International Financial Statement Analysis 3rd. Edition by Thomas R. Robinson, Elaine Henry, Wendy L. Pirie, Michael A. Broihahn, Anthony T. Cope | 9781118999479 | 1118999479 | Holooly

Financial Management

International Financial Statement Analysis

169 SOLVED PROBLEMS

Question: 9.13

Impairment of Property, Plant, and Equipment Sussex, a hypothetical manufacturing company in the United Kingdom, has a machine it uses to produce a single product. The demand for the product has declined substantially since the introduction of a competing product. The company has assembled the ...

Verified Answer:

to 1: Under IFRS, the company would compare the ca...

Question: 9.10

Amortization Expense IAS 38 Intangible Assets provides illustrative examples regarding the accounting for intangible assets, including the following: A direct-mail marketing company acquires a customer list and expects that it will be able to derive benefit from the information on the list for at ...

Verified Answer:

Because the acquired customer list is expected to ...

Question: 7.10

Bounds and Context of Financial Measures The previous example focused on the cash conversion cycle, which many companies identify as a key performance metric. The less positive the number of days in the cash conversion cycle, typically, the better it is considered to be. However, is this always ...

Verified Answer:

Using the Compustat database, the company identifi...

Question: 17.4

Asset Impairments and Restructuring Charges Two related topics that almost always require special consideration on the part of analysts are asset impairments and restructuring charges. Asset impairments are write-downs of assets required when circumstances indicate that the carrying amount of an ...

Verified Answer:

A is correct. The impairment and the restructuring...

Question: 17.5

Application of the Beneish Model Exhibit 5 presents the variables and Beneish’s M -Score for XYZ Corporation (a hypothetical company). 1 . Would the results of the Beneish model lead an analyst, using a –1.78 M -score as the cutoff , to fl ag XYZ as a likely manipulator? 2 . Th e values of DSR, GMI ...

Verified Answer:

to 1: Yes, the model could be expected to lead an ...

Question: 17.6

Non-Recurring Items Enron Corp. EXHIBIT 6 Excerpts from Enron and Subsidiaries Consolidated Income Statement, Year- Ended 31 December1 . How does the trend in Enron’s operating income compare with the trend in its income after other income and deductions (i.e., Income before interest, minority ...

Verified Answer:

to 1: Enron’s operating income varied dramatically...

Question: 17.7

Discrepancy between Net Income and Operating Cash Flows Allou Health & Beauty Care, Inc. Allou Health & Beauty Care, Inc. was a manufacturer and distributor of hair and skin care products. Exhibit 8 presents excerpts from the company’s financial statements from 2000 to 2002. Following the periods ...

Verified Answer:

to 1: Based on the income statement, the following...

Question: 17.8

Sunbeam Statement of Cash Flows As noted in the previous section, Sunbeam engaged in various improper accounting practices. Refer to the excerpt from Sunbeam’s statement of cash flows in Exhibit 24 to answer the following questions: 1. One of the ways that Sunbeam misreported its financial ...

Verified Answer:

to 1: Sunbeam’s statement of cash flows is prepare...

Question: 17.9

Classification of Cash Flows Nautica Enterprises An excerpt from the statement of cash flows from the fiscal 2000 annual report of Nautica Enterprises, an apparel manufacturer, is shown as Exhibit 25. An excerpt from the statement of cash flows from the company’s fiscal 2001 annual report is shown ...

Verified Answer:

to 1: In Exhibit 25 , Nautica reports operating ca...

Question: 17.10

Goodwill Sealed Air Corporation In August 2012, a Wall Street Journal article listed six companies that were carrying more goodwill on their balance sheets than the companies’ market values (Thurm 2012). At the top of the list was Sealed Air Corporation (NYSE: SEE), a company operating in the ...

Verified Answer:

to 1: SEE’s market cap was about $3,457 million (=...

Loading...