about Orange County's sheriffs filing timecards that if traced, shows that they were working at two jobs at the same time. A man called Christopher Mele went through piles of paperwork and discovered that a total of nine officers had committed this offense. The term used in this article for describing the act of filing time cards showing you doing two different things at the same time is "double-dipping". Christopher Mele had to go through the history of 32 deputies including the times that they took vacations and had sick days. The results showed that a total of nine officers committed 125 hours of "double-dipping". The consequences were suspension, getting fired, and worst of all, getting a criminal record.
Connection
The connection between this article and chapter 16 of the accounting textbook was timecards. These nine officers tried to find loopholes around the timecard policy to make their lives easier. They cheated their employers and when they were found out, they suffered severe consequences. This article shows that, although this plan might work out well in the beginning, if someone suspects something fishy about your work history, then you can expect you'll be getting some major difficulties in the future. Although the article doesn't mention it, some extra consequences for these types of crime offenders might be a fine totaling up to more than the amount cheated off your employer.
Reflection
I found that this article was quite interesting. I've read and heard about many ordinary citizens committing this crime, but never thought that policemen would do the same. We all think that policemen would know better after all those long years of studying law. Unfortunately, in this situation, I think that the crime offenders had it coming and that they should have been more consientious about their actions. Honestly, I think they also didn't have to commit this crime because their present wages aren't too shabby. This incident doesn't occur very often, but if it does and word gets out to the public, it could ruin the reputation of the police force greatly.
Tuesday, March 3, 2009
CH 15 Blog
http://seekingalpha.com/article/67819-delta-northwest-evaluating-company-performance-in-a-dysfunctional-industry
Summary: This blog is about the present financial state of a few American airlines. Over the past years the Air Transportation Association of America had lost an estimated value of 22 billion dollars, but although they suffered this huge loss, they still managed to gather $1,866 billion revenue, so they are not completely going downhill. Some of these reasons include the fact that the airlines have planes worth up to $100 million each, but are not easily liquidated. The second reason is that they depend heavily on skilled labor. Another reason would be that the airlines industries can't lure customers to pay for their tickets because they can't advertise well enough. Most people know that there is a slight chance of death when boarding a plane. It goes on talking about how some airlines want to merge their companies with others, which isn't a good idea according to this article.
Connection: This article relates to chapter 15 because it is talking about how a business is doing and it even shows this by presenting a table which reports the transaction costs and market cap(cost of the stocks of a company). By looking at this, we can evaluate how well the company is doing financially. They also changed the values into percentages which makes evaluating more simple and obvious. The table is comparing the transaction costs and market caps of 6 companies. In this case, Delta took the lead with a total M&A transaction costs of $10.5 billion.
Reflection: This article states that the merging of airlines companies is bad and I also agree. If the companies merged then the number of shareholders would double, therefore the share prices would not rise either. In this case DAL+NWA merged, but they turned out to be the lowest ranked of the 5 airlines. We know this because it was all due to the information and knowledge that was given to us by the table that accurately analyzed the transaction costs and market caps of the companies. Information on an analysis sheet with numbers is more believable than a sheet with only words on it.
Summary: This blog is about the present financial state of a few American airlines. Over the past years the Air Transportation Association of America had lost an estimated value of 22 billion dollars, but although they suffered this huge loss, they still managed to gather $1,866 billion revenue, so they are not completely going downhill. Some of these reasons include the fact that the airlines have planes worth up to $100 million each, but are not easily liquidated. The second reason is that they depend heavily on skilled labor. Another reason would be that the airlines industries can't lure customers to pay for their tickets because they can't advertise well enough. Most people know that there is a slight chance of death when boarding a plane. It goes on talking about how some airlines want to merge their companies with others, which isn't a good idea according to this article.
Connection: This article relates to chapter 15 because it is talking about how a business is doing and it even shows this by presenting a table which reports the transaction costs and market cap(cost of the stocks of a company). By looking at this, we can evaluate how well the company is doing financially. They also changed the values into percentages which makes evaluating more simple and obvious. The table is comparing the transaction costs and market caps of 6 companies. In this case, Delta took the lead with a total M&A transaction costs of $10.5 billion.
Reflection: This article states that the merging of airlines companies is bad and I also agree. If the companies merged then the number of shareholders would double, therefore the share prices would not rise either. In this case DAL+NWA merged, but they turned out to be the lowest ranked of the 5 airlines. We know this because it was all due to the information and knowledge that was given to us by the table that accurately analyzed the transaction costs and market caps of the companies. Information on an analysis sheet with numbers is more believable than a sheet with only words on it.
Monday, December 8, 2008
CH 14: Costly Credit Card Trends
http://www.onlinequotes.com/costly-credit-card-trends.php
Summary:
This article talks about the continuing trends of credit cards and how they could prove to be a costly problem in the future. As the credit card industry is growing and evolving, the interest rates are increasing along with it. Although many people carry credit cards today for convenience it's not always in the consumers benefit because there are many problems that can occur at any time. Many credit card companies have been luring in consumers by advertising rewards for a certain amount of money you use on the card, but little do we know, companies are always scheming to make the rewards more difficult to earn and limiting the amount you can earn each year. In the last ten years, late fees haven't been much of a problem, but as the credit card companies develop, the fees have been increased and more demanding. Identity theft is a major problem if you lose your credit card. Carrying large amounts of cash out would also be problematic, but losing your credit card could cost you even more trouble. As the companies develop, some problems arise with it.
Connection:
The connection I made in this article with chapter 14 is usage of bank credit cards. Credit cards have made our society a lot different from before, so that we can visualize it as cashless. Although credit cards have offered us much convenience, it could offer us even more inconvenience if we were to become too dependent on them. For example, if a person always used their credit card for everything, and one day they lost it, there is a risk that someone might use the credit card for their own use and could greatly damage the owner financially. Also, credit cards could pose to be financially troubling if you fail to meet deadlines where you have to pay the bank the amount you owe, resulting in interest adding up to your late fees.
Reflection:
I understand that people nowadays prefer credit cards over cash, but it might not always be in their best interest in mind. In the next few years, late fees and interest rates will no doubt increase dramatically along with the development and evolution of credit card companies. I predict that there will be new trends in the future where people will start to turn back into using cash because they want to save money and not pay extra fees due to the increasing rates of interest fees and due to the fact that everything is getting more expensive.
Summary:
This article talks about the continuing trends of credit cards and how they could prove to be a costly problem in the future. As the credit card industry is growing and evolving, the interest rates are increasing along with it. Although many people carry credit cards today for convenience it's not always in the consumers benefit because there are many problems that can occur at any time. Many credit card companies have been luring in consumers by advertising rewards for a certain amount of money you use on the card, but little do we know, companies are always scheming to make the rewards more difficult to earn and limiting the amount you can earn each year. In the last ten years, late fees haven't been much of a problem, but as the credit card companies develop, the fees have been increased and more demanding. Identity theft is a major problem if you lose your credit card. Carrying large amounts of cash out would also be problematic, but losing your credit card could cost you even more trouble. As the companies develop, some problems arise with it.
Connection:
The connection I made in this article with chapter 14 is usage of bank credit cards. Credit cards have made our society a lot different from before, so that we can visualize it as cashless. Although credit cards have offered us much convenience, it could offer us even more inconvenience if we were to become too dependent on them. For example, if a person always used their credit card for everything, and one day they lost it, there is a risk that someone might use the credit card for their own use and could greatly damage the owner financially. Also, credit cards could pose to be financially troubling if you fail to meet deadlines where you have to pay the bank the amount you owe, resulting in interest adding up to your late fees.
Reflection:
I understand that people nowadays prefer credit cards over cash, but it might not always be in their best interest in mind. In the next few years, late fees and interest rates will no doubt increase dramatically along with the development and evolution of credit card companies. I predict that there will be new trends in the future where people will start to turn back into using cash because they want to save money and not pay extra fees due to the increasing rates of interest fees and due to the fact that everything is getting more expensive.
Thursday, October 30, 2008
Cash discounts in the offing.
http://www.business-standard.com/india/storypage.php?autono=335001
Summary: This article tells how buyers in India are reluctant to purchase houses and residents, and that because of this, developers are planning to use discounts to resolve this issue. Due to falling sales of residents over the last few months, developers are forced to offer cash discounts. There were price cuts of 5-15 percent at the start of their buying season in hopes that people would purchase more houses. The main reason why buyers stray away is because in recent years real estate prices have increased by about 400 percent and home loan rates have gone up from 7%-11.5%. In larger towns, sale prices have dropped by about 30%-40%, and in smaller towns about 25%. The government also chipped in by allowing developers to develop twice as much on the same piece of land, but the housing industry is still under attack. If the developer's cash discounts don't lure in enough buyers, then sale rates will continue to plummet even lower.
Connection: The connection I found was in this article, cash discounts were also needed to encourage customers to purchase in their business. In the perspective of the developers in India, they are relying very heavily on cash discounts to lure buyers in and to increase their sales rates. It was also stated that in the article the developers did not want to give cash discounts and reveal that their businesses were under pressure. I think that this could also apply to other businesses. For developers in India, if their cash discount method does not prove to solve their problem, there is a chance that they could get bankrupt.
Reflection: I personally think that their government could do a little more than just giving permission to developers to develop twice as much. I think that they could try decreasing home loan rates. The best thing their government could probably do is to use their tax payers' money more wisely and lower taxes on goods so people could save more money to afford better homes. Advertising could also be of great aid to the developers. Not only locally, but if the developers advertised their residents globally, I'm sure they could lure in a few customers willing to buy housing in India. If I were a developer in India I would suggest that I try advertising to overpopulated countries like China that there are residents in India for cheap.
Summary: This article tells how buyers in India are reluctant to purchase houses and residents, and that because of this, developers are planning to use discounts to resolve this issue. Due to falling sales of residents over the last few months, developers are forced to offer cash discounts. There were price cuts of 5-15 percent at the start of their buying season in hopes that people would purchase more houses. The main reason why buyers stray away is because in recent years real estate prices have increased by about 400 percent and home loan rates have gone up from 7%-11.5%. In larger towns, sale prices have dropped by about 30%-40%, and in smaller towns about 25%. The government also chipped in by allowing developers to develop twice as much on the same piece of land, but the housing industry is still under attack. If the developer's cash discounts don't lure in enough buyers, then sale rates will continue to plummet even lower.
Connection: The connection I found was in this article, cash discounts were also needed to encourage customers to purchase in their business. In the perspective of the developers in India, they are relying very heavily on cash discounts to lure buyers in and to increase their sales rates. It was also stated that in the article the developers did not want to give cash discounts and reveal that their businesses were under pressure. I think that this could also apply to other businesses. For developers in India, if their cash discount method does not prove to solve their problem, there is a chance that they could get bankrupt.
Reflection: I personally think that their government could do a little more than just giving permission to developers to develop twice as much. I think that they could try decreasing home loan rates. The best thing their government could probably do is to use their tax payers' money more wisely and lower taxes on goods so people could save more money to afford better homes. Advertising could also be of great aid to the developers. Not only locally, but if the developers advertised their residents globally, I'm sure they could lure in a few customers willing to buy housing in India. If I were a developer in India I would suggest that I try advertising to overpopulated countries like China that there are residents in India for cheap.
Sunday, October 12, 2008
http://www.canada.com/vancouversun/news/business/story.html?id=735123
Summary
The inventories of unsold homes in Canada have risen, this causes more pressure on the house prices. People are trying to unwind the inventory by pushing down the value of mortgage and this by doing this, it's impacting banks and the ability of people to obtain financing. In places like the United States, it's believed that housing will fall below the one millionth mark. One example of this is Detroit, where the imbalance of demand and supply is very noticeable. It's also believed that now the lower the level of housing starts, the better.
Connection
For things like the prices of housing and land, information should be updated regularly, sort of like the perpetual inventory system. Updates every month or so on house prices would allow people to better understand how the economy is doing, just like how a manager of a store can keep an eye on their inventory.
Reflections
If I were a house salesman, or if I would like to sell a house, I would definitely need updated information on how the land and housing values are doing. If I was trying to sell a house and I overpriced it without any knowledge of how the economy was doing, I probably won't get my house sold. I would also have to know if there is any demand for houses because if there was a high demand for housing, I would obviously increase the selling price of my house. So I think that up to date information on how the economy is essential for things like housing.
Summary
The inventories of unsold homes in Canada have risen, this causes more pressure on the house prices. People are trying to unwind the inventory by pushing down the value of mortgage and this by doing this, it's impacting banks and the ability of people to obtain financing. In places like the United States, it's believed that housing will fall below the one millionth mark. One example of this is Detroit, where the imbalance of demand and supply is very noticeable. It's also believed that now the lower the level of housing starts, the better.
Connection
For things like the prices of housing and land, information should be updated regularly, sort of like the perpetual inventory system. Updates every month or so on house prices would allow people to better understand how the economy is doing, just like how a manager of a store can keep an eye on their inventory.
Reflections
If I were a house salesman, or if I would like to sell a house, I would definitely need updated information on how the land and housing values are doing. If I was trying to sell a house and I overpriced it without any knowledge of how the economy was doing, I probably won't get my house sold. I would also have to know if there is any demand for houses because if there was a high demand for housing, I would obviously increase the selling price of my house. So I think that up to date information on how the economy is essential for things like housing.
Subscribe to:
Posts (Atom)