...mmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmdddddddddddddddddddddddddddddddddddddddddd.ddddddddddddddddddddddgfyufyddrasdgfghkjlkhytewasdghjhjkjkjkjnkhjbjhvhgcgxcgvhbnkmmnbvhvghhcfgxdcbn.sdcgvjnjknbvhgccgj.dxsdvgghbjb.gftsrsrtsdgihufdtrstygukjnhjkk.drdcggk.upply of money is economic constant, government expenditures must be financed by either taxes or borrowing. Fiscal policy involves the use of the government’s spending, taxing and borrowing policies. The government’s budget deficit is used to evaluate the direction of fiscal policy. When the government increases its spending and/or reduces taxes, this will shift the government budget toward a deficit. If the government runs a deficit, it will have to borrow...
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...Supplemental Unit 5: Fiscal Policy and Budget Deficits Fiscal and monetary policies are the two major tools available to policy makers to alter total demand, output, and employment. This feature will focus on fiscal policy, what it is and its potential and limitations as a tool with which to promote economic stability and strong growth. What is Fiscal Policy? When the supply of money is economic constant, government expenditures must be financed by either taxes or borrowing. Fiscal policy involves the use of the government’s spending, taxing and borrowing policies. The government’s budget deficit is used to evaluate the direction of fiscal policy. When the government increases its spending and/or reduces taxes, this will shift the government budget toward a deficit. If the government runs a deficit, it will have to borrow funds to cover the excess of its spending relative to revenue. Larger budget deficits and increased borrowing are indicative of expansionary fiscal policy. In contrast, if the government reduces its spending and/or increases taxes, this would shift the budget toward a surplus. The budget surplus would reduce the government’s outstanding debt. Shifts toward budget surpluses and less borrowing are indicative of restrictive fiscal policy. It is important to note that a budget deficit is different from the national debt. A deficit occurs when government spending exceeds revenue over a year, quarter or month. A deficit will increase the size of the national...
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...objectives of the Pizza king restaurant is how they can reduce the people queueing, how to make the system efficient, how they can improve their financial difficulties and increases the profit. The Pizza king restaurant gives 5% discount to their customer if they spend more than £20. If the customer buys 20 large pizza then it must be approved by the manager. In this job I am trying to help the Pizza king restaurant because the system they are using is inefficient and increase people queueing because...
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...A Rebuttal to "Democrat Budget Proposal is Unrealistic" The budget deficit of the United States has exceeded over $1 trillion and debate is raging over how to reduce the budget deficit without further negative impacts on the economy, business, and jobs. As the federal government approaches the borrowing limit of $14.3 trillion, the Democrat argument is to raise the debt ceiling in order to allow for continued borrowing and meet current financial obligations or default on its debt or risk financial collapse as a result of decreased creditor confidence (Toomey, 2011). Republicans have countered that they will not allow debt ceiling increases without substantial cuts in spending and without increases in taxes (Toomey, 2011). The article, “Democrat Budget Proposal is Unrealistic,” posted on www.caldwellteaparty.org, provides as its’ central thesis that government spending should be decreased to 2008 levels and claims that the current Democrat-led administration as having “recorded and performed the most gargantuan, massive, unconscionable, ruinous, explosive, erratic, careless, extreme, astronomical increase of the deficit EVER in U.S. History” (snaketread, 2011, para. 7). This article is examined and a rebuttal provided to its various claims. Analysis and Rebuttal The central thesis of the article is that government spending should be reduced to 2008 levels and that the recent budget deficit issue is the result of gross overspending of the current administration’s policy...
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...Financial budget planning for many states can be a complex issue. The planners are looking at the large scale of things and tend to extend costs of operations to the agencies that perform the daily operations of state government without their input. This lack of input may affect many programs and daily operations when the budgets are submitted. There are many areas that may be under funded, such as salary increase, specific legislative programs of interest like energy reduction, establishing a tobacco free environment on state property, unexpected spikes in utility costs and the unpredictable revenues gained or lost from natural resources such as Oil and Natural Gas or any other resource specific to a state’s gain in revenue. Government Financial Planning State Government will spend a vast amount of time planning for upcoming fiscal years and the budgetary requirements needed to sustain the states operations during that particular fiscal year. Unfortunately many planners look at the big picture only and leave the small details to the individual state agencies to overcome the shortages within their operating budgets that were appropriated and distributed to them through legislation. One of the drawbacks is when legislation passes new requirements such as energy reduction, but fails to include how this new requirement are to be funded and how this type of action impacts the budgets of state agencies especially ones that are already operating on a small budget. Financial...
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...and cons of changing each type of current asset and how changes would interact to affect profits and EVA. Based on the Exhibit 1 data, does SKI seem to be following a relaxed, moderate, or restricted working capital policy? A través del Current, Quick, Turnover Cash and Securities y el DSO ratio podemos notar que SKI equipment tiene una política relajada ya que el uso de capital de trabajo es un poco menor que las ventas de la empresa. b) How can one distinguish between a relaxed but rational working capital policy and a situation in which a firm simply has a lot of current assets because it is inefficient? Does SKI’s working capital policy seem appropriate? Reducir riesgos, deudas o inventario excedente nos ayuda a saber cuando una política relajada es adecuada y no es una falla en la administración, pero la empresa parece tener buenas rotaciones, pero el capital de trabajo consume las ganancias. c) Assume that SKI’s payables deferral period is 30 days. Now, calculate the firm’s cash conversion cycle. INVENTORY CONVERSION PERIOD | 75.7 | RECEIVABLESCONVERSION PERIOD | 45.6 | PAYABLES CONVERSION PERIOD | 30 | CCC | 91.4 | d) What might SKI do to reduce its cash and securities without harming operations? In an attempt to better understand SKI’s cash position, Barnes developed a cash budget. Data for the first 2 months of the year are shown in Exhibit 2. (Note that Barnes’ preliminary cash budget does not account for interest income or interest expense...
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...………………………………………………………………………………………………………..10 Executive Summary The G&S Society is planning their 1993/1994 season which also happens to be the 40th year of putting on a production of an operetta. The Society’s mandate is to provide the students, faculty, alumni and community an opportunity to participate in and enjoy a high quality theatre. The performance is put on with a very tight budget and tight timelines. With the performance manly run through volunteer time there is a lot of pressure put on these volunteers to put in a lot of time to ensure of a high quality production in the short timelines provided. As well with the Final Exam period and shutdown at Christmas break puts more pressure on the team. For the 40th season additional money will be spent on recruitment ads to speed up the hiring process and finding experience people for the production crew. As will the cast will be asked to increase their performances from 3 a week to on average 3.6 over a 10 week period. The main goal of the team is to have a sell-out high quality performance. Issue Identification Short Timeline Based on the Budget for the operetta only being approved at the start of September the producer only has around 100 days to take nothing to an amazing high quality 1st night performance. With the larger percentage of the hours required to complete all the tasks...
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...Notes 1. Describe what the master budget is and explain its benefits Budgets represent in financial and nonfinancial terms the plans of a business for a specified period of time. Financial budgets are, in essence, financial statements that report expected or proposed future activity instead of what has already occurred. Supporting these financial budgets are nonfinancial budgets that report expected or proposed future activity in areas such as number of employees, new products developed, and number of units produced or sold. 2. Describe the advantages of budgets Budgets are an important part of a well-designed management control system. A well-designed and properly administered budget can motivate employees, provide feedback for evaluation of performance, and promote coordination between departments. Although companies still need to conduct a cost-benefit analysis to ensure that the expected benefits of a budget exceed the costs of implementing a budget, the benefits of a budget are significant. 3. Prepare the operating budget and its supporting schedules Budgets usually cover a specific period of time, such as a month, quarter, or year. The most common budget is a one-year budget, which may then be subdivided into monthly and quarterly segments. Preparation of a budget typically begins with an estimate of revenues and ends with the budgeted income statement. A common nine-step approach to developing an operating budget and supporting schedules is as follows: ...
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...11/04/2010 Chapter 16. Mini Case for Working Capital Management Dan Barnes, financial manager of Ski Equipment Inc. (SKI), is excited, but apprehensive. The company's founder recently sold his 51% controlling block of stock to Kent Koren, who is a big fan of EVA (Economic Value Added). EVA is found by taking the net operating profit after-tax (NOPAT) and then subtracting the dollar cost of all the capital the firm uses: EVA = NOPAT – Capital costs = EBIT(1 – T) – WACC (Total capital employed). If EVA is positive, then the firm is creating value. On the other hand, if EVA is negative, the firm is not covering its cost of capital and stockholders' value is being eroded. Koren rewards managers handsomely if they create value, but those whose operations produce negative EVAs are soon looking for work. Koren frequently points out that if a company can generate its current level of sales with fewer assets, it would need less capital. That would, other things held constant, lower capital costs and increase its EVA. Shortly after he took control of SKI, Kent Koren met with SKI's senior executives to tell them of his plans for the company. First, he presented some EVA data that convinced everyone that SKI had not been...
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...PRE-BUDGET REVIEW: AUTUMN STATEMENT 2012 1101 4457 Contents Page 1.0 Introduction 2.0 Three Key Issues 3.0 Key Issue Proposed 4.0 Conclusion 5.0 References 6.0 Bibliography Introduction The purpose of the pre budget review is to draw the attention of investors to the proposed changes to be made to the economy and also be able to make necessary arrangement to adapt to the policy. The 2012 pre budget proposed by the Chancellor is based on three key issues; the Personal Allowance Increase, which is meant for the aging population, an issue which has always been addressed from previous budgets. The purpose of the increase in Annual Investment Allowance is to support small and medium firms to boost production from £25,000 - £250,000 for just a short period of two years. Lastly, the pension savings allowance decrease, which the government aims to use for reducing its budget deficit by a quarter of a million pounds that would be of benefit on the long run. These subjects shall be addressed in details on how it would have an effect on the government, employees, employers, corporations, and pensioners because this change would either affect them positively or negatively. This change would be of benefit to the pension scheme on long terms basis based on the fairness of tax treatment for the basic taxpayers who would benefit £170 while the higher rate tax payers by £42.50, giving an estimate of 23.6 million taxpayers gaining from the reductions...
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...Discuss budgetary items that raise concern in the budget planning A master budget is the central planning tool for a company; it should include the following areas: * Direct Labor Budget * Direct/Raw Materials Budget * Finished Goods Budget * Manufacturing Overhead Budget * Production Budget * Sales Budget * Selling and Administrative Expense Budget Competition Bikes’ budget is subdivided into smaller budgets. The objective of the master budget is to provide a forecast based on sales projections for the next budget period (quarter, semester or a year). The master budget should meet the company goals. After analyzing the master budget for Competition Bikes we found a few areas of concern: The first one was a disregard of previous years’ trends. When year eight was analyzed we discovered changes in the economy which negatively impacted the company because of a decrease in sponsorships affecting the company’s sales. Competition Bikes should have taken a more conservative approach and set the budget at the same level of sales of year eight or have a more conservative increase on sales projections at no more than 1.5%, to reduce the risk of creating over sales and as a consequence to trigger a ripple effect of over-budgeting the operational and production budgets. Another area of concern is that utilities expenses were double recorded, once under “utilities” and another under “utilities and services”. In the same area of utilities we identified...
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...machinists in the company. He had been with Ferguson & Son for many years and was promoted to supervisor of the machine shop when the company expanded and moved to its present location. The president (Robert Ferguson, Sr.) had often stated that the company’s success was due to the high quality of the work of the machinists like Tom. As a supervisor, Tom stressed the importance of craftsmanship and told his workers that he wanted no sloppy work coming from his department. When Robert Ferguson, Jr. became the plant manager, he directed that monthly performance comparisons be made between actual and budgeted costs for each department. The departmental budgets were intended to encourage the supervisor’s to reduce inefficiencies and to seek cost reduction opportunities. The company controller was instructed to have his staff “tighten” the budget slightly whenever a...
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...Balanced Budget Todd Driscoll ECO 203 Principles of Macroeconomics Instructor: Jason Friedline October 23, 2012 Balanced Budget Economists generally agree that high budget deficits today will reduce the growth rate of the economy of the future. The difference between what a government spends and what it collects in taxes in a given period is known as a budget deficit. There are many reasons why this might happen. One might be that if our government keeps spending money that does not exist obviously the more debt will accumulate. The government cannot keep this up without creating more debt. It the same as budgeting you personal accounts. If you get a new credit card or loan to consolidate old debt and then re-use your old cards, it rather defeats the purpose of getting out of debt. Another reason might be that due to the enormous loss of jobs there are less taxes being paid to pay our nations bills or to re-invest back into the economy. There is no point to list these reason in number order there are so many. If the deficit is growing it affects the nation savings, in turn, reduces national income. This may become possible if interest rates go up or domestic investments fall. Economists agree these a few things on when it comes to a high deficit. Deficits over a short period do not really have much affect, because the United States can borrow to cover these gaps due to the dollar’s value as the leading currency. If the deficit is sustained over a long period...
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...The Formal Control Process No Yes Communication Feedback Measurement Corrective action Revise Revise Responsibility center performance Rules Budgeting Report actual versus plan Was Performance satisfactory Other information Strategic Planning Goals and strategies Goals: The overall objectives, purpose and mission of a business that have been established by its management and communicated to its employees. The organizational goals of a company typically focus on its long range intentions for operating and its overall business philosophy that can provide useful guidance for employees seeking to please their managers. Goals are predetermined and describe future results toward which present efforts are directed. Rules. A business rule is a rule of a business, company, or corporation. It is a rule that defines or constrains some aspect of business and always resolves to either true or false. Business rules are intended to assert business structure or to control or influence the behavior of the business.Business rules describe the operations, definitions and constraints that apply to an organization. Business rules can apply to people, processes, corporate behavior and computing systems in an organization, and are put in place to help the organization achieve its goals. For example a business rule might state that no credit check is to be performed on return customers. Other examples of business rules include requiring a rental agent to disallow a rental tenant if...
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...done through taxes and spending and monetary policies, through which it manages the supply of money. In this paper, I will discuss the why high deficits of today will reduce growth rate of the economy in the future, look at the history of our nation’s debt and deficits, different elements that causes of deficit and why the cause actually matters, what role the fiscal and monetary policies have to lead to higher or lower budget deficits and how deficits affect the overall long-term economic growth and debt of the U.S. Let us first begin by learning the difference between the terms debt and deficit. In economics, the term deficit means a shortfall in revenue of a fiscal year. It is when the government’s revenue called receipts, which are collected taxes (payroll, corporate, excise, income and social insurance), fee revenues and tariffs that are called receipts are lower that what is spent called outlays. In other words, the federal budget deficit is the yearly amount by which spending exceeds revenue. The term debt is described as an accumulation of deficits so the national debt is the total amount of money owed by the government. It is calculated by adding all of the deficits minus the surpluses since the nation’s inception and you get the current national debt. According to Econintersect, “the estimated 2011 budget deficit is at almost $1.5 trillion, following deficits of $1.4 trillion in 2009 and $1.3 trillion in 2010.” ¶ 1. This is disturbing when measured as a percentage...
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