Financial data can highlight the strengths of an organization, as well as magnify potential areas of concerns. Analysis of financial statement allows for the understanding of a company’s past performance, and the ability to make educated assumptions about their future performance (De Mello-e-Souza & Awasthi, 2009). This is especially important when non-profit organization establish business relationships with for-profit companies. In the public school systems, it is essential that human resource professionals have a working knowledge of the fiscal health in the for-profit area. One primary method of assessment will be through an understanding of an organization’s financial ratios. Bruce (2008) states that “financial ratios are computed to evaluate an organization’s effectiveness and efficiency” and these ratios assist in quantifying various aspects of the business. Public school human resources professionals with this knowledge can contribute valuable insight when assessing potential vendor relationships. Vendors of educational materials, specifically textbooks, is one of the most important business relationships for public schools. However, another key aspect a public school seeks is the company’s transparency. There are many widely known publishers for educational material and the difficulty in locating company financial information online was surprising. After researching several of the larger name publishers, Scholastic Corporation (SCHL) possessed the necessary financial data to assess. Additionally, SCHL demonstrates a high level of transparency, specifically through their website. Their annual reports, both current and past, are easily accessible on the company website. Therefore, analysis of the financial stability of an a... ... middle of paper ... ...=ehost-live&scope=site De Mello-e-Souza, C. A., & Awasthi, V. N. (2009). Probing Financial Statements in a Post-Sarbanes-Oxley World. Strategic Finance, 90(10), 37-45. Retrieved from http://ezproxy.villanova.edu/login?URL=http://search.ebscohost.com/login.aspx?direct=true&db=bft&AN=510786741&site=ehost-live&scope=site Wells, J. T. (2001). Irrational ratios. Journal Of Accountancy, 192(2), 80-83. Retrieved from http://ezproxy.villanova.edu/login?URL=http://search.ebscohost.com/login.aspx?direct=true&db=bft&AN=510179496&site=ehost-live&scope=site Accounting Tools. Retrieved from http://www.accountingtools.com/price-earnings-ratio Scholastic Corporation Annual Reports. Retrieved from http://investor.scholastic.com/annuals.cfm Scholastic Corporation. Corporate Financials. Annual Figures. Retrieved from http://www.lexisnexis.com.ezp1.villanova.edu/hottopics/lnacademic/
Corporations keep various types of financial records and it is the responsibility of managers to make sure that the records are maintained and resolved at the end of the fiscal year. Most company has shareholders that want a year-end account on how the company has done and with a projection of what the company is capable of doing in the future. The shareholders have a vested interest and want to be kept informed on how the company is doing financially. Financial records for major corporations are public knowledge and this paper is comparing Target and Wal-Mart and their financial standings.
Dey, A. (2010). The Chilling Effect of Sarbanes-Oxley: A Discussion of Sarbanes-Oxley and Corporate Risk-Taking. Journal of Accounting And Economics, 49(1-2), 53-57. doi:http://proxy.ulib.csuohio.edu:2279/10.1016/j.jacceco.2009.06.003
In 2002, Congress passed the Sarbanes-Oxley Act (SOX) to strengthen corporate governance and restore investor confidence. The act’s most important provision, §404, requires management and independent auditors to evaluate annually a firm’s internal financial-reporting controls. In addition, SOX tightens disclosure rules, requires management to certify the firm’s periodic reports, strengthens boards’ independence and financial-literacy requirements, and raises auditor-independence standards.
Throughout the past several years major corporate scandals have rocked the economy and hurt investor confidence. The largest bankruptcies in history have resulted from greedy executives that “cook the books” to gain the numbers they want. These scandals typically involve complex methods for misusing or misdirecting funds, overstating revenues, understating expenses, overstating the value of assets or underreporting of liabilities, sometimes with the cooperation of officials in other corporations (Medura 1-3). In response to the increasing number of scandals the US government amended the Sarbanes Oxley act of 2002 to mitigate these problems. Sarbanes Oxley has extensive regulations that hold the CEO and top executives responsible for the numbers they report but problems still occur. To ensure proper accounting standards have been used Sarbanes Oxley also requires that public companies be audited by accounting firms (Livingstone). The problem is that the accounting firms are also public companies that also have to look after their bottom line while still remaining objective with the corporations they audit. When an accounting firm is hired the company that hired them has the power in the relationship. When the company has the power they can bully the firm into doing what they tell them to do. The accounting firm then loses its objectivity and independence making their job ineffective and not accomplishing their goal of honest accounting (Gerard). Their have been 379 convictions of fraud to date, and 3 to 6 new cases opening per month. The problem has clearly not been solved (Ulinski).
Non-financial information is significant in order for the organization to measure and evaluate their performances every year. The information obtained from non-financial analysis allowed the company to make decision with the aid of other information as well. For example, information such as financial and non-financial analysis play important role for the management team to make their decision whether to invest in the company or not. There are many ways to measure a non-financial performance of an organization. Customer’s satisfaction on the products offered, employee’s satisfaction, product safety, executive’s compensation, etc., are the different aspects that a company may look into it for the evaluation of their performances.
This project displays the evaluation of the financial performance of a publicly traded US Corporation, based on the information that is found. It will include some of the most important financial statistics that that company has on their most recent 10k reports. Once all the financial information of that company has been collected, a conclusion will be drawn based on the finding as well as comparing those stats to the stats of their leading competitors.
Evaluating a company’s financial condition can be done by looking at its profitability or its ability to satisfy long-term commitments. These measures can be viewed through an analysis of a company’s financial statements, including the balance sheet and income statement. This paper will look at the status of Scholastic Company’s (Scholastic) ability to satisfy its long-term commitments and at the profitability of Daktronics, Inc. (Daktronics). This paper will include various financial ratio calculations and an analysis of the notable trends. It will also discuss the profitability and long-term borrowing positions of the firms discussed.
Important factors of a company’s outlook are its financial strength and weaknesses. These factors can be evaluated by reviewing the firm’s financial statements and using ratios to help measure a company’s liquidity, leverage, activity, profitability, and growth. Financial ratios are computed by using the information found in a company’s financial statements: primarily income statement and balance sheet. The calculations from the current year, previous years, and other companies in the industry are used as a basis to identify and ev...
Schofield (2014) researches the difference between public and private company financial reporting. For instance, a private company has fewer consumers reviewing their financial statements, whereas public companies could have multiple consumers reviewing financial statements. In addition, private companies typically have less specialized accounting personnel, whereas public companies will have several. Lastly, Schofield (2014), reviewed the number of amendments proposed and finalized to help benefit private companies financial reporting.
Chapter Summary. (n.d.). Financial and Managerial Accounting | . Retrieved May 28, 2014, from http://highered.mcgraw-hill.com/sites/0072396881/student_view0/chapter6/chapter_summary.html
All financial information and notes are used to asses a company’s health and predict what the coming year may hold. The information found on the financials contains a large amount of information and once one understands how to interpret it then one has a visual of the company’s health.
The Purpose of Financial Statements The financial statements of a business are used to provide information about the status of the business, set performance targets and impose restrictions on the managers of the firm as well as provide an easier method for financial planning. The financial statements consist of the Profit and Loss Account, Balance Sheet and the Cash Flow Statement. There are four areas of information, which we can collect from a company's financial statements. They are: Ÿ Profitability - This information comes from the Profit and Loss account. Were we can compare this year's profit with the previous years.
When computing financial relationships, a good indication of the company's financial strengths and weaknesses becomes clear. Thus they however facilitate year-on-year comparison to develop insights into trends. Examining these accountingratios ratios over time provides some insight as to how effectively the business is being operated.
Qualitative features of financial information are imperative in making decisions for the firms and corporate. Financial information reveals a firm’s ava...
Financial statements can provide a wealth of information about a given organization. These statements provide information about the company’s financial position, cash flows, operations, performance and changes in the financial position. This information may be used as part of the decision making process for employees, shareholders, investors and competitors. Based upon these financial statements, key ratios are used to provide additional insight as to the financial health of a given company. Being familiar with financial statements can increase financial literacy. For this discussion, Citigroup’s (Citi) financial statements will be reviewed.