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vaieri [72.5K]
3 years ago
8

How might differences in the extent to which countries apply the accounting concept of conservatism (some countries are more con

servative than others) affect profit margins, debt-to-equity ratios, and returns on equity
Business
1 answer:
-BARSIC- [3]3 years ago
6 0

Answer:

Conservatism in Accounting refers to the policy of being more pessimistic than optimistic. This policy believes that future losses should be anticipated over future gains as future losses are more damaging and probable. It is essentially 'Playing Safe' Accounting. This leads to Income and Assets being understated and Expenses and Liabilities being overstated.

Profit Margins.

As the policy allows for the anticipation and recognition of expenses more than gains, Profit margins will be lower in this type of accounting as Revenue will be less but Expenses will be more.

Debt-to-Equity Ratios

Debt to Equity ratios will be higher because this policy calls for a speedier recognition of Liabilities as well. With the formula for Debt to Equity being Debt over Equity, a larger recognition of debt will mean this equation will yield higher figures. Also a component of Equity is Retained Earnings which comes from Net income and as already stated, this will be less under this policy thus decreasing the denominator of this equation as well.

Returns on Equity.

Return on Equity is calculated by dividing the Net Income by Equity. This figure will be smaller but not by much because this policy as already shown will reduce the both the Net income and the Equity but the Net Income will likely suffer a greater hit than Equity.

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At the Blue Restaurants Corporation, an employee survey reports that efforts to increase worker satisfaction by redesigning jobs
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Answer:

lower costs, leading to higher profits

Explanation:

Improving job satisfaction in the workplace results in better productivity. This is because employees get to enjoy what they do rather than feeling forced to work.

When the workplace is conducive it will result in lower rates of absenteeism and employee turnover.

These in turn lead to lower costs and higher profit.

Staff turnover is costly on the business as new hires have to be trained on the job to be effective.

7 0
3 years ago
What are 2004 pennies worth?
SVETLANKA909090 [29]
The answer is $20.40 
3 0
3 years ago
You are the manager of a monopoly that sells a product to two groups of consumers in different parts of the country. Group 1’s e
iVinArrow [24]

Answer:

group 1 Markup  = 0.333

group 2 Markup  = 0.25

group 1 price = $79.98

group 2 price = $75

Explanation:

given data

Group 1 elasticity of demand = -4

Group 2 elasticity of demand = -5

marginal cost =  $60

to find out

optimal markups and prices under third degree price discrimination

solution

we get here Under Markup pricing  that is for group 1 and 2 is

Markup is = \frac{1}{- elasticity - 1}    .....................1

so for group 1 Markup =  \frac{1}{- (-4) - 1}

group 1 Markup  = 0.333

and

for group 2 Markup =  \frac{1}{- (-5) - 1}

group 2 Markup  = 0.25

and

price will be

price = ( 1 + markup) ×  Marginal cost     ...................2

group 1 price = ( 1 + 0.333 ) x 60

group 1 price = $79.98

and

group 2 price = ( 1 + 0.25 ) x 60

group 2 price = $75

5 0
3 years ago
Sales were $500,000. The variable cost of goods sold was $300,000. The variable selling and administrative expenses were $75,000
MA_775_DIABLO [31]

Answer:

$125,000

Explanation:

The sales were $500,000

The variable cost of goods sold is $300,000

The variable selling and administrative expenses were $75,000

The fixed costs were $60,000

Therefore the contribution margin ratio using the variable costing can be calculated as follows

CMR= Sales revenue-Variable cost of good sold-The variable selling and administrative expenses

= $500,000-$300,000-$75,000

= $200,000-$75,000

= $125,000

Hence the contribution margin ratio is $125,000

7 0
3 years ago
Which one of the following businesses would be most difficult to get funding for
kifflom [539]
Hi there,
 
A:Establish could be hard But i wouldn't say the Hardest!
B:product line would be the easiest because there getting $$$ still
C:Now A Brand of new business would be the most costly because No $$ coming in 
D:Well i don't what "is wrong" so not that one!

SO IT IS C A brand of new businesses  <span />
6 0
3 years ago
Read 2 more answers
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