http://www.financialpost.com/news-sectors/economy/story.html?id=1409580
Summary
During January, there was the biggest rise in sales ever since July 2006, in Canada. This noteworthy rise doesn’t mean the trend will still follow. The population was just stocking up on cheap Christmas goodies, rather than having increased confidence in shopping. Consumers are shopping for their necessities mostly. Food retailers are doing better than the other retailers like clothing. A lot of the businesses have to change their prices and inventories to follow along with the recession. Businesses dealing with auto parts are doing fairly well. As for furniture, home electronics, and buildings, these retailers are having a hard time getting through this economy recession.
Connection
This article relates to both Chapter 11 and Chapter 15. First of all, Chapter 11 is about merchandising businesses. A merchandising business is a business that buys goods and sells them at a profit. In our article, it talks about retailers, which are merchandising businesses, struggling through the recession. Each of these retailers sells merchandise, and the quantity of merchandise on hand is known as merchandise inventory. Due to the poor economy, fewer consumers are spending money, causing the businesses to have a drop in gross profit, and leaving more inventories. Second, this is related to the inventory turnover ratio in Chapter 15. With less cost of goods sold, and more average merchandise inventory, since sales are not going well, the inventory turnovers for companies would be fairly low. With low turnovers, it means that businesses aren’t able to sell and replace its inventories in one year that much.
Reflection
With the fall in the economy, it is understandable that consumers would try to spend less. Nation wide, people are losing jobs, and incomes are disappearing. With less income, there is less money to spend, and then retail sales drop. It is like a cycle. To break this cycle, I think that employers have to stop lying off their employees. If they kept their employees, who are also consumers, then they would have more money to spend. In return, merchandise businesses will not lose sales. Also, I have realized a lot of prices are going up. My mother has been complaining about how expensive the food is now. With increased prices, it is making harder for consumers to purchase products. Hopefully, this recession will end soon.
Thursday, April 2, 2009
Wednesday, March 11, 2009
Jobless claims up 16.2% in year to December
Chapter 16 Blog
Summary
With the economy declining, many jobs are being taken away, leaving many citizens unemployed. In December 2008, the number of Canadians receiving Employment Insurance benefits rose 16.2%, compared to December 2007. There could be more unemployment coming in our future. Most of the jobs lost were full time positions, causing more and more people to rely on Employment Insurance. Even though the percentage seems quite high, “Canada is coming out of a period of near-record-low employment.” (Mr.Shenfeld) This increase of unemployment falls nationwide, with British Columbia ranking first with the most increase of Employment Insurance recipients.
Connection
In the article it talks about how more and more people are claiming their Employment Insurance benefits. Employment Insurance is the connection to Chapter 16. Canadian employees all have to contribute a portion of their earnings towards their Employment Insurance fund. This deduction is made on every paycheque they make. This fund is only available when the person is unemployed. They have to be willing and be able to accept employment, then that person is entitled to receive Employment Insurance benefit. The unemployed person will then receive a bi-weekly payment every month until they have a job again.
Reflection
Even though it’s expected that many jobs will be lost, people will be unemployed through the economic crisis, I never imagined the increase would be so extreme. I’m also glad there is an Employment Insurance fund because if there was never one, and so many are unemployed now, many people will be having really hard times to get through their life. I think the government should work on a project to keep prevent more layoffs, or to provide more job opportunities. It is very hard to find jobs now and people’s fund won’t be able to last them that long unless they have been working for years.
http://www.nationalpost.com/story.html?id=1323500
Summary
With the economy declining, many jobs are being taken away, leaving many citizens unemployed. In December 2008, the number of Canadians receiving Employment Insurance benefits rose 16.2%, compared to December 2007. There could be more unemployment coming in our future. Most of the jobs lost were full time positions, causing more and more people to rely on Employment Insurance. Even though the percentage seems quite high, “Canada is coming out of a period of near-record-low employment.” (Mr.Shenfeld) This increase of unemployment falls nationwide, with British Columbia ranking first with the most increase of Employment Insurance recipients.
Connection
In the article it talks about how more and more people are claiming their Employment Insurance benefits. Employment Insurance is the connection to Chapter 16. Canadian employees all have to contribute a portion of their earnings towards their Employment Insurance fund. This deduction is made on every paycheque they make. This fund is only available when the person is unemployed. They have to be willing and be able to accept employment, then that person is entitled to receive Employment Insurance benefit. The unemployed person will then receive a bi-weekly payment every month until they have a job again.
Reflection
Even though it’s expected that many jobs will be lost, people will be unemployed through the economic crisis, I never imagined the increase would be so extreme. I’m also glad there is an Employment Insurance fund because if there was never one, and so many are unemployed now, many people will be having really hard times to get through their life. I think the government should work on a project to keep prevent more layoffs, or to provide more job opportunities. It is very hard to find jobs now and people’s fund won’t be able to last them that long unless they have been working for years.
http://www.nationalpost.com/story.html?id=1323500
Tuesday, March 3, 2009
Small business owners falling through credit cracks
Summary
Here, in the article, it talks about how our Canadian government is dealing with the loans for many small business entrepreneurs. Many small business owners rely on loans to sustain the company. Now that the world’s economy is plunging, many companies are suffering, and losing their jobs. A situation is shown regarding an entrepreneur, Mr. Abbott, of a logging business. With the economic downturn, Mr. Abbott won’t be receiving much business until summer, meaning he won’t be able to pay his government-backed loan. He asked his bank if he could repay the loan just a few months later, but the government refused.
Connection
This relates to Chapter 15 indirectly. In 15.1, the textbook talks about the people who look use the financial statements, and why. Insiders and outsiders read the financial statement to determine if the business will be able to repay the loan. Two aspects would be looking at their profitability; and their worth and marketability of assets. In the situation in our article, the bank must have looked at Mr. Abbott’s assets before issuing the loan. Now that Mr Abbott will be having trouble to pay back the loan, the bank will have to take his assets, his truck.
Reflection
With the global economy falling, I think that the banks and government should go easier on small business loans. The banks should know with such bad factors now a day, it is definitely hard for small businesses to make a profit. For Mr. Abbott’s case, I think they should have just agreed to let Mr. Abbott pay the interests still, but lay off the actual monthly payments for a few more months. The bank and government has enough money already, so receiving fewer payments wouldn’t affect much. I believe that the government should put some effort into creating a solution for this credit crisis.
http://www.nationalpost.com/news/canada/story.html?id=1343244
Here, in the article, it talks about how our Canadian government is dealing with the loans for many small business entrepreneurs. Many small business owners rely on loans to sustain the company. Now that the world’s economy is plunging, many companies are suffering, and losing their jobs. A situation is shown regarding an entrepreneur, Mr. Abbott, of a logging business. With the economic downturn, Mr. Abbott won’t be receiving much business until summer, meaning he won’t be able to pay his government-backed loan. He asked his bank if he could repay the loan just a few months later, but the government refused.
Connection
This relates to Chapter 15 indirectly. In 15.1, the textbook talks about the people who look use the financial statements, and why. Insiders and outsiders read the financial statement to determine if the business will be able to repay the loan. Two aspects would be looking at their profitability; and their worth and marketability of assets. In the situation in our article, the bank must have looked at Mr. Abbott’s assets before issuing the loan. Now that Mr Abbott will be having trouble to pay back the loan, the bank will have to take his assets, his truck.
Reflection
With the global economy falling, I think that the banks and government should go easier on small business loans. The banks should know with such bad factors now a day, it is definitely hard for small businesses to make a profit. For Mr. Abbott’s case, I think they should have just agreed to let Mr. Abbott pay the interests still, but lay off the actual monthly payments for a few more months. The bank and government has enough money already, so receiving fewer payments wouldn’t affect much. I believe that the government should put some effort into creating a solution for this credit crisis.
http://www.nationalpost.com/news/canada/story.html?id=1343244
Monday, December 8, 2008
Turn in fraudsters, police tell businesses
Summary
Here in the article, it shows that even though there are internal frauds within a business, they don’t report it. Businesses think it’s too much work just reporting in the frauds. If they don’t report it in, it will just reoccur again at another place. Police are warning businesses and hope that the companies will cooperate and report in frauds, or else they won’t be able to stop it. One of the cases within the article deals with a 40 year old woman who cheated at least $300,000 out of her company where she was employed as a manager.
Connection
This relates to Chapter 14 in a way since this chapter does talk about internal controls to prevent fraud. Since the businesses had poor internal control, it gave chances for employees to scam the companies. As stated in the textbook, a good way to internal control is to have two different people to process the work independently, and the work has to agree in the end. Another way is to keep all the assets in a safe place so only authorized people can reach it. Also, it is important for the responsibilities to be clearly established so if anything goes wrong; we can pinpoint who was responsible.
Reflection
I think it is really foolish and silly for the businesses to not report the internal frauds that they have. If a store got robbed, they would immediately call 911, but internal businesses deal with even larger amount of cash stolen, and yet they don’t call 911. Yes, it might be time consuming to file the reports in to the police but then in the end, it could help prevent more similar cases to happen. If the businesses just let things go, they are just letting their own money flow away. Seriously, businesses should spend more time on their internal control and look closely at their cash control.
http://www.canada.com/story.html?id=1023575
Here in the article, it shows that even though there are internal frauds within a business, they don’t report it. Businesses think it’s too much work just reporting in the frauds. If they don’t report it in, it will just reoccur again at another place. Police are warning businesses and hope that the companies will cooperate and report in frauds, or else they won’t be able to stop it. One of the cases within the article deals with a 40 year old woman who cheated at least $300,000 out of her company where she was employed as a manager.
Connection
This relates to Chapter 14 in a way since this chapter does talk about internal controls to prevent fraud. Since the businesses had poor internal control, it gave chances for employees to scam the companies. As stated in the textbook, a good way to internal control is to have two different people to process the work independently, and the work has to agree in the end. Another way is to keep all the assets in a safe place so only authorized people can reach it. Also, it is important for the responsibilities to be clearly established so if anything goes wrong; we can pinpoint who was responsible.
Reflection
I think it is really foolish and silly for the businesses to not report the internal frauds that they have. If a store got robbed, they would immediately call 911, but internal businesses deal with even larger amount of cash stolen, and yet they don’t call 911. Yes, it might be time consuming to file the reports in to the police but then in the end, it could help prevent more similar cases to happen. If the businesses just let things go, they are just letting their own money flow away. Seriously, businesses should spend more time on their internal control and look closely at their cash control.
http://www.canada.com/story.html?id=1023575
Thursday, October 30, 2008
Surviving the Credit Crisis
http://www.financialpost.com/story.html?id=914649&p=2
Summary
This article talks about the many ways to improve liquidity for companies since the Canadian economy hasn’t been too great the past few while. This article teaches how companies can survive the credit crisis. Some things to improve on is to keep track of weekly cash flows. Another important thing is to reduce accounts receivable, and to be able to follow up on it since companies tend to forget to pay their bills. A helpful tip is to offer cash discounts, so you don’t lose your customers while trying to get your payments in earlier.
Connection
Chapter 12 is about synoptic journal, but it also talks about cash discount. “Cash discount is a reduction of the amount of a bill if payment is made on or before the discount date stated on the bill.”[1] This article connects with chapter 12 since it talks about decreasing the credit risk by offering early payment discounts. So, if a business is in a bad state, with a large amount of account receivable, it would really help to have their own terms of sale with the customers to encourage earlier payments, so incoming cash flow increases.
Personal Response
I think that the biggest problem for businesses is that their payment policies are too lenient. Paying within 30 days is normal, but some companies do allow up to 60 days to receive their payments. This can really bring down their cash flow coming in, and without cash, the companies will not survive. I think all the tips in the article are really helpful, and if businesses actually use them, they could have a longer lasting company. The cash discounts is an awesome tip, since not only will you not lose any customers, but you are encouraging customers to pay their bills sooner since I’m sure everyone would love to have discounts.
[1] Accounting 1 – Fifth Edition
Summary
This article talks about the many ways to improve liquidity for companies since the Canadian economy hasn’t been too great the past few while. This article teaches how companies can survive the credit crisis. Some things to improve on is to keep track of weekly cash flows. Another important thing is to reduce accounts receivable, and to be able to follow up on it since companies tend to forget to pay their bills. A helpful tip is to offer cash discounts, so you don’t lose your customers while trying to get your payments in earlier.
Connection
Chapter 12 is about synoptic journal, but it also talks about cash discount. “Cash discount is a reduction of the amount of a bill if payment is made on or before the discount date stated on the bill.”[1] This article connects with chapter 12 since it talks about decreasing the credit risk by offering early payment discounts. So, if a business is in a bad state, with a large amount of account receivable, it would really help to have their own terms of sale with the customers to encourage earlier payments, so incoming cash flow increases.
Personal Response
I think that the biggest problem for businesses is that their payment policies are too lenient. Paying within 30 days is normal, but some companies do allow up to 60 days to receive their payments. This can really bring down their cash flow coming in, and without cash, the companies will not survive. I think all the tips in the article are really helpful, and if businesses actually use them, they could have a longer lasting company. The cash discounts is an awesome tip, since not only will you not lose any customers, but you are encouraging customers to pay their bills sooner since I’m sure everyone would love to have discounts.
[1] Accounting 1 – Fifth Edition
Wednesday, October 8, 2008
Hands off the cookie jar, or pay
Summary
This article goes on to talk about employee stealing from their own employers. A study taken in 2004 actually proved that 79% of employees have stolen or have thought about stealing from employers. The article also talked about a case of a Safeway employee theft. The company had to install more security cameras to finally catch the thief in action. In just one year, Canadian employers lost about $120 billion just for employee theft. Employee theft is a big problem, as said in the article, about 30% of business collapses due to this.
Connection
In the article, Safeway, they had started to notice shortages in their inventory. This relates to our chapter, which talks about physical inventory, a procedure to count and value the unsold merchandises. This article goes to show that having a physical count of inventory is very important. Also, this relates to the chapter since the chapter talks about cost of goods sold. If items are stolen, or broken, it is considered as cost of goods sold. This means for Safeway, all the amount of merchandise stolen would be considered as COGS, and their gross profit and net income would be lower.
Personal Reflection
I always imagined it would be customers that do the stealing, and I never would have thought that such a high percent of employees would steal. I think that companies should have higher security, by installing more security cameras, or set up store alarms. For example, the store I currently am working at, has no alarm, so if somebody steals and run out of the store, no one would have known. On the other hand, if someone stole from Zellers or any clothing stores, the alarm would start ringing once they walk out the store, and attention would be brought upon them. Even though it will be a large expense, security is something worth investing in.
http://www.canada.com/story.html?id=702695
This article goes on to talk about employee stealing from their own employers. A study taken in 2004 actually proved that 79% of employees have stolen or have thought about stealing from employers. The article also talked about a case of a Safeway employee theft. The company had to install more security cameras to finally catch the thief in action. In just one year, Canadian employers lost about $120 billion just for employee theft. Employee theft is a big problem, as said in the article, about 30% of business collapses due to this.
Connection
In the article, Safeway, they had started to notice shortages in their inventory. This relates to our chapter, which talks about physical inventory, a procedure to count and value the unsold merchandises. This article goes to show that having a physical count of inventory is very important. Also, this relates to the chapter since the chapter talks about cost of goods sold. If items are stolen, or broken, it is considered as cost of goods sold. This means for Safeway, all the amount of merchandise stolen would be considered as COGS, and their gross profit and net income would be lower.
Personal Reflection
I always imagined it would be customers that do the stealing, and I never would have thought that such a high percent of employees would steal. I think that companies should have higher security, by installing more security cameras, or set up store alarms. For example, the store I currently am working at, has no alarm, so if somebody steals and run out of the store, no one would have known. On the other hand, if someone stole from Zellers or any clothing stores, the alarm would start ringing once they walk out the store, and attention would be brought upon them. Even though it will be a large expense, security is something worth investing in.
http://www.canada.com/story.html?id=702695
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