EU Sets Bad Bank Guidelines, Mulls New Risk Watchdog – Economy …
The European Commission suggests a deadline of the end of 2008, which would not cover many banks’ existing writedowns. The program aims to cover asset-backed securities, such as investments based on U.S. subprime housing loans. … read more…
TALF: A bailout if one reads the the fine print – Credit Writedowns
The Federal Reserve established the TALF (Term Asset-Backed Loan Facility Programme) to help provide liquidity to the asset-baked securities market — you know, the market with all those toxic CDOs, MBSs, and the like. … read more…
Have you read it before you judge the $ plan? « cbishop.cn
A Bold Expansion Up to $1 Trillion: This joint initiative with the Federal Reserve builds off, broadens and expands the resources of the previously announced but not yet implemented Term Asset-Backed Securities Loan Facility (TALF). … read more…
From Google Blog Search
Are You Beginning Real Estate Investing? Check This…
The real estate markets started moving up after equity markets have rallied; normally real estate market has a laggard effect to the equity markets. We have also observed a similar pattern that invest… read more…
Presidential Homeowner Bailout
The effects of the bail out strategy may finally filter down to American homeowners. President Obama’s recent conference in Phoenix outlined a plan for providing relief to millions of people facing a … read more…
Why can’t IT be used to uncreated them?
Since the politicians began discussing securitized mortgages, credit default swaps, and financial instruments so complex that even their investors didn’t understand them, I have been wondering what th… read more…
From GoArticles.com
BNY Mellon to Axe 4% of Jobs as Profits Fall
Bank of New York Mellon Corp., the world’s largest custodian of financial assets, plans to cut 4 percent of its workforce, or 1,800 people, as record declines in global securities markets hurt profits.
Layoffs at the New York-based company, which employs more than 43,000 people, were announced in a statement this week. Reductions by business units and regions have yet to be determined.
BNY Mellon’s third-quarter profit fell 53 percent, after it propped up 10 money funds that owned debt issued by the bankrupt Lehman Brothers. Its investment assets declined 4.1 percent to $1.07 trillion last quarter, and custody assets fell 2.6 percent to $22.4 trillion.
As a custody bank, BNY Mellon provides record-keeping and administrative services to clients such as mutual funds and pension plans. They earn more when markets are active or volatile and their fees are linked to the asset levels overseen for customers. BNY Mellon is one of two clearing banks that enable the purchase and sale of US Treasuries.
Open Question: Accounting help !!!!!!!!!!!?
Billy Bob Incorporated has a line of credit from the Down South National Bank that is due to be renewed on February 1. The bank has requested the company’s current Income Statement and Balance Sheet that appear below.
Billy Bob Incorporated
Income Statement
Year Ended December 31
(in thousands)
Revenue:
Sales
$60,000
Other
4,500
Total revenue
64,500
Expenses:
Cost of goods sold
40,500
Selling and administrative
11,625
Depreciation and amortization
1,875
Interest
1,500
Total expenses
55,500
Income before income taxes
9,000
Income taxes
3,600
Net income
5,400
Less: Dividends to common shareholders ($3.86 per share)
2,550
Net income added to retained earnings
2,850
Retained earnings, beginning of year
8,550
Retained earnings, end of year
$11,400
Earnings per share
$8.18
Billy Bob Incorporated
Balance Sheet
As of December 31
(in thousands)
This Year
Last Year
Assets
Current assets:
Cash and marketable securities
$ 1,950
$ 1,575
Accounts receivable, net
3,600
3,750
Inventories
4,875
4,650
Prepaid items
375
225
Total current assets
10,800
10,200
Noncurrent assets:
Investments, at cost
7,950
7,950
Deposits
750
600
Property, plant, and equipment
21,000
19,500
Total assets
$40,500
$38,250
Liabilities and Shareholders’ Equity
Current liabilities:
Short-term loans
$ 1,650
$ 1,800
Accounts payable
5,400
5,325
Salaries and wages payable
1,950
2,025
Total current liabilities
9,000
9,150
Long-term debt
12,000
12,825
Total liabilities
21,000
21,975
Shareholders’ equity:
Common stock, at par
3,300
3,150
Paid-in capital in excess of par
4,800
4,575
Total paid-in capital
8,100
7,725
Retained earnings
11,400
8,550
Total shareholders’ equity
19,500
16,275
Total liabilities and shareholders’ equity
$40,500
$38,250
The bank has also requested that Billy Bob calculate a number of financial ratios. Billy Bob’s financial ratios have not yet been calculated for this year, but the company’s accounting staff has gathered the following industry averages for the ratios from various sources.
Industry Averages
Return on total assets……………………………….
6.4%
Return on common shareholders’ equity……………………………….
12.5%
Current ratio………………………………..
1.86:1
Acid-test (quick) ratio………………………………..
0.85:1
Debt-to-equity ratio………………………………..
1.23:1
Times interest earned ratio………………………………..
7.78:1
Dividend payout ratio………………………………..
39.6%
______________________________________…
Question
Use formulas referencing the cells in the IS and BS that you already prepared
[Suggestion] Figure out the correct answer using a calculator FIRST and then make sure this number matches your “formulated” number
By comparing the ratios calculated in Requirement 2 with the industry ratios, evaluate Billy Bob’s operations.
Open Question: Accounting help 10 pts!!!!!!!!?
Billy Bob Incorporated has a line of credit from the Down South National Bank that is due to be renewed on February 1. The bank has requested the company’s current Income Statement and Balance Sheet that appear below.
Billy Bob Incorporated
Income Statement
Year Ended December 31
(in thousands)
Revenue:
Sales
$60,000
Other
4,500
Total revenue
64,500
Expenses:
Cost of goods sold
40,500
Selling and administrative
11,625
Depreciation and amortization
1,875
Interest
1,500
Total expenses
55,500
Income before income taxes
9,000
Income taxes
3,600
Net income
5,400
Less: Dividends to common shareholders ($3.86 per share)
2,550
Net income added to retained earnings
2,850
Retained earnings, beginning of year
8,550
Retained earnings, end of year
$11,400
Earnings per share
$8.18
Billy Bob Incorporated
Balance Sheet
As of December 31
(in thousands)
This Year
Last Year
Assets
Current assets:
Cash and marketable securities
$ 1,950
$ 1,575
Accounts receivable, net
3,600
3,750
Inventories
4,875
4,650
Prepaid items
375
225
Total current assets
10,800
10,200
Noncurrent assets:
Investments, at cost
7,950
7,950
Deposits
750
600
Property, plant, and equipment
21,000
19,500
Total assets
$40,500
$38,250
Liabilities and Shareholders’ Equity
Current liabilities:
Short-term loans
$ 1,650
$ 1,800
Accounts payable
5,400
5,325
Salaries and wages payable
1,950
2,025
Total current liabilities
9,000
9,150
Long-term debt
12,000
12,825
Total liabilities
21,000
21,975
Shareholders’ equity:
Common stock, at par
3,300
3,150
Paid-in capital in excess of par
4,800
4,575
Total paid-in capital
8,100
7,725
Retained earnings
11,400
8,550
Total shareholders’ equity
19,500
16,275
Total liabilities and shareholders’ equity
$40,500
$38,250
The bank has also requested that Billy Bob calculate a number of financial ratios. Billy Bob’s financial ratios have not yet been calculated for this year, but the company’s accounting staff has gathered the following industry averages for the ratios from various sources.
Industry Averages
Return on total assets……………………………….
6.4%
Return on common shareholders’ equity……………………………….
12.5%
Current ratio………………………………..
1.86:1
Acid-test (quick) ratio………………………………..
0.85:1
Debt-to-equity ratio………………………………..
1.23:1
Times interest earned ratio………………………………..
7.78:1
Dividend payout ratio………………………………..
39.6%
______________________________________…
Question
Calculate via formula the following financial ratios for this year for Billy Bob
1. Return on total assets.
2. Return on common stockholders’ equity.
3. Current ratio.
4. Acid-test (quick) ratio.
5. Debt-to-equity ratio.
6. Times interest earned.
7. Dividend payout ratio.
answers as much you can
Open Question: Accoutning help 10 pts!!!!!!!!?
Billy Bob Incorporated has a line of credit from the Down South National Bank that is due to be renewed on February 1. The bank has requested the company’s current Income Statement and Balance Sheet that appear below.
Billy Bob Incorporated
Income Statement
Year Ended December 31
(in thousands)
Revenue:
Sales
$60,000
Other
4,500
Total revenue
64,500
Expenses:
Cost of goods sold
40,500
Selling and administrative
11,625
Depreciation and amortization
1,875
Interest
1,500
Total expenses
55,500
Income before income taxes
9,000
Income taxes
3,600
Net income
5,400
Less: Dividends to common shareholders ($3.86 per share)
2,550
Net income added to retained earnings
2,850
Retained earnings, beginning of year
8,550
Retained earnings, end of year
$11,400
Earnings per share
$8.18
Billy Bob Incorporated
Balance Sheet
As of December 31
(in thousands)
This Year
Last Year
Assets
Current assets:
Cash and marketable securities
$ 1,950
$ 1,575
Accounts receivable, net
3,600
3,750
Inventories
4,875
4,650
Prepaid items
375
225
Total current assets
10,800
10,200
Noncurrent assets:
Investments, at cost
7,950
7,950
Deposits
750
600
Property, plant, and equipment
21,000
19,500
Total assets
$40,500
$38,250
Liabilities and Shareholders’ Equity
Current liabilities:
Short-term loans
$ 1,650
$ 1,800
Accounts payable
5,400
5,325
Salaries and wages payable
1,950
2,025
Total current liabilities
9,000
9,150
Long-term debt
12,000
12,825
Total liabilities
21,000
21,975
Shareholders’ equity:
Common stock, at par
3,300
3,150
Paid-in capital in excess of par
4,800
4,575
Total paid-in capital
8,100
7,725
Retained earnings
11,400
8,550
Total shareholders’ equity
19,500
16,275
Total liabilities and shareholders’ equity
$40,500
$38,250
The bank has also requested that Billy Bob calculate a number of financial ratios. Billy Bob’s financial ratios have not yet been calculated for this year, but the company’s accounting staff has gathered the following industry averages for the ratios from various sources.
Industry Averages
Return on total assets……………………………….
6.4%
Return on common shareholders’ equity……………………………….
12.5%
Current ratio………………………………..
1.86:1
Acid-test (quick) ratio………………………………..
0.85:1
Debt-to-equity ratio………………………………..
1.23:1
Times interest earned ratio………………………………..
7.78:1
Dividend payout ratio………………………………..
39.6%
______________________________________…
Question
Use formulas referencing the cells in the IS and BS that you already prepared
[Suggestion] Figure out the correct answer using a calculator FIRST and then make sure this number matches your “formulated” number
By comparing the ratios calculated in Requirement 2 with the industry ratios, evaluate Billy Bob’s operations.
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”The Euro – Are There Any Hard Currencies Left?” by Axel Merk, FSU Editorial 02/24/2009
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@pjwilk Yeah, I 100% agree on tagging all sorts of asset backed securities. Mutual fund voting would be good, too. All handy stuff.
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TIPS Can Help Improve the Fiscal Situation
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