“Accounting and Ratio Analysis of Marks &amp

Spencer Company"And secondly, it enables the organization to understand which products or assets of the company are producing more revenues for the company, how efficiently these are being utilized, and which products or assets are not profitable and should be replaced or eliminated.From the reporting perspective, accounting provides the bookkeeping of day-to-day activities and every transaction that is taking place. This essential role of reporting enables the company to evaluate itself and avoid any frauds or misinterpretations.Form the decision making perspective, the decisions to evaluate the growth opportunities for the organization, for analyzing the performance of the company, for analyzing the company’s ability to pay its suppliers and shareholders, etc. a number of operational and strategic decisions like budgeting and investigating are made through accounting.Ratio Analysis is basically analyzing the relationship between different sections of the various financial statements and this analysis is based on a comparison. Ratio analysis can be of two kinds: Comparative Analysis in which the ratios are compared with the industry average ratios and Trend Analysis in which the ratios of the same company are compared on a periodic basis i.e. a year is compared with the previous year.The profitability ratios show that overall the company is in profits and will achieve more profits in the future. This is because the profit on sales is higher than the previous year and also the return that the company is getting on its assets has been increasing. Although the return on equity has been decreased which makes the shareholders resist investing in the future but the shareholders are still expected to invest because the return they are getting is still high and not very low considerably.The liquidity ratios portray that the company’s liquidity has been decreased over time and less cash on hand is present.

Power and Ethics in the American orporation

Power is very important to the managers or leaders of any organization since it is essential in the directing of its staff. However, the process of acquiring power and using it usually ruins the ethics and values held in the organization (Kelly, 1988 p.3). Discussion Power defines leadership in any company and by definition. leadership refers to the ability to direct a group of employees towards achieving the goals of an organization. Therefore, leadership has formed the basis of classifying managers into five groups or profiles, namely: leader, destructive achiever, builder, mechanic, and innovator (Kelly, 1988 p. 4). The leader refers to the ethical manager who effectively uses his charisma to lead other employees towards achieving organizational goals. The builder, on the other hand, refers to the manager who might be ethical but lacks charisma. Therefore, they are referred to as leaders with limited leadership potential. The destructive achiever is an unethical manager who, even though might have high potential, he or she will not contribute towards the achievement of the long term goals of the organization. The innovator is a very creative manager in his or her field but is not termed as a leader and is sometimes termed untrustworthy. Lastly, the mechanics refer to the persons that are competent in their profession but lack the personal impact towards settling of group issues. Therefore, they are not considered leaders or builders of the organization. From the managers listed above, it is evident that for any organization to be prosperous, it requires leaders who are ethical and have charisma which is essential in the realization of the long-term goals of the organization. Ethics is demanded by society in any given part of the world. Therefore, it has led to the classification of ethics into two groups: the ethics of integrity and ethics of social responsibility. The demand for integrity in the business came into existence following the arrival of the new millennium, which led to an increased number of accounting scandals that occurred in different parts of the world. The results were negative for example. many organizations lost their trust in the corporate world. The demand for social responsibility maintains safety to the society as well as the environment it operates (Jeurissen 2007, p. 3). According to ethics, the exercise of power must conform to the cultural standards as well as the legal standards of ethics. For instance, it has been termed unethical for any organization to use power for its own gain by engaging in illegal activities. For example, an HR assistant has the power of representing the services of the company to client companies as a process of obtaining customers. However, if he or she lies to the clients as a way of gaining more clients is an unethical behavior (Society for Human Resource Management, 2006 p.180). Many workers or employees of an organization have been in dilemma following the use of power by the seniors. Many employees have experienced tough challenges in choosing between what is good for the organization in terms of profitability and what is right according to the set ethical standards in the community. The findings of the research conducted among the graduates at Harvard revealed that young managers were being forced to make decisions, some of which were unethical by their seniors. Even though the actions were unethical, the young managers still complied because of fear of losing their jobs.

The Enron Scandal and a Look at the Accounting Practices that Permitted it to Happen

Enron’s bankruptcy marked a period of large public company failures that were all linking to financial reporting and accounting areas that included Tyco International, WorldCom, Xerox, the accounting firm of Arthur Anderson, and others (Patsuris, 2002). The reason why Enron stands above the other corporate scandals is the magnitude as well as the scope of Enron’s misconduct, and financial fallout that rocked the United States financial markets with the brazenness of running up of the stock price through deals, and reporting measures that were either non-existent or fraudulent (Longnecker, 2004). The preceding was further compounded by the company’s accounting firm, Arthur Andersen, essentially turning a blind eye to the events, and reporting measures through failing to perform its fiduciary duties in a manner consistent with good accounting, and auditing practices (Longnecker, 2004).The fallout did not just end with American based companies. The Italian food giant Parmalat became the subject of an investigation by authorities in Italy “…after discrepancies were revealed in its accounting practices to the tune of more than $5,000,000,000”, one of which represented the fact that money being held in a Cayman Island subsidiary was indeed false (Longnecker, 2004). These events led to the passage in the United States of the Sarbanes-Oxley Act of 2002 that represented the United States Congress introduction of “…a series of corporate governance initiatives into the federal securities laws …” (Romano, 2003). The Act is also known as SOX as well as the Public Company Accounting Reform and Investor Protection Act of 2002 (McCauley-Parles et al, 2007). It, the Sarbanes-Oxley Act, was enacted to restore public trust in accounting as well as corporate reporting practices after the public company scandals and “…has been described as the most sweeping and significant change in securities law since the 1930s.” (McCauley-Parles et al, 2007). The fall of Enron represented the event that pushed the creation and passage of the Sarbanes-Oxley Act, even though prior scandals of corporate reporting and misdoings had occurred.

What Is Meant by GDP and How Is It Measured

Fiscal policy is an effort by the government to stimulate the economy by adjusting and monitoring the level of spending. It refers to government purchases, transfer payments, taxes, and borrowing as they affect macroeconomic variables such as real GDP, employment, the price level, and economic growth. Using the income-expenditure model, we will focus on the demand side to consider the effect of changes in government purchases, transfer payments, and taxes on real GDP demanded. The short story is that at any given price level, an increase in government purchases or in transfer payments increases real GDP demanded, and an increase in net taxes decreases real GDP demanded, other things remain constant.4) Give short definitions of both the IS and LM curves and briefly explain how this model can help economists understand the interaction between the goods and money markets. Show how the IS and LM curves can be derived and explain how equilibrium is reached.The IS curve describes the combination of interest rates and output that clear the goods and services market in the short run. The goods and services market is said to clear when spending by consumers, firms, the government (and foreigners if an open economy) on goods and services equals the production of goods and services. The basic equation for the IS curve in a closed economy is closely related to the national income accounting identity Y = C+I+G, where Y is GDPThe LM curve summarizes all the combinations of income and interest rates that equate money demand and money supply. The LM curve in conjunction with the IS curve will help pin down the interest rate in the economy. It is well known that establishing the elasticity of the IS and LM curves provides basic information about the predicted outcome of fiscal and monetary policies in a given model, with a combination of inelastic LM and elastic IS implying fiscal crowding out and potent monetary policy, whereas elastic LM and inelastic IS lead to potent fiscal and weak monetary effects.

Operations Management of the Royal Mint

The Objective of the Royal Mint is to provide the Government with coinage at a competitive price. It is clear that Royal Mint wants to establish itself as a low-cost producer through economies of scales i.e. Mass Production at a reduced cost.Companies plan and forecast the demand according to the future needs of the market. Forecasting demand assists in decision making with respect to investment in plant and machinery, market planning, and future sales. Some of the popular forecasting methods includeIn this case, Royal Mint Estimates the demand on a Time-series basis. In the UK, the Treasury contracts with Royal Mint on an annual basis for the likely requirements for coin in 12 months. The Mint meets every three months with executives from the UK clearing banks to discuss their currency requirements in the shorter term. These estimates are then updated at weekly planning meetings and the demand is forecasted and Royal Mint follows a Just in time work schedule. Based on these estimates, the raw material is procured and the safety stock is maintained.Agile manufacturing is the ability to accomplish rapid changeover between the manufacture of different assemblies. The rapid changeover is further defined as the ability to move from the assembly of one product to the assembly of a similar product with a minimum of change in tooling and software. Rapid changeover enables the production of small lot sizes, allowing for `just-in-time production.Inventory control is a planned approach of determining what to order, when to order and how to order and how much to stock so that costs associated with buying and storing are optimal without interrupting production and sales. Safety stock is an important measure to be calculated regarding inventory. This ensures efficient purchasing, storing, consumption, and accounting for materials. This also ensures that there is no shortage of products and there is an adequate supply of products to customers.

Doing Business An Analysis of the Columbia HCA Fraud

My goal is to relate the case to the subject of Business Ethics and derive important lessons on how business should be conducted.Reading through the case study, we can discern the numerous causal factors of the federal investigation of Columbia/ HCA. From what I can understand, the investigation was brought about by a combination of internal and external factors which is presented below:It was started in June 1996 by Treasury Secretary Robert Rubin that the Medicare program will go broke by 2001 with the way funds are being spent. Expenditures were increasing exponentially with $160 billion for the 1994 fiscal year. That’s about $440 million per day. By the year 2003, it is projected that it will mushroom to $380 billion or $1 billion per day according to the Congressional Budget Office. As a general observation, any activity that increases or decreases suddenly is subject to the curiosity of other people especially when it involves large amounts of money. This being the case, it only took a matter of time before it caught the attention of government authorities who have become very keen on finding ways to eliminate unnecessary expenditures and catching fraudulent transactions.The arguments used by the managers to justify the large increase in Medicare costs were the increase in efficiency, more expensive equipment, and better accounting practices. These arguments alone are enough to stir speculations because Medicare expenditures should rise due to the rise in harder-to-treat diseases requiring more expensive medication. Does it make sense then that there was an increase in acute and chronic diseases when the health care service became more efficient? Does it mean those doctors in the past misdiagnosed patients and when Columbia/HCA came into the picture, they suddenly became experts in diagnosis?Whistleblowers are those that expose the anomalies of their employees, partners, and co-employees. Anomalous activities, in this case, refers to fraudulent acts that cheat the government (and consequently the taxpayers) of their money.

Principle of Accounting

A higher current ratio indicates that the company has enough liquidity to meet its short term obligations. However, the too-large current ratio may be negative as this would indicate that assets are not being utilized effectively. As shown from the above calculations, Company ‘C’ is performing better than the other two companies in terms of maintaining liquidity to serve its short term liabilities.The higher the debt ratio, the difficult it will be for the company to meet its long term obligation and hence to remain solvent in the long run. Although all three companies have a debt ratio of less than 1. but Company ‘B’ is performing better than the other two companies in terms of managing its long term solvency.The asset mix provides information about the percentage of each asset category in the overall asset portfolio of the company. This information assists potential investors while making the decision about whether to invest in the company.The above calculations show that 70% of assets of Company ‘C’ are current assets. whereas Company ‘B’ has 30% current assets. Company ‘A’ has equal percentages for current and non-current assets. An exact interpretation is difficult to make from these results only. This is because the assets mix depends upon other factors like the industry of business, need for keeping high inventories, or more fixed assets for long term productivity, and other factors. However, on the face of it, it can be said with certainty that C’s philosophy is to keep a higher percentage of liquid assets (maybe cash or inventory) to be able to react to market conditions relatively quickly. However, it may also mean that ‘C’ is unable to collect its receivables (current asset) as efficiently as ‘B’. which may also lead to a higher current asset mix. Regardless of the composition of current assets, Company A’s performance is midway between ‘B’ and ‘C’.An operating lease is one where the owner (lessor) of the property transfers the right to use the property to the lessee. The asset remains the property of the lessor. thus all risks remain with the lessor. Lessee just pays off the lease expenses and returns the property to the lessor at the end of the lease period. The leased property does not show on the lessee’s balance sheet. Instead, the user is shown as an operating expense in the income statement.

Auditing and Its Environment

Auditors are independent when their functioning is not affected by the vested interests of parties, other than shareholders, in the financial statements. Management is one of such parties that can directly influence the independence of auditors especially when auditors are advocating causes than auditing. Whether an auditor is actually independent when he appears to be independent is a matter that only the auditor knows. In fact, it is necessary for auditors to not only act independently but be seen to be independent. This is because independence in appearance reduces the opportunity for an auditor to act otherwise than independently. The atmosphere is so polluted that comments like ‘the concept of auditor independence should be scrapped’ are not uncommon. An all-round cleansing effort is required to save the independence of auditors, otherwise, those tarnishing the image of independence will be the worst sufferers themselves.Sarbanes-Oxley Act of 20021 in the US (followed by similar legislation in other countries) is an effort in this direction. The Act establishes a five-member Public Company Accounting Oversight Board with general oversight by SEC basically toa) oversee the audit of public companies, b) establish audit standards and rules. and c) to inspect, investigate and enforce compliance on the part of registered public accounting firms and those associated with the firm.Remunerative non-audit services are the root cause that sometimes deprives the independence of the auditor. The Panel on Audit Effectiveness2 (established by Public Oversight Board in the US) has recommended that non- audit services that exceed a threshold amount need to be approved by audit committees considering the under mentioned guidelines in respect to auditor’s independence:He has further stated “among the reason for the trend towards favoring small auditors are that the Big Four have aggressively hiked their fees.

Australian Taxation Law

The $5,000 received after the trading period qualify as income for the period ended 30 June 2010. This is in accordance with accruals accounting method. income is recognized when it is earned. All this is in accordance with and requirements of section 6-5. The trading stock for Philip’s business has to be evaluated according to the general rule of accounting for stock-S70-35(1). The difference between the opening and closing stock is added to assessable income because the closing stock exceeds opening stock-S70-35(2). The allowable deductions (division 8) include the $2,000 which was an expense from the replacement of the air conditioner-S25-10. The amount is minimized to the cost that Phillip incurred since he resold the air conditioning system which generated back income-S6-5. W Thomas co v FCT? bought a building and did not know that the building had damage when they bought it – the courts held that the ATO will treat expenditure that remedies defects, damage or deterioration to property as capital if the defect, damage or deterioration existed at the time of acquisition of the property, and did not arise from the operations of the person who incurs the expenditure. Note – the mere fact that the purchaser did not know that initial repairs were needed at the time of purchase is irrelevant. His interest accrued on a loan that was used in renovating the rental houses resulting in a generation of assessable income-S25-25(1). The $500 he used for replacing the light bulb is also a deductible income since it falls under repairs and replacement-S25-10. Fine paid by Phillip to the local does not qualify as a deduction as per the S26-5 stating that penalties are not deductible amounts. The expenses incurred in the manufacturing of the tennis racquet also, are a part of the deductible allowance as it is an expense incurred in generating an assessable income-S8-1. Under Division 30, donations are deductible allowances as long as they are voluntary and, no collateral claimed. This can be related to the charity donation. However, the gifts he presented to family and the 5 racquets he took for personal use do not qualify as deductible allowance-S26-54. Paper 2 Joan’s total taxable income Joan’s income $ $ Salary 375,000 Home ware magazine 24,000 13,500 537,500 Agreement 230,000 Payment for damages through accident 360,000 590,000 Total assessable income 1,127,500 Allowable deductions $ $ Pain and suffering 10,000 University Union fees 650 Textbooks 750 Photocopying and writing aid 350 Travel 450 2,200 Total allowable deductions 12,200 Joan’s total taxable income Assessable income 1,127,500 Allowable deductions 12,200 Total taxable income 1,115,300 Joan’s total taxable income amounts to $1,000,300.

Finance and Accounting Sparkle Plc

The annual report not only contains the financial statements such as income statement, balance sheet, or cash flow statements but also other reports such as director’s report, auditor’s report, corporate social responsibility information, etc. In short, the annual report contains company’s business functions, products or services, sources of finances and resources, human resource involvement, countries of operation, responsibilities and contribution towards society, performance in terms of revenue generation, financial and accounting standards that it follows, and future goals or objectives structured for the next year (Thomsett, 2007, p. 5).This report is Sparkle Plc., a company which deals with cleaning products. Sparkle Plc. want to prepare their annual reports to attract more investors and also present a transparent image to their existing shareholders. The board of directors of the company already has the idea that the annual report would include the financial statements of the company. However, as discussed it is not only the financial statements that are important because many investors do not and cannot assess the financial health of the company only through revenue figures. So this report would include a detailed analysis as to what information should be included to make the annual report of Sparkle Plc. complete and appropriate to the shareholders and potential investors