John also happens to be an avid reader of the financial statements of X Co. and...

John also happens to be an avid reader of the financial statements of X Co. and wonders whether the information in the Management Discussion and Analysis section has any usefulness. He investigates and learns that when the economy has been good, management has forecast good prospects for the firm 95% of the time. When the economy has been bad, management has forecast good prospects 50% of the time. These predict good times ahead.

What is John's revised belief that the economy will be good?

Expert Solution

John revised belief that the economy will be good is addressed by his theories regarding the economy to his theories. He believes in providing full employment and considers government interference as a way to stop economic recession. According to john, there is a close relationship between economy growth and management prospects. The economic theories, he believed that government plays an important role in a economy to be called good by increasing the taxes and increase the spending.

Yes, Management discussion and analysis (MD&A) is an important sector for providing useful information for the economic growth in the following ways:

1. Surveys and annual reports of company’s management imply that higher management quality will leads to more productivity, profitability and growth. This also helps to increase longevity of firms.

2. The workers are also needed to be skilled; this means that employing more employees will also help to improve the skills of the employees. Therefore, management of the businesses has a direct relation with economic growth.

3. The economy grows at a faster pace if the management has forecasts good prospects. On the other hand the economy face challenges when the management show less good prospects.

4. Organization structures, competition, workers, and planning seem to be important in examining the quality of management practices.

So, john advocated that the best method to pull an economy out of a depression is for the government increase demand by infusing the economy with capital to spend. This also shows good management prospects ahead.

Rahul Sunny answered 1 year ago

Suppose Rina is an avid reader and buys only mystery novels. Rina deposits $4,000 in a...

Suppose Rina is an avid reader and buys only mystery novels. Rina deposits $4,000 in a bank account that pays an annual nominal interest rate of 15%. Assume this interest rate is fixed—that is, it won't change over time. At the time of her deposit, a mystery novel is priced at $20.00. Initially, the purchasing power of Rina's $4,000 deposit is.......... mystery novels. ??????? For each of the annual inflation rates given in the following table, first determine the new...

John Carter also prepared the quarterly and annual 2017 income statements based on normal costing and...

John Carter also prepared the quarterly and annual 2017 income statements based on normal costing and based on standard costing. Write a memo to management describing how these two costing systems differ. Discuss which of the two approaches would be more helpful in controlling operations during the year.

Comments using # and "" "should also be included for reader to understand each part. Question:...

Comments using # and "" "should also be included for reader to understand each part. Question: 14. Write in python a script code which tells the user to enter an integer bigger than 5. Any input numbers which are smaller than 5 or 5 are not considered by this script. The code then should output all the prime numbers starting at 5, which are smaller than the number inputted by that user.

Research Problem 2. Your client, John Butler, is an avid Houston Astros fan. Last March at...

Research Problem 2. Your client, John Butler, is an avid Houston Astros fan. Last March at the Astros’ home opener, as a result of a random drawing of those in attendance at the game, John won 300 Shipley Do-Nut coupons. Each coupon entitled him to a cup of coffee and a free doughnut or a dozen doughnut holes. John used some of the coupons (approximately 20), but he found that eating so many doughnuts directly conflicted with his goal of...

2. What happens when a company tries to consolidate a foreign subsidiary’s financial statements into its...

2. What happens when a company tries to consolidate a foreign subsidiary’s financial statements into its own? What kind of rules should it follow in consolidated financial statements involving foreign subsidiary’s operations under IFRS? (10%)

What happens when a company tries to consolidate a foreign subsidiary’s financial statements into its own?...

What happens when a company tries to consolidate a foreign subsidiary’s financial statements into its own? What kind of rules should it follow in consolidated financial statements involving foreign subsidiary’s operations under IFRS?

Desh Bondhu Polymer Co. prepare a financial plan. Use the financial statements and the other information...

Desh Bondhu Polymer Co. prepare a financial plan. Use the financial statements and the other information provided in what follows lo prepare the financial plan Desh Bondhu Polymer Statement of Profit & Loss ‘000 Particulars Actual figure of the year 2019 Initial forecast ( fort the year 2020) Sales Revenue Less: Cost of Goods sold Gross profits Less: Operating expenses Less: Depriciation EBIT Less: Interest EBT Less: Taxes @ 40% Net income Less: Cash Dividends To retained earnings Tk 15,000...

Eagle has an accountant, John Steinbell, prepare its financial statements and to prepare the tax returns....

Eagle has an accountant, John Steinbell, prepare its financial statements and to prepare the tax returns. While the financial statement show a profit for the company, John takes a very aggressive stance in allowing expense deductions from income, resulting in the company showing a significant loss on the tax returns for two years. After Eagle is audited by the Internal Revenue Service, the IRS does not allow many of the deductions and charges Eagle not only for the tax owed...

Togo Co. has the following financial statements. Togo Co. Income Statement for the Year Sales revenue...

Togo Co. has the following financial statements. Togo Co. Income Statement for the Year Sales revenue $18,000,000 Less: Cost of goods sold 12,000,000 Gross profit $ 6,000,000 Less: Operating expenses $3,700,000 Depreciation 500,000 4,200,000 Operating income $ 1,800,000 Less: Interest expense $ 100,000 Income taxes 800,000 900,000 Net income $ 900,000 Togo Co. Balance Sheet at the End of the Year Current assets: Cash $1,000,000 Accounts receivable 3,600,000 Inventory 2,400,000 $7,000,000 Long-term assets: At cost $5,000,000 Accumulated depreciation 3,000,000 2,000,000 Total...

X Company is a service company and prepares monthly financial statements.

X Company is a service company and prepares monthly financial statements. In April, it billed customers $405,000 for services it provided; in May, it billed customers $369,000 for services it provided.In May, the company received $281,000 from its April customers and $273,000 from its May customers.Which of the following amounts will appear on X Company's May Income Statement and Statement of Cash Flows?a. both statements, $369,000b. Income Statement, $369,000; Statement of Cash Flows, $554,000c. Income Statement, $554,000; Statement of Cash...

Question