Unit I Essay Example | Topics and Well Written Essays - 1500 words

Unit I - Essay Example It was formed 15 years ago and has had stable growth till the last three years when it started incurring high costs. The company feels that issues like unexpected temperature drops, outbreak of pests and rising labor costs has lead to the increase in costs in recent years. Moreover, the company intends to expand its facilities and so it must address this major issue of employee turnover. In the recent past employee turnover has increased and key personnel are leaving. This is having a broad effect on internal costs. The acts of hiring new employees, training them, enabling them to grow as professionals all incur huge costs. This is evident by the statistics presented which indicate that company growth is stable at 5% but costs have been rising at an average of 2.5-4% in the past 3 years. If this trend continues then ultimately JRT will head towards major financial losses. Such losses can be very heavy for a consumer product company which needs to invest substantially in marketing and advertising. However, losses would mean slashing advertising budgets. Moreover, JRT’s reputation in the industry will be effected which will lower the moral of the existing employees and in turn reduce their productivity. Key personnel turnover can occur if managers feel dissatisfied and do not see opportunities to grow. The most basic problem arises when senior managers feel their productivity is reaching a stage of stagnation. This could be possible if they feel their job is not challenging enough, or perhaps if they consider it monotonous and boring. For this purpose it will also be important to talk to as many people as possible to gauge the nature and extent of the issues involved. Several in depth interviews need to be conducted in order to find the main cause of dissatisfaction at work To get a better hold of the issue we also need to survey and analyze existing financial documents of JRT. This would include

ZipCar Essay Example | Topics and Well Written Essays - 1000 words

ZipCar - Essay Example Based on the case and financial projections, it is clear that main value drivers of ZipCar include its resources (cars), targeting the right customer segments and operating costs. The following analysis has helped in arriving at some key findings, which can be of great help to not only improve the business but also can add weight to the concept to attract investment. The revised financial projections for ZipCar has incorporated changes with respect to subscription fees according to customers’ needs and has increased the per mile charge in comparison with competitors. Considering the business potential and huge investment that is required for ZipCar to function as expected and to expand, it is also important that it minimizes costs wherever possible. One key area that incurs huge costs is obtaining cars on lease. As per the present projections, ZipCar would require $4,400/year to lease one car and would require an average of 50 cars per year and is expecting to increase the num ber of serviceable cars on a yearly basis. This would mean increase in leasing costs. Moreover, there is also an apprehension that car companies might not find this business promising if they have to lease too many cars to one company. The projections reveal between 10% to 25% growth on a yearly basis. The NPV is calculated using three discount rate assumptions (10%, 15%, 20%) based on the projections (see Exhibit i). The growth of the business as shown in revised financial plan does not indicate any uniformity; however the minimum growth rate is at 14%; hence, calculation of NPV with discount rates assumptions below, above and at that point seemed logical in this case. With similar notion, the terminal value of business has been calculated (Exhibit i). These figures indicate that for an investment of $1.3 million to fetch a growth of at least 15% returns, it becomes necessary that the business maintains a steady growth rate at 10% over next 5 years. In order to achieve this, it is also necessary that profitability is increased for which the below described recommendation might of some help. Besides business expansion, profitability can also be increased by minimizing costs. One possible and implementable solution is to minimize costs incurred by leasing out cars, which attracts much of the investment. This can be done by leasing cars from individuals only a monthly basis (rent) rather than yearly basis. Considering risk factor, it would be better that ZipCar takes 30% of its cars from individuals that do not use their cars too often in exchange of money on a monthly basis. While ZipCar can own the responsibility of these cars in case of damage, it can avoid maintenance of 30% of its cars as it already pays rent to the individuals. The fuel expenses will be borne by the customers. By doing so, ZipCar can save costs incurred towards leasing, maintenance, and insurance of 30% of the cars. Changes in financial projection if such model is adopted has been shown in Exhibits ii and iii; the NPV and TV of the firm after incorporating this recommendation is included in Exhibit i. Exhibit i NPV= Net present value DR = Discount Rate TV= Terminal value of investment Exhibit ii. Recommended model: Exhibit iii: Comparison between original, revised and recommended

Challenges in Auditing Literature review Example | Topics and Well Written Essays - 1000 words

Challenges in Auditing - Literature review Example According to Power (1997, cited in Free, Salterio and Shearer, 2009) auditing can be described as both operational and programmatic elements. The programmatic elements relate to the concepts and ideas that make practice and policy objectives that are existent in the political arena. Goals are formulated with the practices for the levels of programs. These levels are defined when audits are required by the regulatory agencies. The operational elements refer to the concrete routines and tasks that are practiced by the practitioners worldwide. Review The global audit regulatory system is dynamic that includes a number of organizations, which compete among them. Such competition is reflected in the range of actions from political lobbying process to policy publication papers and submission of those papers to the committees. During the period of financial crisis, it is hard to find papers that are audited by the large firms, national audit boards and the professional bodies. Another probl em related to the financial crisis is that, the process in which the assurance operation is carried out and enacted (Kornberger, Justesen and Mouritsen, 2011). Audits aims at drawing general conclusion from the studies that are made regarding a topic. Thus, there is lack of potential use of the statistical foundations like sampling, which often gave limited information and provided with incorrect results. The qualitative studies carried out by Humphrey and Moizer (1990, cited in Kornberger, Justesen and Mouritsen, 2011) and Fischer (1996, cited in Kornberger, Justesen and Mouritsen, 2011) has suggested that the practice of the financial audit work is socially constructed. Curtis and Turley (2007, cited in Kornberger, Justesen and Mouritsen, 2011) has argued that there are huge business risk in the audit works. They have documented the problems that are related to the translation of new concepts that are developed by the officers at administrative levels, into the real audit techniqu es at the general practitioner level. The auditing profession is related to good consequences as well as bad crisis. But the auditing profession has responded boldly to the financial crisis by implementing a number of communication modes and interacting with the governmental and regulatory bodies. The clarification is needed for specifying the exact role and the obligations of the auditors. According to Woods (2009, cited in Kornberger, Justesen and Mouritsen, 2011) the companies often face downturn, when their financial statements are not audited properly and thus it threats the future developments of the company. According to Cherry, Johnson and Veron (2008, cited in Humphrey, Loft and Woods, 2009) suggested that auditing practices can overshadow the standard of financial reporting. Thus, greater focus is to be provided to the volatility of the accounting numbers than to audibility of the traditional financial statements. The imbalance between the two is noticed during the fair va lue debate. It has been suggested by Ryan (2008, cited in Humphrey, Loft and Woods, 2009) that the duration of the crisis can be reduced, if the practitioner of the auditing functions are exercising the Financial accounting System appropriately. The auditors seek to develop a firm ability to make a judgment related to the reporting of the fair values. Ryan (2008, cited