Beyond The Numbers

Beyond the Numbers (BTN) is a special problem section aimed to refine communication, conceptual, analysis, and research skills. It includes many activities helpful in developing an active learning environment.

Reporting in Action

A1 A3 A4

BTN 1-1 Key financial figures for Best Buy's fiscal year ended March 3, 2007, follow.

Required

What is the total amount of assets invested in Best Buy?
What is Best Buy's return on assets? Its assets at February 25, 2006, equal $11,864 (in millions).
How much are total expenses for Best Buy for the year ended March 3, 2007?
Does Best Buy's return on assets seem satisfactory if competitors average an 8.1% return?

Fast Forward

Access Best Buy's financial statements (Form 10-K) for fiscal years ending after March 3, 2007, from its Website (BestBuy.com) or from the SEC Website (www.SEC.gov) and compute its return on assets for those fiscal years. Compare the March 3, 2007, fiscal year-end return on assets to any subsequent years' returns you are able to compute, and interpret the results.

COMPARATIVE ANALYSIS

A1 A3 A4

Check (2b) 3.4%

BTN 1-2

Key comparative figures ($ millions) for both Best Buy and RadioShack follow.

Required

What is the total amount of assets invested in (a) Best Buy and (b) RadioShack?
What is the return on assets for (a) Best Buy and (b) RadioShack? Best Buy's beginning-year assets equal $11,864 (in millions) and RadioShack's beginning-year assets equal $2,205 (in millions).
How much are expenses for (a) Best Buy and (b) RadioShack?
Is return on assets satisfactory for (a) Best Buy and (b) RadioShack? (Assume competitors average an 8.1% return.)
What can you conclude about Best Buy and RadioShack from these computations?

ETHICS CHALLENGE

C4 C5

BTN 1-3 Liz Thorne works in a public accounting firm and hopes to eventually be a partner. The management of Allnet Company invites Thorne to prepare a bid to audit Allnet's financial statements. In discussing the audit fee, Allnet's management suggests a fee range in which the amount depends on the reported profit of Allnet. The higher its profit, the higher will be the audit fee paid to Thorne's firm.

Required

Identify the parties potentially affected by this audit and the fee plan proposed.
What are the ethical factors in this situation? Explain.
Would you recommend that Thorne accept this audit fee arrangement? Why or why not?
Describe some ethical considerations guiding your recommendation.

COMMUNICATING IN PRACTICE

A1 C2

BTN 1-4 Refer to this chapter's opening feature about Life is good.^® Assume that Bert and John Jacobs desire to expand their manufacturing facilities to meet customer demand. They decide to meet with their banker to discuss a loan to allow them to expand.

Required

Prepare a half-page report outlining the information you would request from the Jacobs brothers if you were the loan officer.
Indicate whether the information you request and your loan decision are affected by the form of business organization for Life is good.

TAKING IT TO THE NET

BTN 1-5 Visit the EDGAR database at (www.SEC.gov). Access the Form 10-K report of Rocky Mountain Chocolate Factory (ticker RMCF) filed on May 14, 2007, covering its 2007 fiscal year.

Required

Item 6 of the 10-K report provides comparative financial highlights of RMCF for the years 2004–2007. How would you describe the revenue trend for RMCF over this four-year period?
Has RMCF been profitable (see net income) over this four-year period? Support your answer.

TEAMWORK IN ACTION

BTN 1-6 Teamwork is important in today's business world. Successful teams schedule convenient meetings, maintain regular communications, and cooperate with and support their members. This assignment aims to establish support/learning teams, initiate discussions, and set meeting times.

Required

Form teams and open a team discussion to determine a regular time and place for your team to meet between each scheduled class meeting. Notify your instructor via a memorandum or e-mail message as to when and where your team will hold regularly scheduled meetings.
Develop a list of telephone numbers and/or e-mail addresses of your teammates.

ENTREPRENEURIAL DECISION

A1 A2

Check (2) 10.7%

BTN 1-7 Refer to this chapter's opening feature about Life is good. Assume that Bert and John Jacobs decide to open a new manufacturing facility to produce sunscreen. This new company will be called LifeScreen Manufacturing Company.

Required

LifeScreen Manufacturing obtains a $500,000 loan and the Jacobs brothers contribute $250,000 of their own assets in exchange for common stock in the new company.
1. What is the new company's total amount of liabilities plus equity?
2. What is the new company's total amount of assets?
If the new company earns $80,000 in net income in the first year of operation, compute its return on asset (assume average assets equal $750,000). Assess its performance if competitors average a 10% return.

HITTING THE ROAD

BTN 1-8 You are to interview a local business owner. (This can be a friend or relative.) Opening lines of communication with members of the business community can provide personal benefits of business networking. If you do not know the owner, you should call ahead to introduce yourself and explain your position as a student and your assignment requirements. You should request a thirty minute appointment for a face-to-face or phone interview to discuss the form of organization and operations of the business. Be prepared to make a good impression.

Required

Identify and describe the main operating activities and the form of organization for this business.
Determine and explain why the owner(s) chose this particular form of organization.
Identify any special advantages and/or disadvantages the owner(s) experiences in operating with this form of business organization.

GLOBAL DECISION

A1 A3 A4

BTN 1-9 DSG international plc (www.DSGiplc.com) is the leading European retailer of consumer electronics and competes with both Best Buy and RadioShack. Key financial figures for DSG follow.

Required

Identify any concerns you have in comparing DSG's income and revenue figures to those of Best Buy and RadioShack (in BTN 1-2) for purposes of making business decisions.
Identify any concerns you have in comparing DSG's return on assets ratio to those of Best Buy and RadioShack (computed for BTN 1-2) for purposes of making business decisions.

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Home > Chapter 1 > Beyond The Numbers

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	Course-wide Content
		MH Enhanced Cartridge Study Guide Sample Cha... Working Papers Sample ... Appendices Student ALEKS Glossary Sample of iPod Premium... Video Library Peachtree Problems Appendix C Narrated Sl... Appendix C iPod Content Appendix D Narrated Sl... Appendix D iPod Content Appendix E Narrated Sl... Appendix E iPod Content

	Instructor Resources
		Instructor Resource Ma... Solutions Manual Solutions to Excel
	News, Articles & Links
		Text Company Links
	Quizzes
		Quiz
	More Resources
		Chapter Objectives Chapter Summary Flashcards Glossary PowerPoint Presentations Excel Template Assignm... Topic Tackler Narrated Slides Video Segments iPod Content
	eBook
		Chapter Opener Demonstration Problem Financial Statements Transaction Analysis a... Importance of Accounting Fundamentals of Accoun... Appendix 1A Return and... Appendix 1B Business A... Summary Guidance Answers to De... Guidance Answers to Qu... Key Terms Multiple Choice Quiz Discussion Questions Quick Study Exercises Problem Set A Problem Set B Serial Problem Beyond The Numbers Answers to Multiple Ch...