... businesses, or thinking of doing so.
ã Business people in nonfinancial positions who want to be better versed in
financial matters.
ã BBA or MBA alumni who want a refresher infinanceand accounting.
26 ... amount of income available for paying interest is simply earnings be-
fore interest and before income taxes. (Business interest expense is deductible
for income tax purposes; therefore, income taxes ... provid-
ing free roadside assistance and loaner cars when customer cars are
being serviced.
2. Maintaining prices but reducing the quantity of product in the pack-
age. Candy bar manufacturers and...
... (1999)
Aircraft engines, automotive Avco Financial
parts, and finance
Services
Watts Industries Inc. (1999)
Valves for plumbing, heating
Industrial oil and gas
and water quality industries
businesses
SOURCES
: ... separate line items within the listing of
revenues or gain and expense or loss, or are included in an “other income (ex-
pense)” line. A sampling of nonrecurring items found in the other-income -and-
expense ... listed in Exhibit 2.13 represent changes in accounting
estimates as opposed to accounting principles. Changes in depreciation method
are changes inaccounting principle, whereas changes in depreciable...
... “rise-over-run” using the y-axis intercept and that point. For this calculation my
line intersected the June data at point ($13,500, $15,500) so my rise was $11,500
($4,000 to $15,500 in Total Cost) and my ... buying books in large quantity from publishers, warehousing
them, and selling in smaller quantities to bookstores. Of course, the last piece
is the bookstore, where in- store promotion and the final ... cases of dumping have involved the textile and
steel industries. Another recent case of dumping concerned Japanese auto
companies accused by U.S. competitors of dumping minivans in this country.
Also,...
... Web-based marketing and selling, rather than
transaction processes and the hiring and training of people involved in these
processes. In addition, the avoidance of investment in this type of infrastruc-
ture ... fulfillment, tracking, and customer-information stor-
age and mining. All these systems must talk to one another, which means that
interfaces must be maintained. This interfacing is a nightmare ... investors see the value in your using their investment dol-
lars and your creative energy to build transaction-processing systems that are
suboptimal in scale and soon obsolete? In you spending...
... cost as little as $100. In higher-priced inkjet printers, print quality is
excellent in black -and- white and color. Today many people are using high-end
inkjet printers to print pictures taken with ... Understanding the Numbers
Internet Multimedia
The Internet provides an amazing plethora of information, and not just in text
or still-picture format. Video and audio streaming media is becoming increas-
ingly ... American Accounting
/Accounting/ raw/aaa Association
Financial Management Site
www.fma.org Homepage of the Financial Management
Association International, with lots of useful
information and many links...
... incurred in the manufacturing process. Beginning and end-
ing inventories consist of raw materials, work -in- process, and finished goods.
Administrative Expense Budget (7–10)
The expected administrative ... in the bud-
geted income statement is budgeted after-tax net income.
Nonoperating items in C&G’s income statement include interest income
and interest expense. Amounts borrowed carry an interest ... on budgeting from a business
perspective, many of the principles are also applicable to individuals in the
planning of their personal finances.
192 Understanding the Numbers
extend linearly with...
... family
law, and so on, right down to individual lawyers in the firm. And knowing what
has happened in the past, they have an excellent tool for beginning to plan for
the future. I think we should be doing ... questions and answers on this and many other accounting
topics. The Institute of Management Accountants maintains a site at www
.imanet.org that provides all kinds of managerial accounting resources. ... cost into a quasi-variable cost by finding and using the appropriate
cost driver.
“Controlling fixed costs is also a matter of scale. Consider the machine
again. Assume one has just one machine...
... (preferably in writing) setting forth their understandings on the many
issues which will arise in such an arrangement. Principal among these are the
investments each will make in the business, the ... filing an application with the state government and paying the
234 Planning and Forecasting
time to cash in on their efforts as founders and promoters. The survival of the
business as a whole in ... are publicly traded) and will rarely be sig-
nificant to a small business such as those described at the beginning of this
PART TWO
PLANNING AND
FORECASTING
Choosing a Business Form 235
of existence...
... writing any business plan is getting started. Com-
piling the data, shaping it into an articulate story, and producing the finished
product can be a daunting task. The best way to attack a business ... manipulated in tables and graphs.
RDS Bizsuite Linked databases providing data and full-text searching on firms.
Bloomberg Detailed financial data and analyst reports.
276 Planning and Forecasting
three ... Many new com-
panies were born and rode the wave of the emerging technology, including
Apple, Microsoft, and Intel. In the nineties, it was anything dealing with the
Internet. As we enter the twenty-first...
... factoring in points and origination fees and assuming the
mortgage will not be prepaid.
RECENT INNOVATIONS IN CAPITAL BUDGETING
Recent years have seen the introduction of two new capital budgeting ... rate.
Borrowing from a bank or selling bonds to raise funds is known as “debt
financing.” Issuing stock to raise funds is known as “equity financing.” Equity
financing is an alternative to debt financing, ... volatile: 48% in good times and 0% in bad times. This is the third
EXHIBIT 10.6 Performance of NoDebt Inc. and SomeDebt Inc.
NoDebt Inc. (thousands)
SomeDebt Inc. (thousands)
Net Earnings Good Times...
... by
classifying taxable income and loss in three major categories: active, portfolio,
and passive. Active income consists mainly of wages, salaries, and bonuses;
portfolio income is mainly interest and ... 80 of the 100 out-
standing shares and Lisa and Brad each own 10, a corporate redemption agree-
ment leaves Lisa and Brad each owning half of the 20 outstanding shares
remaining. If, however, Morris ... option and again upon exercise.
Upon sale of the underlying stock, the employee includes in taxable income the
difference between the price received and the total paid for the stock and op-
tion and...