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...

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...