2. By recognizing rentals as equipment sales in the current period, does this increase or decrease Xerox’s sales revenue in the future period?
Since such creative accounting is basically moving up future revenue boost current revenue, Xerox’s revenue in future periods is expected to decrease. If dealt properly, Xerox would have recorded revenue by $10 each month However, if Xerox records it
2. By recognizing rentals as equipment sales in the current period, does this increase or decrease Xerox’s sales revenue in the future period?
Since such creative accounting is basically moving up future revenue boost current revenue, Xerox’s revenue in future periods is expected to decrease. If dealt properly, Xerox would have recorded revenue by $10 each month However, if Xerox records it
Current liabilities
= Quick assets / Current liabilities
Year 2009 2008 2007
ratio 0.99 1.04 1.12
Quick ratio of Hyundai also slightly decreased as we can see right above. In conclusion, liquidity ratios consist of current ratio and quick ratio is gradually decreased so they need to raise liquidity little bit.
(3) Account receivable turnover
Account receivable turnover = Net credit s
account receivable is lager, then cash ratio is volatile. So it often cannot show anything.
1.2. Current Ratio
The current ratio measures the cushion of working capital that companies manintain to allow for the inevitalble unevenness in the flow of funds through the working capital accounts. It measures the relationship between total current assets and total current liabilities.
It
Problem of Eurozone
Lack of control in Eurozone countries
Budget deficit should under the
3% of GDP
Public debt of government should below
60% of GDP
Italy, Greece, Spain
Common Problem
▶Budget deficit
▶Currentaccount deficit
▶Underground economy
corruption, tax evasion, Mafia