Showing posts with label United States. Show all posts
Showing posts with label United States. Show all posts

Saturday, March 23, 2019

Verizon Communications Inc. is a major telecommunications company in the United States. Two recent balance sheets for Verizon disclosed

Verizon Communications Inc. is a major telecommunications company in the United States. Two recent balance sheets for Verizon disclosed the following information regarding fixed assets:

End of Year (in millions) Beginning of Year (in millions) Property, plant, and equipment $220,163 $230,508 Less accumulated depreciation 136,622 140,561 Property, plant, and equipment (net) $ 83,541 $ 89,947



Verizon’s revenue for the year was $131,620 million. Assume that the fixed asset turnover ratio for the telecommunications industry averages approximately 1.1. 

a. Determine Verizon’s fixed asset turnover ratio. Round to one decimal place.
b.  Interpret this ratio with respect to the industry average.


Answer:
Verizon: $
131,620 = 1.5 ($89,947 + $83,541) / 2
Verizon earns $1.50 revenue for every dollar of fixed assets. Telecommunications 
requires a significant investment in the network in order to generate revenues.
The industry average fixed asset turnover ratio is 1.1. Thus, Verizon is using its
fixed assets more efficiently in generating revenues than the industry as a whole. 
The reason would require further analysis into the nature of Verizon’s fixed assets

and revenues, but is likely related to having high data volume on its network.

Monday, December 17, 2018

Amazon.com, Inc. is the largest Internet retailer in the United States. Amazon’s income statements through income from operations for two recent years are as follows (in millions):

Amazon.com, Inc. is the largest Internet retailer in the United States. Amazon’s income statements through income from operations for two recent years are as follows (in millions):

Amazon.com, Inc. Operating Income Statements For the Years Ended December 31 (in millions) Year 2 Year 1 Product sales. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  $70,080 $60,903 
Service sales. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   18,908   13,549 
      Total sales. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $88,988 $74,452 
Cost of sales. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $62,752 $54,181 
Fulfillment. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  10,766  8,585 
Marketing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  4,332  3,133 
Technology and content. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  9,275  6,565 
General and administrative . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  1,552  1,129 
Other operating expense (income), net . . . . . . . . . . . . . . . . . . . . . . . . . . .         133         114 
     Total operating expenses. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $88,810 $73,707 
Income from operations. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $      178 $      745 


a. Prepare a vertical analysis of the two operating income statements. Round percentages to one decimal place.

b.  Use the vertical analysis to explain the decrease in income from operations. 


Answers:
a.
Amount Percent Amount Percent
Product sales$70,080 78.8% $60,903 81.8%
Service sales18,908 21.2% 13,549 18.2%
Total sales$88,988 100.0% $74,452 100.0%
Cost of sales$62,752 70.5% $54,181 72.8%
Fulfillment10,766 12.1% 8,585 11.5%
Marketing4,332 4.9% 3,133 4.2%
Technology and content 9,275 10.4% 6,565 8.8%
General and administrative 1,552 1.7% $ 1,129 1.5%
Other operating expense (income), net 133 0.2% 114 0.2%
Total operating expenses $88,810 99.8% $73,707 99.0%
Income from operations $ 178 0.2% $ 745 1.0%
b. The vertical analysis indicates that the income from operations declined from 1.0% to
0.2% of sales between the two years. Total expenses increased from 99.0% to 99.8%
of total sales. This increase is explained by the increase in fulfillment (11.5% to
12.1%), marketing (4.2% to 4.9%), technology and content (8.8% to 10.4%), and general
and administrative (1.5% to 1.7%) expenses. There was a sizable decrease in the cost
of sales from 72.8% to 70.5% of total sales. However, this decrease was not sufficient 
to offset the increases in the other expenses; thus, total expenses increased and 
income from operations decreased as a percent of total sales between the two
years. Management should investigate the reasons for the expense increases,
paying special attention to technology and content.  

Friday, December 14, 2018

The Home Depot is the world’s largest home improvement retailer and one of the largest retailers in the United States based on net sales volume

The Home Depot is the world’s largest home improvement retailer and one of the largest retailers in the United States based on net sales volume. The Home Depot operates over 2,200 Home Depot® stores that sell a wide assortment of building materials and home improvement and lawn and garden products.

The Home Depot recently reported the following balance sheet data (in millions):

                                                 Year 2 | Year 1
Total assets                            $39,946 | $40,518
Total stockholders’ equity         9,322 | 12,522

a. Determine the total liabilities at the end of Years 2 and 1.

b. Determine the ratio of liabilities to stockholders’ equity for Year 2 and Year 1. Round to two decimal places.

c.  What conclusions regarding the margin of protection to the creditors can you draw from (b)?

Answers:
a.
Year 2:  $30,624  ($39,946 – $9,322)
Year 1:  $27,996  ($40,518 – $12,522)

b.
Year 2:  3.29  ($30,624 ÷ $9,322)
Year 1:  2.24  ($27,996 ÷ $12,522)

c.
The ratio of liabilities to stockholders’ equity increased from 2.24 to 3.29 indicating an increase in risk for creditors from Year 1 to Year 2.

Thursday, October 17, 2013

Title VII of the Civil Rights Act prohibits discrimination in employment with regard to race, color, sex, religion and national origin


TRUE/FALSE
1. While the American workforce is becoming more diverse, the world’s workforce is not.
(False)

2. Title VII of the Civil Rights Act prohibits discrimination in employment with regard to race, color, sex, religion and national origin.
(True)

3. With the passage of a number of laws in the United States prohibiting discrimination against race, color, gender, religion, national origin and age, complaints filed charging discrimination have largely been eliminated.
(False)

4. A more diverse work team produces higher quality decisions because more alternatives are considered.
(True)

5. Employees who are discriminated against experience more stress at work but are no more likely to leave their jobs than those who have not faced discrimination.
(False)

6. When discrimination complaints are filed, the Equal Employment Opportunity Commission (EEOC) acts as a mediator between the company and the complainant.
(True)

7. In firms pursuing a growth strategy, there is a negative relationship between racial diversity in the firm and company performance.
(False)

8. The similarity/attraction phenomenon suggests that individuals are attracted to those who are similar to them.
(True)

9. Race, age, and attitudes are examples of surface level diversity.
(False)

10. Deep-level diversity traits are most important for early interactions in the workplace, but as time goes on, surface traits become more important.
(False)

11. A group with three older males and three younger women will have a strong faultline.
(True)

12. Research indicates that groups with strong faultlines can perform well if certain norms are established.
(True)

13. It is a commonly held stereotype that men are more relationship-oriented than women.
(False)

14. One of the explanations for the wage gap between men and women is that women pursue occupations that are lower-paying than those pursued by men.
(True)

15. Though the glass ceiling was a legitimate issue a few years ago, today the number of women in executive positions of organizations is roughly the same as the number of men at that level.
(False)

16. One rationale provided for the existence of the glass ceiling for women is that women are viewed as having personality characteristics that are not associated with successful leaders.
(True)

17. Ethnic minorities experience a wage gap and a glass ceiling even more severe than that faced by women.
(True)

18. Denny’s Restaurants were able to successfully institute diversity training efforts that increased the numbers of minority members of its board and management team as well as the number of minority franchise owners.
(True)

19. Research indicates that older employees exhibit higher absenteeism than their younger counterparts.
(False)

20. The Age Discrimination Act makes it illegal to discriminate against employees age 40 or older.
(True)

21. Research suggests that age diversity in a work team can lead to higher performance.
(True)

22. Reasonable accommodation for religious reasons does not require schedule modifications although it may require modifications to a firm’s dress code.
(False)

23. Reasonable accommodation for employees with disabilities may require the firm’s purchase of some equipment for the disabled employees’ use but does not require any schedule or job duty modifications.
(False)

24. Disclosing sexual orientation is the key to explaining work attitudes of lesbian, bisexual, gay and transgender employees.
(False)

25. To break the ice in an interview situation, an interviewer could legally ask, “What are some of the traditions your family practices for Christmas”?
(False)

26. One suggestion for building a culture that respects diversity is that managers should be accountable for diversity-related goals.
(True)

27. Affirmative action programs are among the most controversial diversity management methods available.
(True)

28. Preferential treatment programs for minorities can be illegal in some cases.
(True)

29. Research suggests that some employees have a stigma attached to them because they were hired under an affirmative action program.
(True)

30. In the United States, the workforce is becoming increasingly multicultural.
(True)

31. An expatriate is an employee who is temporarily assigned to work in a foreign country.
(True)

32. Low power distance societies view an unequal distribution of power as relatively acceptable.
(False)

33. Companies high in uncertainty avoidance prefer predictable situations and have low tolerance for ambiguity.
(True)

34. In collectivist cultures, the importance of family is critical to understanding the nature of the society.
(True)

35. In high power distance companies, participative decision making is a regular process.
(False)

36. Feminine cultures are more likely to be characterized by a separation of gender roles than masculine cultures.
(False)

37. Developing an openness to different experiences is a very viable method to prepare oneself for a global career.
(True)

38. To enhance their cultural intelligence, employees should become experts in one culture.
(False)

39. Ethnocentrism is the belief that one’s own culture is superior to other cultures.
(True)

40. Ethical standards held in different societies may emphasize different behaviors as ethical or unethical.
(True)

41. Managing diversity effectively may have different meanings in different cultures.
(True)


42. IBM is a pioneer in programming for a diverse workforce.
(True)

43. IBM’s diversity management task forces acted on issues that were either based in reality or perception.
(True)

44. IBM, like other firms today, has little difficulty finding minority representation in the computer science and engineering fields.
(False)

45. IBM’s culture of respecting diversity seems to be creating a competitive advantage for the firm.
(True)