1. The New York times has an annual sales of 2.39 billion dollars, Net expensed of 1.05 billion dollars, and approximately 1.34 Billion dollars of revenue . The national enquirer reported annual sales of 273 million dollars, with annual revenue of 15.3 million dollars and expenses of 257 million dollars.
2. The component percentage for expenses is 43.9% and 54.1% for the percentage of revenue for the New York Times. The National Enquirer's component percentage for expenses was 94% and 6% for revenue.
3. The higher the percentage is for revenue, and lower it is for expenses, the more profitable the company is. Therefore, the New York Times is much more profitable since a larger percentage of their sales directly increases their net profit.
Based off of this limited research, it seems as though the New York Times has a much stronger income statement. For one, their sales exceed those of the National Enquirer eight-fold, which means it has a greater potential for earning. Also, its Owner's Equity is a substantial percentage of its sales. This means of the sales of the New York Times, over 40% of the money became owner's equity, whereas the National Enquirer had 94% of its sales going back into liabilities, or running the company. Therefore, The New York Times has a revenue percentage that is substantially higher, and thus is financially stronger.
Comparison
New York Times
Total Assets (sales)= 100%
Total Liabilities= 43.9%
Owner's Equity= 54.1%
National Enquirer
Total Assets (sales)=100%
Liabilities=94
Owner's Equity= 6% .
Tuesday, March 29, 2011
Friday, March 11, 2011
Interest Rates
At Citi Bank, their lowest interest rate is for a day-to-day savings account, or one intended for short use. Some of these accounts, along with their general Premier Money Market accounts only yield .1-.2% a year. Interest rates do get as high as .45% per year for Citibank's "Savings Plus Accounts" that hold over 100,000$. Annual APR or interest per year paid on auto loans ranges from 10.49% to 25.49% based on the size of the loan.
Both make their loans a lot more expensive than the interest they pay out so the bank itself can make money. Also they know that people always will need both of their services since people tend to dislike holding large amounts of cash. People will always want to make money on their saved money, and most people will never have enough money to pay for large payments (like house or cars) on their own.
At Harris Bank, the lowest yearly interest rate is .005%, while the highest interest rate gets as high as .45% longstanding loans. The loan's range is due to different financial plans and how much money is in the account.
Harris Bank's interest loan on their car's is less than at Citi Bank, averaging about 5-6% paid per year. One reason that the loan at Harris Bank was so much lower for cars was that the length at which the loan was required to be payed out was shorter than at CitiBank
The two banks have very similar savings accounts, with Citi Bank's account on average about .1% higher in interest rate. Also, Citibank's rates have more specific requirement's for exact rates that are determined strictly by how much money is put into the account. Harris Bank's car rates are much better though, With their average interest paid back to them per year half as much as the rates at Citibank. Both have much higher interest rates on loans to make a profit, so their sales coming in are higher than the interest they're paying out.
Both make their loans a lot more expensive than the interest they pay out so the bank itself can make money. Also they know that people always will need both of their services since people tend to dislike holding large amounts of cash. People will always want to make money on their saved money, and most people will never have enough money to pay for large payments (like house or cars) on their own.
At Harris Bank, the lowest yearly interest rate is .005%, while the highest interest rate gets as high as .45% longstanding loans. The loan's range is due to different financial plans and how much money is in the account.
Harris Bank's interest loan on their car's is less than at Citi Bank, averaging about 5-6% paid per year. One reason that the loan at Harris Bank was so much lower for cars was that the length at which the loan was required to be payed out was shorter than at CitiBank
The two banks have very similar savings accounts, with Citi Bank's account on average about .1% higher in interest rate. Also, Citibank's rates have more specific requirement's for exact rates that are determined strictly by how much money is put into the account. Harris Bank's car rates are much better though, With their average interest paid back to them per year half as much as the rates at Citibank. Both have much higher interest rates on loans to make a profit, so their sales coming in are higher than the interest they're paying out.
Thursday, February 24, 2011
Corporporation Types
A C Corporation gives control of management to the investors, which is good since the people who are investing their money have a large amount of control. One disadvantage is the large rate at which C Corporations are taxed, even including dividends and investor's individual shares. This also entails double taxation, or additional taxes for management and investors.
In an S Corporation, the shares are sold for capital, and the reward for the shareholders is that their shares are not directly taxed. Also, a person's ownership of stock can extend even past death, which is good since it can be passed to children and ensures its longevity in the hands of investors. Disadvantages include that the company can not sell their stocks to any person/corporation, thus must conforming to IRS regulations.
An LLC lets members essentially set up the style of management they deem best, which gives them primary control over management. Also, there is no tax on shares since income is simply passed within the company. Disadvantages include laws restricting some forms of capital raising, like the selling of all interests, and in certain states, shares may not be perpetual under state law.
In an S Corporation, the shares are sold for capital, and the reward for the shareholders is that their shares are not directly taxed. Also, a person's ownership of stock can extend even past death, which is good since it can be passed to children and ensures its longevity in the hands of investors. Disadvantages include that the company can not sell their stocks to any person/corporation, thus must conforming to IRS regulations.
An LLC lets members essentially set up the style of management they deem best, which gives them primary control over management. Also, there is no tax on shares since income is simply passed within the company. Disadvantages include laws restricting some forms of capital raising, like the selling of all interests, and in certain states, shares may not be perpetual under state law.
Thursday, February 17, 2011
Enron and Arther Anderson
In 2001, Enron was a leading Fortune 500 Company that sold energy and commodities. The company was worth over 100 billion dollars, and seemed to be just another giant and steady corporation. In late 2001 though, Enron filed for bankruptcy, shocking its investors and America. A trial was conducted to search for how this multi-billion dollar company with no signs of failure, could suddenly have lost the entirety of its capital. This is how the investigation into Arther Andersen began. Arther Andersen was a longstanding financial firm, considered to be one of the five biggest in the country, that had recorded the entirety of Enron's transactions. What essentially occured was a mass forgery of accounting documents, where Arther Andersen would falsify their balance.
As an example, the firm of Arther Andersen would overstate the actual assets that the company owned, and thus overstating the company's capital. For Enron, this was undoubtedly attractive since the more capital the company seemed to be bringing in, the more investors it would get. The case of Enron shows how influential accounting is, and more so how powerful it is. Arther Andersen's role in carrying out the falsification of accounting records sheds light on how errors in accounting, whether purposely or not, affect the entire way our economy functions.
http://www.nysscpa.org/cpajournal/2006/1106/infocus/p14.htm
http://www.time.com/time/business/article/0,8599,193520,00.html
As an example, the firm of Arther Andersen would overstate the actual assets that the company owned, and thus overstating the company's capital. For Enron, this was undoubtedly attractive since the more capital the company seemed to be bringing in, the more investors it would get. The case of Enron shows how influential accounting is, and more so how powerful it is. Arther Andersen's role in carrying out the falsification of accounting records sheds light on how errors in accounting, whether purposely or not, affect the entire way our economy functions.
http://www.nysscpa.org/cpajournal/2006/1106/infocus/p14.htm
http://www.time.com/time/business/article/0,8599,193520,00.html
Monday, February 14, 2011
Disclaimer
I am Adam Ziv-el, a student at Nicolet High School. This blog is not intended to be taken as proffesional, but rather as a student learning about Accounting, so my posts may not be completely accurate.
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