Refer to the Creative Technology example on delaying write-downs of current assets. How much excess inventory do you estimate Creative Technology is holding in March 2005 if the firm’s optimal days’ Inventory is 100 days? Calculate the inventory impairment charge for Creative Technology if 50 percent of this excess inventory is deemed to be worthless. Record the changes to Creative Technology’s financial statements from adjusting for this impairment.
Answer to relevant QuestionsU.S.-based American International Group Inc. (AIG) is one of the world’s largest insurance companies, offering property-casualty, life insurance, and retirement services to customers in more than 130 countries. In its ...Refer to the Lufthansa example on asset depreciation estimates. What adjustments would be required if Lufthansa’s aircraft depreciation were computed using an average life of 25 years and salvage value of 5% (instead of ...What are the reasons for a firm having lower cash from operations than working capital from operations? What are the possible interpretations of these reasons?What factors are likely to drive a firm’s outlays for new capital (such as plant, property, and equipment) and for working capital (such as receivables and inventory)? What ratios would you use to help generate forecasts ...What types of companies have:a. a high PE ratio and a low market-to-book ratio?b. a high PE ratio and a high market-to-book ratio?c. a low PE ratio and a high market-to-book ratio?d. a low PE ratio and a ...
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