Management Notes

Reference Notes for Management

Evaluating Compensating Balances | Financial Statement Analysis

Evaluating Compensating Balances

Evaluating Compensating Balances |  Financial Statement Analysis | Discussion Questions | Westcliff University 4–1. Companies typically report compensating balances that are required under a loan agreement as unrestricted cash classified within current assets. a. For purposes of financial statement analysis, is this a useful classification? Explain. b. Describe how you would evaluate compensating balances. Yes, … Read more

LIFO and FIFO – Inventory Costs and Output Prices | Financial Statement Analysis


LIFO and FIFO | Declining Inventory Costs and Stable Output Prices | Inventory Valuation | Financial Statement Analysis | Westcliff University | Discussion Question During a period of rising inventory costs and stable output prices, describe how net income and total assets would differ depending upon whether LIFO or FIFO is applied. Explain how your … Read more

Colgate-Palmolive – Financial Statements | Financial Statement Analysis


Answer the following questions using the annual report of Colgate in Appendix A of your textbook. Please develop a 2-3 page APA formatted paper when giving responses. 1. Who is responsible for the preparation and integrity of Colgate’s financial statements and notes? Where is this responsibility stated in the annual report? 2. In which note … Read more

Measurement of income under accrual accounting | Financial Statement Analysis

income under accrual accounting

Measurement of income under accrual accounting | Financial Statement Analysis In a discussion of corporate income, a user of financial statements alleges that “One of the real problems with income is that you never really know what it is. The only way you can find out is to liquidate a company and reduce everything to … Read more

Rules of Conduct and Rules of Measurement | Financial Statement Analysis

Rules of Conduct and Rules of Measurement

1. Discuss your views on the difference between “rules of conduct” and “rules of measurement.” 2. Explain how accounting standard setting is a political process. Identify arguments for and against viewing accounting standard-setting as political. Rule of Conduct Vs Rule of Measurement Rule of conduct represents the set of ethical guidelines for the people working … Read more

Advantage of Cash Discounts – Business Decisions | Financial Statement Analysis

Advantage of Cash Discounts

Review the data for Case 1-4, Business Decisions Using Financial Ratios, on page 62. Then, answer the following question: Is it becoming easier for the company to meet its current debts on time and to take advantage of cash discounts? How do you know? If we compare the data of previous years and the current … Read more

Ethics Challenge – Reporting decision | Financial Statement Analysis

Ethics Challenge

Review the data for Case 1-7, Ethics Challenge, on page 63. Then, answer the following questions: 1. Why do you think the CEO decided to report these 4 ratios instead of the 11 ratios that you prepared? 2. Comment on the possible consequences of the CEO’s reporting decision. Among the eleven ratios prepared, the CEO … Read more