You have formed a new sole proprietorship and your primary business is buying and selling fine art. Your business is not publicly traded so you can choose to use the cash basis method or the accrual method for your business. Which would you use and why?

To evaluate competitive advantage, we must be able to assess the firm's performance -- are they financially successful? Choose a publicly traded company(Microsoft, Amazon etc).For this company and the company's main competitor create a Table/Chart AND a graph in Excel reporting the following information for 2016-2018 : Gross Revenues (sales), Gross Profits, Net Profits, Net Profit Margin and Stock Price.  

In addition to the table and a graph, write a 1 or 2 paragraph summary of it's financial health. Calculate the percent changes for each variable. Also, assess whether the company appears to have a competitive advantage -- why or why not? If it does have an advantage, do you think it is sustainable?

Research paper “Dynamic Risk Management” (JFE, Rampini, Sufi, Viswanathan) showed that those US airlines that experienced financial distress in 2004-2005 chose not to hedge their commodity price risk. As financial health of US airlines improved they became active hedgers. Please explain the paper’s findings from the point of view of the agency theory (conflict between shareholders and bondholders)

Answer T or F

1. The ending merchandise inventory for 2005 is the as the beginning merchandise inventory or 2006.
2. In a multi-step income statement the dollar amount for income from operations is always the same as net income.
3. Net sales are equal to sales minus cost of merchandise sold.
4. Gross profit minus selling expenses equals net income.
5. The form on the balance sheet in which asserts, liabilities, and owner’s equity are presented in a downward sequence is called the report form.
6. On the income statement in the single-step form, the total of all expenses is deducted from the total of all revenues.
7. The single-step income statement is easier to prepare, but a criticism of this format is that gross profit and income from operations are nor readily available.
8. Income that cannot be associated definitely with operations, such as gains from the sale of a fixed asset, is listed as Other Income on the multi-step income statement.
9. Under the perpetual inventory system, when a sale is made, both the retail and cost values are recorded.
10. Under perpetual inventory system, the cost of merchandise sold is recorded when sales are made.
11. If payment is due by the end of the month in which sale is made, the invoice terms are expressed as n/30.
12. When merchandise that was sold is returned, a credit to sales returns and allowances is made.
13. In perpetual inventory system, when merchandise is returned to the seller, Cost of Merchandise Sold is one to the accounts debited to record the transaction.
14. Sales return is a contra-revenue account.
15. Sales Discounts is a revenue account with a credit balance.
16. Sales to customers who use bank credit cards, such as MasterCard and Visa, are generally treated as credit sales.

Anything in business - pathway

Locate the most recent balance sheet of a publicly-traded corporation in your pathway. You can find the balance sheet within the annual report (10-K). Answer the following questions:

1. What is the name of your company and your pathway?
2. What were the total current assets this year and last year for the company you chose?
3. What were the total current liabilities this year and last year for the company you chose?
4. Calculate the Current Ratio for this year and last year for the company you chose.
5. Analyze your company's current ratio (is it good/bad; how does it compare to the prior year, etc.)
6. Include a link to the URL for your company's annual report.

Locate the most recent balance sheet of a publicly-traded corporation in your pathway. You can find the balance sheet within the annual report (10-K). Answer the following questions:

1. What is the name of your company and your pathway?
2. What were the total current assets this year and last year for the company you chose?
3. What were the total current liabilities this year and last year for the company you chose?
4. Calculate the Current Ratio for this year and last year for the company you chose.
5. Analyze your company's current ratio (is it good/bad; how does it compare to the prior year, etc.)
6. Include a link to the URL for your company's annual report.

Prior to the financial recession in the late 2000s, some companies had built up significant cash balances. By 2010, discussions began about whether “cash hoarding” by firms was an appropriate activity or if it was hurting the economic recovery. Research this issue and answer the following questions:

• What are the advantages of having a large cash balance? Please describe and provide examples.
• What are the disadvantages of having a large cash balance? Please describe and provide examples.
• Research a publicly traded company that holds a sizable amounts of cash and liquid investments on their balance sheets. Describe the company, the balance and how that balance has varied over the past three years.

You have just been made a valuation analyst. Before you get training (what else is new!), your boss asks you to value a number of items: 1) a publicly-traded company; 2) a family business; 3) a shopping center; 4) an oil refinery; 5) a patent or trademark; and, by the way, 6) did the local tax assessor correctly value his house? How might you go about these tasks? While the course concentrates on the first two items, we will discuss, at least in passing, the remaining ones. I don't expect everyone to comment on every situation, but I am looking for a variety of comments to help establish the base from which we are proceeding.

Auditing Questions

1) What do you call the type of organization that keeps track of another company's equity-related transactions?

2) What area do we always assume that risks of fraud exist and that if we do not assume, we need to document our conclusion?

3) What statistical distribution pertains to the Test of Controls?

4) What does PPC stand for?

5) Which publicly traded companies are required to have their internal control audited?

Accounting profit includes “profits as shown on a company’s financial statements,” and it takes into consideration explicit costs, while economic profit is a broader measure of profit that includes the recognition of both explicit and implicit costs (like the cost of equity capital) (Froeb et al., 2018). A specific value to review to determine a firm's accounting profit is net income, which is referred to as “the bottom line” by accountants. A net income value can be found on a firm’s income statement. (Note that income statements for publicly traded firms within the United States can be found for free through an internet search.) A positive net income value would indicate that the firm is indeed generating accounting profit, while a negative net income value would indicate that the firm is not generating accounting profit. Economic profit is harder to measure since it also includes implicit costs, some of which can be difficult to measure since they are not necessarily easy to quantify. _____________________ 1. Select a U.S. publicly traded company. What level of net income did the firm achieve during the last year or period that you found (the value should be from the last 18 months)? Did the firm earn an accounting profit? Explain. 2. Assume the firm was unable to earn an economic profit? What does this mean for the firm you selected? 3. Explain why it is important for any firm to earn both an accounting profit and economic profit, and why any firm that only earns an accounting profit will likely not stay in business very long.