Liabilities

The liabilities are what a company owes, divided into current and long-term liabilities. 3.3.1.3.1 Current Liabilities. Current liabilities are debts that must be paid within a year from the date of the balance sheet. They are paid from the current assets. Current liabilities include accounts payable, notes payable, accrued expenses payable, and income taxes payable. Accounts payable are such items as invoices for raw materials and supplies that a company has purchased from suppliers for which...

Intangible Factors

The results of a study of intangible investment criteria was conducted by Perry, Scott, and Bird 16 , based upon responses from selected companies in the Fortune 500 list. The factors most often listed by the management executives will be discussed in this section. 9.4.2.1.1 Employee Morale. This factor is directly related to efficiency of operation. If an employee does not consider that working conditions are favorable, this will surely affect not only the amount of material produced but also...

Fixed Operating Expenses

These expenses include depreciation and plant indirect expenses such as property taxes, insurance, fire protection. All these items are expressed as a fraction of the equipment cost or the fixed capital investment. The fixed capital investment represents the total money spent to purchase equipment and place it in operation. It is customary to include the return on investment on an after-tax basis using the federal rate but occasionally state and local taxes may also be included in the...

Independent Accountants Certification

When reading an annual report, one should look at the independent accountant's statement (Table 3.13). The certificate will state that the auditing steps used in the verification of the figures meet the accounting world's approved standards of practice, and that the financial statements contained in the annual report were prepared in conformance with generally accepted accounting practices 5 . The two statements assure the reader that the figures in the annual report fairly represent the data...

Financing the Corporate Venture

Prior to World War I, most companies were small in comparison to companies today. They were often owned and operated by the founders 1 . The capital expenditures were for replacement of obsolete or worn-out equipment, or perhaps for modest plant expansions. The funds for these expenditures were, for the most part, obtained from company earnings. Between World War I and II, industrial growth took place with plant acquisitions or mergers with other firms. Since these were often major...

Economic Value Added

In the mid-1990s, a management concept, economic value added (EVA), was moved from a buzzword to an important financial tool. EVA is the after-tax net operating profit minus the cost of capital. It measures whether a business earns more than the cost of capital. EVA is being used as a performance measure, as an analytical financial tool, and as a management discipline measure. Various economic sectors like manufacturing industries, health-care companies, and the postal service are among the...

Drying Of Solids

Drying times range from a few seconds in spray dryers to 1 hr or less in rotary dryers and up to several hours or even several days in tunnel shelf or belt dryers. 2. Continuous tray and belt dryers for granular material of natural size or pelleted to 3-15 mm have drying times in the range of 10-200min. 3. Rotary cylindrical dryers operate with superficial air velocities of 5-10 ft sec, sometimes up to 35 ft sec when the material is coarse. Residence times are 5-90min. Holdup of solid is 7-8 ....

Accumulated Retained Earnings

Accumulated retained earnings is an important part of the financial report because it shows how much money the company has retained for growth and how much is paid out as dividends to stockholders. When the accumulated retained earnings increase, the company has more value 5 . To obtain the value of the retained earnings, the company starts at the beginning of the year with the previous year's balance. To that figure the net profit after taxes for the year is added. The dividends paid to the...

The 10K Report

Every year, every public corporation in the United States is required to file a report, known as the 10K report, with the Securities and Exchange Commission. When one requests a copy of a company's annual report, the 10K report frequently accompanies or is bound with it. The 10K report is a more thorough presentation and discussion of the details found in the annual report. Over the past decade, the format of the 10K report has been modified to eliminate redundancy and repetition of data in the...

Info

The fixed capital investment may be rounded to 10,500,000. The estimates of the fixed capital investment by the various methods are The costs obtained by the Hand, Brown, and Chilton methods produce similar results and this might be expected as the methods are somewhat similar in nature. If the errors in each method are considered, the estimates of the fixed capital investment are close. The Lang method gives a result very similar to the one from Apex Contractor, but the errors in the Lang...

Effect Of The Time Value Of Money On The Cash Position Plot

Thus far, the time value of money has not been considered in Example 8.3. To be realistic, it must be included in the calculations, therefore, let's determine how the effect of interest changes the cash position plot in Example 8.3. Reread Example 8.3. The firm uses 20 continuous interest for its present worth calculations. Discrete end-of-year or midyear convention may be used instead of continuous interest. The methodology is the same regardless of the interest model used. Prepare a...

Financial Statements

Some basic knowledge of accounting and financial statements is necessary for a chemical professional to be able to analyze a firm's operations, discover whether the firm is making a profit and whether a company will continue to make a profit. It is also essential to know how a firm's operation is reported to determine its role in a particular industry or in the national economy. Financial reports of a company are important sources of data used by management, owners, creditors, investment...

Changes in Financial Position

If one inspects the balance sheet and the income statement, it is easy to see how much money passed through the company. How much profit was made Did the working capital change and, if so, where did it go (Working capital is the difference between the total current assets and the total current liabilities.) How were funds obtained from various sources like net profit, depreciation, and the sale of common stock used How did cash generated affect the company operations By careful tracking of...

Business Plans

The planning function is essential for the growth of a successful, vigorous company. Two of the most important areas of management responsibilities are capital budgeting and planning. Committees within the firm are formed to plan for the future and prepare capital budgets. A business plan must be developed before any funds are sought for a new product or venture. The capital budgeting function may be divided into several categories depending upon the time frame involved 1,2 . Strategic planning...

Sensitivity Analysis

Sensitivity analysis is concerned with the extent of change in a cost analysis resulting from variations in one or more elements of a cost study. It shows the influence of possible changes of significant variables upon profitability. From this analysis, those variables that have a critical effect are identified. Especially important are those variables that might alter a decision when only small changes occur. The ordinary practice is to make a number of computations of profitability, varying...