http://www.bloomberg.com/apps/news?pid=20601082&sid=asza3wG0bq90&refer=canada
Summary:
The Canadian currency has dropped from near an eight months high, since unemployment has been happening, . Traders predict that the U.S Federal Reserve may increase the interest rates. Meny Grauman, an economist, announced that the loonies have been overdone. The Canadian currency might reach and equal to the U.S. Also, Bank of Canada believed the unprecedentedly rapid rise in Canadian dollar would fully offset the improvement of economic conditions. In Bloomberg survey, it showed that the unemployment rate rose higher than their prediction. U. S. has lost 504,000 jobs in eight months and it was the highest jobless rate since 1983; however, a Chief currency strategy in TD Securities Inc, Shaun Osborne believes the confidence in a rebound would rise. In the interest-rate bets, traders started to price in chances that Fed may lift interest rate in the recession eases.
Connection:
Chapter 6 was divided into 5 sections: Cash, Short-Term Investments, Accounts Receivable, Notes Receivable, and Statement Analysis Consideration. In this article, there is a connection with a small portion of the section that deals with cash. Cash has a very strong 'purchasing power', which is the ability to be exchanged for goods and services. Cash can undertake a variety of forms: currency, cheques, money orders, on hand, money deposited in banks and many more. Currency is something we cannot control and depending on how well our economy is doing, it will always change. For example, in this article, as the US dollar goes down due to the high unemployment rate, the Canadian dollar started to increase rapidly. Internal control is also mentioned in this chapter. With better internal control, we can make the control of cash much easier and the processing of transactions much more efficient.
Reflection:
With limited amount of jobs and more people unemployed, fewer people buy goods and services which results in the economy deteriorating even further. Although the Canadian dollar is getting closer to the US dollar, Canadian businesses will still have to lower their prices for the US since they are our biggest trading partner. Therefore, if the US is in trouble, Canada will be involved as well. As for internal control in the company, a company should never overdue it. Investing too much into internal control can make the company very safe, but it will be very pricy and might not really be worth it in the end.
Thursday, June 17, 2010
Tuesday, April 13, 2010
Chapter 5
http://www.financialpost.com/executive/story.html?id=2876480
Summary
Values-led leaders are what our world is in need today. This article suggests that universities and colleges in Canada should add some type of leadership program that focuses on developing humility and intergrity. This is because we cannot just cram our programs with models and theories, we need to give students examples and let them see incredible solutions companies make at complex times. An ethical character is what we should aim towards in these leadership programs. The article also suggest that we need new role models for these students to look up to. We have to have more ethical companies and to start this we need to educate students on how to become ethical and trustworthy in the business world. These models can give students hands-on experience allowing them to make decisions for complex problems. As they do that, they can mentor them so that the students realize that being ethical is the way to success. If we follow these examples, we can create a new generation with value-led and quiet leaders.
Connection
Chapter 5 is based on cash-flow statements. Cash flow statements are the cash flows that are summarized in financial statements. Therefore these statements should be reliable and accurate. Regarding GAAP related to the cash flow statement, United States and International Financial Reporting Standards are very symmetric to Canadian practices. Although they may seem very symmetric, but there are still some difference that are present in the GAAPs. In the United States, interest paid on debt must be classified as an operating cash flow. However, under the International Financial Reporting Standards, it can be classified as a financing cash flow. For the US GAAP, dividends received on investments must be classified as operating cash flows. As for the International Financial Reporting Standards, it can be classified as investing cash flows. As you can see, there are a lot of GAAPs out there and a slight difference in every place. If students are taught about GAAPs earlier, it will help them out on the long run.
Reflection
In this article, examples of value-based leadership is presented. Trying to provoke schools to teach business students ethics earlier will benefit them on the long run. Being ethical is a very important matter in the business world. It means a lot to be ethical. One must be trustworthy and honest in everything they do. Either if it is just making a business transaction between a salesperson and a consumer or making the transaction into financial statements. In my point of view, being able to perform ethics in a business takes skills and experience. Gaining trust from consumers can increase the cash flow of a company because consumers will be willing to pay more if a business has good customer service. All in all, ethics is very important in the business world.
Summary
Values-led leaders are what our world is in need today. This article suggests that universities and colleges in Canada should add some type of leadership program that focuses on developing humility and intergrity. This is because we cannot just cram our programs with models and theories, we need to give students examples and let them see incredible solutions companies make at complex times. An ethical character is what we should aim towards in these leadership programs. The article also suggest that we need new role models for these students to look up to. We have to have more ethical companies and to start this we need to educate students on how to become ethical and trustworthy in the business world. These models can give students hands-on experience allowing them to make decisions for complex problems. As they do that, they can mentor them so that the students realize that being ethical is the way to success. If we follow these examples, we can create a new generation with value-led and quiet leaders.
Connection
Chapter 5 is based on cash-flow statements. Cash flow statements are the cash flows that are summarized in financial statements. Therefore these statements should be reliable and accurate. Regarding GAAP related to the cash flow statement, United States and International Financial Reporting Standards are very symmetric to Canadian practices. Although they may seem very symmetric, but there are still some difference that are present in the GAAPs. In the United States, interest paid on debt must be classified as an operating cash flow. However, under the International Financial Reporting Standards, it can be classified as a financing cash flow. For the US GAAP, dividends received on investments must be classified as operating cash flows. As for the International Financial Reporting Standards, it can be classified as investing cash flows. As you can see, there are a lot of GAAPs out there and a slight difference in every place. If students are taught about GAAPs earlier, it will help them out on the long run.
Reflection
In this article, examples of value-based leadership is presented. Trying to provoke schools to teach business students ethics earlier will benefit them on the long run. Being ethical is a very important matter in the business world. It means a lot to be ethical. One must be trustworthy and honest in everything they do. Either if it is just making a business transaction between a salesperson and a consumer or making the transaction into financial statements. In my point of view, being able to perform ethics in a business takes skills and experience. Gaining trust from consumers can increase the cash flow of a company because consumers will be willing to pay more if a business has good customer service. All in all, ethics is very important in the business world.
Thursday, March 4, 2010
Chapter 4
http://www.financialpost.com/most-popular/story.html?id=2631530
Summary
BMO (Bank of Montreal) has reported a three-fold jump in profit for the first quarter, well above market expectations. Due to the crisis the U.S. banks had, observers were concerned about the ability of the Canadian banks. But BMO proves them wrong and posted their net income from $225-million (or $0.39 per share) to $657-million (or $1.12 per share). Their credit loss was down by $53-million from the previous quarter. When there is ups there are always downs. According to the Bank of Canada, a major worry for the banks in Canada is the number of Canadian consumers borrowing because of household income. This is all because of the housing market going record high. Another worry/concern for BMO is that U.S. operation which continues to feel affect from the recession south of the boarder. Overall, BMO has made a huge improvement raising its net income and building a stronger interest margin.
Connection
Chapter four mainly focuses on Revenue Recognition. It is very important for a company to recognize their revenue and present it in their financial statements. BMO has proved to the market that they are capable of doing well. By generating accurate and reliable financial statements, BMO can bring in new investors and give them a clear understanding on how well the company is doing. It also gives the investors the chance to decide whether or not it is a good idea to invest in them. Some questions that investors may come across may be related to the Cash-to-Cash cycle. For example, revenue can be recognized at the time of production but may even be recognize at the time of collection. A risk investors have to face is that they have to believe that BMO's financial statements are accurate and reliable and that they are not manipulating them just to catch new investor's attention.
Reflection
If I was a investor, I think it would be a good idea to look BMO up. It's always a good thing to double check and make sure the company you want to invest in is safe and sturdy. You should never set your hopes too high because things do go wrong sometimes. Nothing is perfect. In the end, I think that BMO has improved a lot in their performance over the last year. If the statements are true, with their revenue it will cause the market shares to fly and get a lot of investors interested. I am sure that if any problems were to pop up, BMO will find and give a clear and reliable solution to the shareholders/investors.
Summary
BMO (Bank of Montreal) has reported a three-fold jump in profit for the first quarter, well above market expectations. Due to the crisis the U.S. banks had, observers were concerned about the ability of the Canadian banks. But BMO proves them wrong and posted their net income from $225-million (or $0.39 per share) to $657-million (or $1.12 per share). Their credit loss was down by $53-million from the previous quarter. When there is ups there are always downs. According to the Bank of Canada, a major worry for the banks in Canada is the number of Canadian consumers borrowing because of household income. This is all because of the housing market going record high. Another worry/concern for BMO is that U.S. operation which continues to feel affect from the recession south of the boarder. Overall, BMO has made a huge improvement raising its net income and building a stronger interest margin.
Connection
Chapter four mainly focuses on Revenue Recognition. It is very important for a company to recognize their revenue and present it in their financial statements. BMO has proved to the market that they are capable of doing well. By generating accurate and reliable financial statements, BMO can bring in new investors and give them a clear understanding on how well the company is doing. It also gives the investors the chance to decide whether or not it is a good idea to invest in them. Some questions that investors may come across may be related to the Cash-to-Cash cycle. For example, revenue can be recognized at the time of production but may even be recognize at the time of collection. A risk investors have to face is that they have to believe that BMO's financial statements are accurate and reliable and that they are not manipulating them just to catch new investor's attention.
Reflection
If I was a investor, I think it would be a good idea to look BMO up. It's always a good thing to double check and make sure the company you want to invest in is safe and sturdy. You should never set your hopes too high because things do go wrong sometimes. Nothing is perfect. In the end, I think that BMO has improved a lot in their performance over the last year. If the statements are true, with their revenue it will cause the market shares to fly and get a lot of investors interested. I am sure that if any problems were to pop up, BMO will find and give a clear and reliable solution to the shareholders/investors.
Tuesday, January 19, 2010
Chapter 3
http://www.financialpost.com/news-sectors/energy/story.html?id=2607665
Summary
Oil and gas companies in Alberta are now facing a great disaster due the extra tax and royalty they have to pay according to a study on Canada's competitiveness. British Columbia and Saskatchewan also place a heavier tax and royalty burden on the energy industry compared with other sectors. According to Mr. Mintz, an influential tax expert and economist, the industries are not levelled and as a result the oil and gas companies are getting projects resulting in less capital. To help solve the problem, Mr Mintz recommended a simple royalty system similar to the structure they used for the mining companies but Alberta rejected his idea. Mr. Mintz shared his report, which contained all levels of taxes, to many people from different departments. A lower overall and royalty rate for the energy industry could translate into more revenue for Alberta, Saskatchewan, and British Columbia because companies could invest more cash and as a result extract more resources, which would give the provinces more royalties. Mr. Mintz's report found their tax and royalty rates are so low they translate into subsidies.
Connection
Chapter three focuses on the differences between the single-step income statement and the multi-step income statement. In the article, it talks a lot about taxes. Since income tax is an expense, it is recorded as income tax expense under 'expenses and losses' for a single-step income statement. As for the multi-step income statement, taxes are listed in a little section by itself which is known as 'income tax expense (or provision for income taxes)'. There is not much difference between multi-step and single-step income statements other than the layout. But even though there is a slight difference, they both end up with the same net income. Oil companies are at a great disadvantage because they have to pay more taxes than other companies. Also, due to the lack number of projects they get, they have troubles keeping their capital high. Therefore, these problems cause the financial statements for the companies to look poor and investors start to decrease causing a big ruckus for the oil and gas companies.
Reflection
In my opinion, I think that oil and gas companies are becoming more and more problematic. If they keep on doing so poorly and don't have enough projects, something bad is bound to happen. I agree with Mr. Mintz that the fields aren't levelled compared to other industries. Something that is very important in this chapter is the accounting cycle. If projects were so limited, less transaction will occur resulting in a less money made. As less money gets made, the net income becomes smaller creating a ruined financial statements show up. This triggers the discouragement in investments in the oil and gas industry causing everything to go downhill for them. I am very pleased that the oil and gas companies have been so ethical and not performing any unethical behaviour like the example on page 163. I think it is very important for a company to be ethical because if you are doing something unethical, it will only harm you in the future.
Summary
Oil and gas companies in Alberta are now facing a great disaster due the extra tax and royalty they have to pay according to a study on Canada's competitiveness. British Columbia and Saskatchewan also place a heavier tax and royalty burden on the energy industry compared with other sectors. According to Mr. Mintz, an influential tax expert and economist, the industries are not levelled and as a result the oil and gas companies are getting projects resulting in less capital. To help solve the problem, Mr Mintz recommended a simple royalty system similar to the structure they used for the mining companies but Alberta rejected his idea. Mr. Mintz shared his report, which contained all levels of taxes, to many people from different departments. A lower overall and royalty rate for the energy industry could translate into more revenue for Alberta, Saskatchewan, and British Columbia because companies could invest more cash and as a result extract more resources, which would give the provinces more royalties. Mr. Mintz's report found their tax and royalty rates are so low they translate into subsidies.
Connection
Chapter three focuses on the differences between the single-step income statement and the multi-step income statement. In the article, it talks a lot about taxes. Since income tax is an expense, it is recorded as income tax expense under 'expenses and losses' for a single-step income statement. As for the multi-step income statement, taxes are listed in a little section by itself which is known as 'income tax expense (or provision for income taxes)'. There is not much difference between multi-step and single-step income statements other than the layout. But even though there is a slight difference, they both end up with the same net income. Oil companies are at a great disadvantage because they have to pay more taxes than other companies. Also, due to the lack number of projects they get, they have troubles keeping their capital high. Therefore, these problems cause the financial statements for the companies to look poor and investors start to decrease causing a big ruckus for the oil and gas companies.
Reflection
In my opinion, I think that oil and gas companies are becoming more and more problematic. If they keep on doing so poorly and don't have enough projects, something bad is bound to happen. I agree with Mr. Mintz that the fields aren't levelled compared to other industries. Something that is very important in this chapter is the accounting cycle. If projects were so limited, less transaction will occur resulting in a less money made. As less money gets made, the net income becomes smaller creating a ruined financial statements show up. This triggers the discouragement in investments in the oil and gas industry causing everything to go downhill for them. I am very pleased that the oil and gas companies have been so ethical and not performing any unethical behaviour like the example on page 163. I think it is very important for a company to be ethical because if you are doing something unethical, it will only harm you in the future.
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