Question: Discuss what is meant by fundamental analysis

> Outline the importance of strategic planning.

> For the budgets you identified in 9.8 above, discuss the type of information provided in each budget and who in the entity would provide such information.

> State the different types of budgets that may be prepared to construct the master budget.

> Explain why the sales budget is often referred to as the ‘cornerstone’ of budgeting.

> Outline six ways to increase cash inflow during periods of cash shortages identified in a cash budget.

> Explain why it is important to link operational budgets to strategic plans.

> Explain the difference between profit or loss, gross profit and EBIT.

> Discuss the benefits to an entity in preparing a budget for the coming financial year.

> Explain the benefits of preparing a cash budget for an entity.

> Differentiate between authoritarian and participative styles of budgeting.

> What does a favourable variance indicate?

> Explain the main steps in the budgeting process.

> What is a chart of accounts and what is its role in the budgeting process?

> Discuss the differences in the type of budgets applicable for a manufacturer compared to a service provider.

> Earnings before interest and tax (EBIT), rather than profit, is sometimes used as the numerator in the ROA. Discuss the rationale for using EBIT rather than profit.

> The working capital ratio for Butler Business has progressively increased from 1.2 times to 3.0 over the past three years. Discuss whether this trend is favourable.

> Identify what ratios a bank lender would be particularly interested in.

> Explain the difference between income and revenue.

> When calculating the return on asset ratio, the average asset balance is used as the denominator. When calculating the debt ratio, the year-end asset balance is used as the denominator. Explain the rationale for using average asset figures for some ratio

> Read the following extract (Cavanagh, Saunders & Pritchard 2015) about how New South Wales winemakers have maintained their profitability. Maintaining premium wine prices and reacting to trends similar to the latest ‘handbag’ are some of the ways the win

> Standard & Poor’s (S&P) (2018), one of the leading credit rating organisations and a publisher of financial information and research services, identifies its debt rating process as follows. S&P undertakes quantitative and qu

> Your friend has $5000 to invest in the stockmarket and is deciding between an investment in Bamboo Ltd or Panda Ltd. In the most recent reporting period, Panda Ltd made a profit after tax of $1 500 000, compared to Bamboo Ltd’s after-tax profit of $750 0

> Debt collection companies Credit Corp Group and Collection House have reported uplifts in revenue and profits for 2015 suggesting that the debt collection market is flourishing. Speaking about Credit Corp Group’s results, chief executive officer Thomas

> Qantas Airways integrates a sustainability report with its annual review. Locate the most recent sustainability report to address the following questions. The reports can be located at www.qantas.com.au. (Select ‘Investor Centre’, then ‘Annual Reports’ a

> The following financial ratios and information relate to Starbucks Corporation for the period 2008 to 2017. Required (a) Represent the 2017 horizontal analysis of the asset section of the statement of financial position in a pie chart and comment on Sta

> The following financial statements were prepared for the management of Back2Basics Ltd. The statements contain some information that will be disclosed in note form in the general purpose financial statements (GPFS) to be issued. BACK2BASICS LTD Statement

> Lincoln Indicators professes nine golden rules for successful sharemarket investing. The golden rules relate to financial health, management assessment, outlook/forecast, share price value, share price sentiment, liquidity and size, principal activities

> The following table provides a historical summary of key financial ratios for Homer Corporation. Required (a) With reference to the appropriate ratios, analyse the trend in Homer Corporation’s profitability, providing plausible reasons

> If an entity uses an asset evenly over its useful life, predict the method of depreciation the entity would use.

> The treasurer of Reality Ltd has recently developed a computer model to help in the prediction of profits, statement of financial position and cash flows. By entering the expected sales figure and the value of various other parameters, the model will pri

> The following values relate to various ratios for an outdoor adventure clothing store for the most recent year. At the end of the year, total assets as per the statement of financial position were $900 000. The ratios relate to the accounts either in res

> Visit the Yahoo! Finance website (http://au.finance.yahoo.com) and call up information on JB Hi-Fi Ltd (symbol: JBH.AX). (a) Identify JB Hi-Fi Ltd’s current share price (day 1), the previous day’s share price (day 0) and the share price return from day 0

> Read the following quote and discuss what you think Fridson and Fernando (2002) mean by ‘passively calculating standard ratios’. Corporations have substantial incentives to exploit the fact that accounting principles are neither fixed for all time nor so

> Users are interested in an entity’s future profitability, asset efficiency, liquidity and capital structure. Describe the ratios that would be of interest to users and the purpose of computing these ratios.

> Summary information from the 2021 statement of profit or loss of Coconut Plantations Pty Ltd is provided below. Sales revenue ………………&a

> The statement of profit or loss figures for the past five years for Victorian Manor are presented below. Using the information: (a) Prepare a trend analysis and comment on the trends (b) Prepare a vertical analysis (using revenue as the base amount) and

> Fit and Fantastic Ltd produces and sells a range of fitness equipment. Its capital expenditure for the current year for new plant was $600 000 and dividends paid were $80 000. Current liabilities and non-current liabilities were $112 000 and $1 400 000 r

> You have been given the following information regarding an entity. One of your friends is interested in investing in it. Help your friend by calculating some cash-based ratios, explaining what the ratios are measuring. Cash from operating activities …………

> It is important for businesses to have efficient processes and systems in place for collecting monies from debtors. The business and industry portal of the Queensland government (www.business.qld.gov.au/business) contains advice for offering credit and m

> Items of income and expenses may be included in the statement of profit or loss only if they can be measured with certainty. Discuss.

> The market performance ratios for Unicycle Ltd are presented next. Calculate the entity’s dividend payout ratio, interpret the ratio and explain why an investor would be interested in this ratio. Comment on Unicycle Ltdâ€&#15

> The following table reports various financial ratios for Qantas and Virgin for 2018. (a) Given that the companies operate in the same industry, write a report explaining what the ratios suggest about the companies’ operating, financing

> An entity has $660 000 of assets, including current assets of $180 000. The following information has also been ascertained about the entity. • The two owners have contributed $150 000 each. • The entity has always distributed all the profits via a famil

> Selected information for two companies competing in the catering industry is presented below. Required (a) Analyse and compare the liquidity, solvency and profitability ratios of the entities. (b) From your calculations in part (a), explain which entity

> The statement of financial position and the statement of profit or loss for Protocol are presented below. (a) Calculate the: (i) Current ratio (ii) Return on assets (use year-end figures) (iii) Return on shareholders’ funds (owner&acirc

> Grammar Ltd reports the following information. From this information, calculate and interpret the following ratios (year-end figures have to be used because the comparative year figures are not available) and prepare a report on the financial position a

> Coconut Plantations Pty Ltd’s financial records reveal the following as at 30 June 2021. Net sales (all credit) …………………………………………….. $1 675 000 Cost of sales ………………………………………………………….. 1 025 000 Accounts receivable — beginning …………………………………. 93 010 Accounts

> The statement of financial position for Ambre Ltd is presented below. Perform a horizontal analysis of the change (in absolute and percentage terms) between the year-end figures. Identify any significant variations that warrant further investigation and

> If days inventory for Fab40 retail outlet was 35 days and days creditors was 12 days, calculate what the cash cycle would be if credit sales for a year amounted to $88 000 and the average trade debtors balance at the end of the year was $33 000.

> Describe the items that are likely to be present in a statement of changes in equity.

> Examine what happens to the debt ratio when: (a) Short-term debt is converted into an equivalent amount of long-term debt (b) A major asset is sold, with part of the proceeds being used to repay debt (c) Cash is used for a share buy-back.

> Examine what happens to the gross profit margin when: (a) Advertising is incurred (b) Selling prices are increased, assuming customers buy the same amount (c) All suppliers increase their prices.

> Examine what happens to the current ratio when: (a) An account payable is paid with cash (b) Inventory is purchased on credit (c) Money is received from a debtor.

> Savannah Ltd had $84 000 of profit and incurred $16 500 in net finance costs during the recently completed period. Savannah’s liabilities and owner’s equity total $925 000. Assuming a 30 per cent tax rate, calculate the return on assets.

> During 2021, Barb Ryan, the sole shareholder in Sunshine Farms Pty Ltd, decides to invest in automotive manufacturing equipment to reduce direct labour costs. She decides to fund the investment of $140 000 from retained profits. Financial data (assume av

> The most recent annual statement of profit or loss for High Tower Enterprises is presented below. Prepare a vertical analysis of the statement. HIGH TOWER ENTERPRISES Statement of profit or loss Income …………………………………………………………… $324 000 Expenses Cost of sa

> The following table shows the returns and valuations of selected listed retailers as at June 2018. Required (a) Explain what is meant by ‘P/E (times)’. (b) Calculate the expected growth in EPS between 2018 and 2019 fo

> The following is a summary of key reported figures for Woolworths Ltd’s business segments for 2018 and 2017. Report on the profitability of the business segments. Australian food New Zealand food Endeavour drinks Big W Operating seg

> There are a variety of tools available to assist business owners to better understand the performance and position of their business. One such tool, provided by the ATO, allows a financial ratio comparison of an entity with that of its industry. Access t

> In its 2018 annual report, JB Hi-Fi Ltd provides the gross margin for each of its divisions. Discuss what factors impact on the variation of these margins across the three divisions.

> Discuss the importance of showing profit or loss from continued operations separately from the profit or loss from discontinued operations.

> Nicholas Cash, the sole proprietor of Advantage Tennis Coaching (ATC), has met with his accountant to discuss preparation of ATC’s financial statements for the year ended 31 December 2020. The following issues were discussed. 1. St Lucia Tennis Club owes

> The Rathburn Manufacturing Company makes electric wiring, which it sells to contractors in the construction industry. Approximately 900 electric contractors purchase wire from Rathburn annually. Rathburn’s director of marketing wants to determine electri

> Classify each of the following as nominal, ordinal, interval, or ratio data. a. The ranking of a company in the Fortune 500 b. The number of tickets sold at a movie theater on any given night c. The identification number on a questionnaire d. Per capita

> Classify each of the following as nominal, ordinal, interval, or ratio data. a. The time required to produce each tire on an assembly line b. The number of quarts of milk a family drinks in a month c. The ranking of four machines in your plant after they

> Southwest Airlines One night over dinner early in 1967 in San Antonio, Rollin King presented his idea for a new airline to Herb Kelleher by drawing a triangle on a napkin and labeling the three corners as Dallas, Houston, and San Antonio. King’s idea was

> The owner of a fast-food restaurant ascertains the ages of a sample of customers. From these data, the owner constructs the frequency distribution shown. For each class interval of the frequency distribution, determine the class midpoint, the relative fr

> A packaging process is supposed to fill small boxes of raisins with approximately 50 raisins so that each box will weigh the same. However, the number of raisins in each box will vary. Suppose 100 boxes of raisins are randomly sampled, the raisins counte

> The following data represent the afternoon high temperatures for 50 construction days during a year in St. Louis. a) Construct a frequency distribution for the data using 5 class intervals. b) Construct a frequency distribution for the data using 10 cla

> The following data represent the number of passengers per flight in a sample of 50 flights from Wichita, Kansas, to Kansas City, Missouri. a) Construct a dot plot for these data. b) Construct a stem-and-leaf plot for these data. What does the stem-and-

> A real estate group is investigating the price of condominiums of a given size (sq ft). The following sales prices ($1,000) were obtained in one region of a city. Construct a stem-and-leaf plot for the following data using two digits for the stem. Commen

> Construct an ogive for the following data. Class Interval _______________ Frequency 3–under 6 ………………….………….. 2 6–under 9 ………………….………….. 5 9–under 12 ………………………….. 10 12–under 15 ………………………….. 11 15–under 18 ………………………….. 17 18–under 21 …………………………... 5

> Suppose you are the owner of a medium-sized restaurant in a small city. What are some variables associated with different aspects of the business that might be helpful to you in making business decisions about the restaurant? Name four of these variables

> A call center is trying to better understand staffing requirements. It records the number of calls received during the evening shift for 78 evenings and obtains the information given below. Construct a histogram of the data and comment on the key charact

> Assembly times for components must be understood in order to “level” the stages of a production process. Construct both a histogram and a frequency polygon for the following assembly time data and comment on the key characteristics of the distribution.

> List three specific uses of cumulative frequencies in business?

> The human resources manager for a large company commissions a study in which the employment records of 500 company employees are examined for absenteeism during the past year. The business analyst conducting the study organizes the data into a frequency

> Shown here is a scatter plot of the NASDAQ 100 Index versus the Dow Jones Industrial Average on Friday closings over a period of one year (January 12, 2018 to January 4, 2019). What does the graph tell you about the relationship of the NASDAQ 100 Index t

> Suppose 100 CPA firms are surveyed to determine how many audits they perform over a certain time. The data are summarized using the Minitab stem-and-leaf plot shown here. What can you learn from this plot about the number of audits being performed by the

> Shown here is a Minitab-produced pie chart representing physician specialties. What does the chart tell you about the various specialties? Emergency Medicine 9.8% Anesthesiology 10.2% OB-GYN 10.2% Physician Specialties Pediatrics. 14.2% Internal Medi

> Study the following dot plot and comment on the general shape of the distribution. Discuss any gaps or heavy concentrations in the data. င်းငွေ ၁ ပဗ္ဗ d 9 18 ဝိဝိ 27 ထဝ 88 d 36 45 54

> Suppose 150 shoppers at an upscale mall are interviewed and one of the questions asked is household income. Study the Minitab histogram of the following data and discuss what can be learned about the shoppers. Frequency 30 20 10 50,000 100,000 Househ

> A research organization selected 50 U.S. towns from the 2010 census with populations between 4000 and 6000 as a sample to represent small towns for survey purposes. The populations of these towns follow. Construct a stem-and-leaf plot for the data, lett

> There are many types of information that might help the manager of a large department store run the business more efficiently and better understand how to improve sales. Think about this in such areas as sales, customers, human resources, inventory, supp

> A manufacturing company produces plastic bottles for the dairy industry. Some of the bottles are rejected because of poor quality. Causes of poor-quality bottles include faulty plastic, incorrect labeling, discoloration, incorrect thickness, broken handl

> Shown here is a list of the industries with the largest total toxic releases in a recent year according to the EPA. Construct both a bar chart and a pie chart to depict this information and comment on the advantages of each type of chart in depicting the

> The following figures for U.S. imports of agricultural products and manufactured goods were taken from selected years over a 30-year period (in $ billions). The source of the data is the U.S. International Trade Administration. Construct a scatter plot f

> Shown here are production unit data for a company for the first four months of the year over eight years. Construct a chart or graph that best depicts these four months of data over the eight years together in one graph. What do you visualize is happenin

> Shown here are the top seven companies from the construction, farm machinery industry in the United States and their respective revenue ($ billions). Company ____________ Revenue Caterpillar ………………………… 38.5 Deere ………………………………. 26.6 Paccar ……………………………… 17

> A consumer group surveyed food prices at 87 stores on the East Coast. Among the food prices being measured was that of sugar. From the data collected, the group constructed the frequency distribution of the prices of 4 pounds of Domino’s sugar in the sto

> Good, relatively inexpensive prenatal care often can prevent a lifetime of expense owing to complications resulting from a baby’s low birth weight. A survey of a random sample of 57 new mothers asked them to estimate how much they spent on prenatal care.

> Shipping a 40-foot container by boat from Shanghai to Chicago via the port of Los Angeles takes, on average, 16 days. However, due to several possible mitigating circumstances, shipping times can vary. Suppose a transportation analyst randomly selects 20

> In a medium-sized southern city, 86 houses are for sale, each having about 2000 square feet of floor space. The asking prices vary. The frequency distribution shown contains the price categories for the 86 houses. Construct a histogram, a frequency polyg

> The following data are shaped roughly like a normal distribution (discussed in Chapter 6). Construct a frequency distribution starting with 10 as the lowest class beginning point and use a class width of 10. Construct a histogram and a frequency polygon

> Suppose you are an operations manager for a plant that manufactures batteries. Give an example of how you could use descriptive statistics to make better managerial decisions. Give an example of how you could use inferential statistics to make better man

> Suppose 1000 commuters in New York City submit their typical daily commute time to a transportation research company which then organizes the data into the histogram shown below. Study the histogram and comment on information gleaned from the graph. Desc

> A northwestern distribution company surveyed 53 of its midlevel managers. The survey obtained the ages of these managers, which later were organized into the frequency distribution shown. Determine the class midpoint, relative frequency, and cumulative f

> The Whitcomb Company manufactures a metal ring for industrial engines that usually weighs about 50 ounces. A random sample of 50 of these metal rings produced the following weights (in ounces). a) Construct a dot plot for these data and comment on any o

> Visualize the following time-series data. Year __________ Number of Employees 1 …………………………………….. 56 2 …………………………………….. 53 3 …………………………………….. 47 4 …………………………………….. 41 5 …………………………………….. 43 6 …………………………………….. 46 7 …………………………………….. 52 8 …………………………………….. 63

> Construct a scatter plot for the following two numerical variables? x _____________ y 12 ……………………… 5 17 ……………………… 3 9 ………….………….. 10 6 ………….………….. 15 10 …………………….. 8 14 ………………….….. 9 8 ….……….………….. 8