http://ctv2.theglobeandmail.com/servlet/story/RTGAM.20090522.wcurrencies0522/business/Business/businessBN/ctv-business
Summary
In this chapter, we learned about various assets as well as recognizing gains and losses. As it says in the article, the United States dollar is on the decline and is reaching new lows in 2009. The United States is perhaps the country that was hit the hardest by the recession. This meant that the government would have to undergo a process of inflation, which would cause the value of their dollar to go down because there is more money flowing through the country. When a country that big is running out of money, there is going to be a big problem. The value of money – their biggest asset – is going down. With that being said, we can look forward to more financial woes, as the US government will have to continue to borrow money and assets. The question is how will they repay their future debts and current debts at the same time?
Connections
The connections in the article come from the lowering value of the United States dollar. With the value lowering, the government will have to recognize the losses as well as reassess the actual value of their assets. The value of a currency will undergo change on the market every single day. Once the influx of cash pours in from inflation, the value of the dollar will go down. It will also cause the price of everything to increase. Also, the sources that the US is getting this money from will have to valuate the US government and figure out if they are good for the money, and maybe even use the direct write-off method just to make sure that this powerful nation receives the money that it needs, or even the allowance method if things go too far.
Reflections
It’s hard to come up with a solution for this huge problem that the US is facing. The superpower nation will have to continue to borrow money (which it can’t pay back), and will also need to print more money, which will hurt the economy too. You have to wonder why the US is continuing to use the same void solution to the same problem. Printing more money will not help because it is lowering the value of all US currency in circulation, and borrowing money will only put them in further debt. If this keeps up, then lenders will be wondering whether or not they will get their money back not just in the future but at all. Do you think that receivables from the world’s most powerful nation will not be able to be collected?
C. Tut
FAC12
Block A
Sunday, May 24, 2009
Sunday, April 5, 2009
Chapter 5 Blog - MLB feeling the effects of the recession
http://www.nationalpost.com/sports/story.html?id=1462391
Summary
There are 4 major sports leagues in North America: the NFL, NBA, NHL, and MLB. Most of these leagues are feeling the effects of the recession. Player salaries are being cut, admission prices are increasing, and there are all sorts of advertising strategies being used to get more people at games. Of those four leagues however, there is one that was thought to be immune to the effects of the recession, the MLB (Major League Baseball). Since the recession hit however, baseball teams have been forced to pay their players less than they would expect. This is a major sign of the effect the economy is having on baseball because the MLB does not even have a salary cap that teams must comply with. Baseball teams no longer have the financial freedom to sign players that they want, when they want like they were able to in the past.
Connections
Chapter 5 tells us about the cash flow statement and its parts (financing activities, operating activities, and investing activities), and shows us how to take information from the past and present to try to improve the fiscal future of a company. Major League Baseball is feeling the effects of the weak economy, which means that there might be more cash flowing out of teams than into them during the upcoming season. Fans of teams may not be able to go to as many games as they would like to, seeing as they may not have the money. So, this means that the MLB and the teams themselves are going to have to see where their money is going now and try to send it somewhere that will get people into the stadium.
Reflection
When everything is said and done, baseball will survive. America’s pastime is not going anywhere any time soon. Until then, teams will have to reassess their investing and operating activities. Better players will always demand higher salaries, so teams will have to start looking for players that will play for less money, but will still contribute to the team. My assumption for lower profile teams is that they will see less revenue than before. Why? It is because people don’t have the money to go to games, and the teams don’t have the money to sign a superstar that everyone will want to go and see. Activities in the field of operations and investing will definitely be difficult ones seeing as baseball players are a spoiled bunch, and do not take too kindly to pay cuts.
C. Tut
FINAC12
Block A
Summary
There are 4 major sports leagues in North America: the NFL, NBA, NHL, and MLB. Most of these leagues are feeling the effects of the recession. Player salaries are being cut, admission prices are increasing, and there are all sorts of advertising strategies being used to get more people at games. Of those four leagues however, there is one that was thought to be immune to the effects of the recession, the MLB (Major League Baseball). Since the recession hit however, baseball teams have been forced to pay their players less than they would expect. This is a major sign of the effect the economy is having on baseball because the MLB does not even have a salary cap that teams must comply with. Baseball teams no longer have the financial freedom to sign players that they want, when they want like they were able to in the past.
Connections
Chapter 5 tells us about the cash flow statement and its parts (financing activities, operating activities, and investing activities), and shows us how to take information from the past and present to try to improve the fiscal future of a company. Major League Baseball is feeling the effects of the weak economy, which means that there might be more cash flowing out of teams than into them during the upcoming season. Fans of teams may not be able to go to as many games as they would like to, seeing as they may not have the money. So, this means that the MLB and the teams themselves are going to have to see where their money is going now and try to send it somewhere that will get people into the stadium.
Reflection
When everything is said and done, baseball will survive. America’s pastime is not going anywhere any time soon. Until then, teams will have to reassess their investing and operating activities. Better players will always demand higher salaries, so teams will have to start looking for players that will play for less money, but will still contribute to the team. My assumption for lower profile teams is that they will see less revenue than before. Why? It is because people don’t have the money to go to games, and the teams don’t have the money to sign a superstar that everyone will want to go and see. Activities in the field of operations and investing will definitely be difficult ones seeing as baseball players are a spoiled bunch, and do not take too kindly to pay cuts.
C. Tut
FINAC12
Block A
Thursday, February 12, 2009
Ch.4 Blog - RIM Records Lower Revenues Than In Previous Years.
http://ctv2.theglobeandmail.com/servlet/story/RTGAM.20090211.wrim0211/business/Business/businessBN/ctv-business
Summary
Chapter 4 focuses very strongly on revenue recognition. It stresses how important it is to not only know how much money is flowing into a business, but when to record that amount of money on the financial statements. The financial statements are the lifeblood of any organization and need to be kept accurate. Financial statements would be out of balance and accounts would be out of whack if it weren’t for revenue recognition. Just think of it this way, if you make money on the stock market, you would have to take into account the money that you had originally invested. The only money you have made is on top of your original investment. The expenses that helped create the revenue must be accounted for.
Connections
This story connects to Chapter 4 in that it is mainly about revenue. Research In Motion, the makers of the popular BlackBerry seem to have been losing money on the stock market recently. This may not have a major effect on internal employees of the company who are making millions of dollars, but it will have an effect on the external investors. The money that they have invested in the company is being lost, as the share prices will continue to drop for what seems to be until the end of this quarter. This may be easier to watch for executives, but for your typical investor, this will have a huge effect on the money coming into your business or household.
Reflections
What this chapter seems to stress is that there are many ways and many different times at which revenue can be recognized. While it may seem that poor sales are the sole cause of this performance, revenue recognition may have something to do with it. One possible answer is that a deal has been made with another company looking to buy phones, but the contracts haven’t been signed yet. Since the contracts haven’t been signed, the revenue can’t be recorded, which in turn means that it seems that money is being lost when it is indeed being made. This could be why the executives at RIM had such great confidence in a rebound next quarter. The dropping prices may also be caused by RIM not making as many BlackBerry’s as before, or RIM may not be collecting payments from a customer until a later date. All of these reasons may have something to do with the lower profits; however, we must remember not to jump to conclusions about the future. Revenue recognition can lead to confusion about a company because of the way that revenue is recorded at different times. Besides, RIM is a very successful company and I don’t see it going out of business any time soon.
C. Tut
FINAC12
Block A
Summary
Chapter 4 focuses very strongly on revenue recognition. It stresses how important it is to not only know how much money is flowing into a business, but when to record that amount of money on the financial statements. The financial statements are the lifeblood of any organization and need to be kept accurate. Financial statements would be out of balance and accounts would be out of whack if it weren’t for revenue recognition. Just think of it this way, if you make money on the stock market, you would have to take into account the money that you had originally invested. The only money you have made is on top of your original investment. The expenses that helped create the revenue must be accounted for.
Connections
This story connects to Chapter 4 in that it is mainly about revenue. Research In Motion, the makers of the popular BlackBerry seem to have been losing money on the stock market recently. This may not have a major effect on internal employees of the company who are making millions of dollars, but it will have an effect on the external investors. The money that they have invested in the company is being lost, as the share prices will continue to drop for what seems to be until the end of this quarter. This may be easier to watch for executives, but for your typical investor, this will have a huge effect on the money coming into your business or household.
Reflections
What this chapter seems to stress is that there are many ways and many different times at which revenue can be recognized. While it may seem that poor sales are the sole cause of this performance, revenue recognition may have something to do with it. One possible answer is that a deal has been made with another company looking to buy phones, but the contracts haven’t been signed yet. Since the contracts haven’t been signed, the revenue can’t be recorded, which in turn means that it seems that money is being lost when it is indeed being made. This could be why the executives at RIM had such great confidence in a rebound next quarter. The dropping prices may also be caused by RIM not making as many BlackBerry’s as before, or RIM may not be collecting payments from a customer until a later date. All of these reasons may have something to do with the lower profits; however, we must remember not to jump to conclusions about the future. Revenue recognition can lead to confusion about a company because of the way that revenue is recorded at different times. Besides, RIM is a very successful company and I don’t see it going out of business any time soon.
C. Tut
FINAC12
Block A
Subscribe to:
Posts (Atom)