Essays on Book Value

Business

a) Define the term due diligence. How is it applied to the acquisition of new venture? According to the class textbook, due diligence is defined as a thorough analysis of every facet of an existing business. Due diligence is applied in the acquisition of the new venture in many ways. First, it is through the use of the due diligence that an entrepreneur will be able to evaluate the viability of the venture to be bought on various feasibility scales. Through due diligence, an entrepreneur is able to understand the current business situation and if there is any need ...

Wells Fargo is a $222 billion bank with diversified financial services that provides consumer finance services, mortgage, insurance, banking and investment services. It is the leading internet bank and has over 5300 stores globally (Han-Yuh 2007). Wells Fargo is a publicly traded corporation and was founded back in 1852 (DeYoung & Rice 2004). Based on the recently released Forbes report, Wells Fargo was ranked at position 26 in the world based on market value, assets, sales and profits. It is vital to note that this company prides in operating as the first national bank charter in the US and recently ...

This paper presents profitability analysis of two companies listed and active in the London Stock Exchange. The two companies selected for the analysis include Premier Oil PLC trading under the ticker symbol PMO and Genel Energy PLC falling under the ticker symbol GENL in the exchange. The two companies fall under the Oil and Gas Producer main market segment of the London Stock Exchange. At the time of presenting this report, GENL traded at a price of 97.50p with a 52-week range of 71.75p to 441.00p. On the other hand, the MPS of Premier Oil PLC was at 63.50p ...

Abstract

Performing the comprehensive analysis of the financial situation of AMC Entertainments, we have gained an optimistic review for the entity. Strong profitability driven by revenue growth and controlled cost structure will enlarge the podium of success for the company. On the other hand, high amount of operating cash flow growth, and a prudent spending on capital assets and dividend payment, indicates a sustainable approach of the company for maintaining balance throughout. Similarly, a sustainable proportion of debt-equity is apt according to the recent financial strength of the company and do not spark any source of concern. However, two issues ...

About the case:

Rodney Chu, the managing director of Sierra Capital Partners is interested in purchasing 60% equity interest in Arcadian Microarray Technologies, a biotechnology firm founded in the year 2003. At present, Sierra Capital Partners have offered $40 million to Arcadian for selling their equity interest. This amount will be used for expansion of the firm. While Arcadian management have forecasted an optimistic projection for their firm’s performance over the period of 11 years, however, Sierra’s projections reveal a conservative outlook. Therefore, Mr. Chu is interested in ascertaining the terminal value and discounting the cash flows and the terminal ...

Performance Measurement

Asset Utilization Revenue generation by each employee is perceived to be better for Boeing at $595,501.86, which may be due to a better employee retention policy. This was concurred by Boeing’s annual report where it revealed that the management has good relations with its employees since 38% are represented by unions (Boeing, 2016, p.20) with Lockheed at 18% (Lockheed, 2016, p.18). Due to the better employee retention, Boeing was able to generate a higher amount of sales based on its investor’s capital or equity at 15.02 but Lockheed was not lagging far behind at 14.90. The ...

Walmart is a multinational store that was founded on the idea of selling inventory at a low price (selling more for less). This selling concept has propelled the retailer to be among the largest across the globe. The firm enjoys a presence in over twenty-eight countries. Its network is made up of eleven thousand five hundred stores and eleven e-commerce sites (Walmart, 1). The adoption of e-commerce has enabled it to tap the growing demand for internet shopping. In the recent financial year, the firm revenue was $482.1 billion. The continuous growth and increasing economic value of the retail ...

Cash is different from profits, but it is blood of the business. It is necessary to maintain cash as one can run business without profits but not without cash. Profits do not indicate the cash. It is key for any business to have cash by selling the products and services. In relation to depreciation, straight line method is used for the buildings and even for the equipment. However, government frequently changes the formula of depreciation as one of the formulae is 2x. Another formula is known as one and one-half times the declining balance. The businesses can use either ...

H1 This hypothesis should test if IFRS adoption improves accounting quality in R&D firms. However, many research studies that have been conducted established that lower predictability and persistence in earnings. There is also a decrease in earnings influence to stakeholder value, weak volatilities in prices charged by markets, better predictability of cash flow of a company as well as financial predictions. Also, there is a rise in accruals together with timeliness loss of recognition as well as a reduction in expenditure on research and development. According to Ahmed, Neel, and Wang (2012), their study established that increase in income ...

**Business 4465**

Be sure to put your name and student number at the top of the email attachment. Your document must be less than 10 typed pages. Please read the questions carefully. Write all you answers in a word document, label all questions carefully. The best answers are those that answer the questions well and concisely using material within the scope of the course and not irrelevant material from other sources or from the internet. Answers that are beyond the scope of the course will receive no marks. Answers that are not written in the own words of a ...

Question 1: What is Cineplex’s Altman Z-Score for 2013 and 2014?

Z = 1.2X1 + 1.4X2 + 3.3X3 + 0.6X4 + 1.0X5

Where:

X1 = Net Working Capital/Total Assets (it measures liquidity) X2 = Retained Earnings/Total Assets (it measures the cumulative profitability) X3 = Earnings before Interest and Tax/Total Assets (it measures the return on assets) X4 = Equity Market Value/Book Value of Liabilities (it measures the market leverage) X5 = Total Revenue/Assets (It measures the revenue generating potential of total assets) X1 = Net Working Capital/Total Assets = -184,021/1,609,416 = -0.11 X2 = Retained Earnings/Total Assets = -123,771 / 1,609,416 = -0.08 X3 = Earnings before Interest and Tax/Total Assets = (97,415 + 21,948) / 1,609,416 = 0.07 X4 = Equity ...

Introduction

The accounting for valuation and impairment of goodwill has received important recognition in popular areas. However, due to the economic crisis in the United States and the ongoing steps towards the convergence with the IFRS, a focus on the potential valuation of goodwill has become to the forefront. This project will examine the accounting issues of valuation of goodwill for the major areas of concern for the corporate financial position such as economic, social, and legal or political issues under each accounting body (FASB and IASB).

Government patronage/ support The products of a company will experience high demand especially ...