Essay Available:
Pages:
2 pages/≈550 words
Sources:
2
Style:
APA
Subject:
Accounting, Finance, SPSS
Type:
Essay
Language:
English (U.S.)
Document:
MS Word
Date:
Total cost:
$ 9.36
Topic:
Peyton Enterprises
Essay Instructions:
Read the seven-page case study Peyton Enterprises, submit answers to the following questions:
1. Comment on Peyton’s recent financial performance.
2. Quantify the impact of the accounting policy, and estimate changes being proposed by McNeilly on FY2015’s earnings relative to the figures that would be reported under Peyton’s existing policies and estimates.
3. Is McNeilly correct in her assumption that “conservative” accounting during the current difficult period will be viewed positively by the market when Peyton goes public a few years down the road?
4. Can you think of any reasons why Peyton might be better served by slightly more aggressive accounting policies in 2015 (e.g., the status quo, including avoiding write-downs), in light of the proposed IPO in 2016 or 2017?
5. When should the restructuring charge be recognized? What are the pros and cons of recognizing the restructuring charge at the time that you propose as compared to recognizing it earlier or later?
6. summarize what we have learned.
Essay Sample Content Preview:
Peyton Enterprises Case Study
Author’s Name
Institution
Course Name
Instructor’s Name
Due Date
Peyton Enterprises Case Study
Comment on Peyton’s Financial Performance
Peyton Enterprises is currently navigating deep financial waters characterized by slackening sales numbers and problems in cost containment. This past year marks the first time the company has posted a quarterly loss in over a decade, suggesting a decline in financial health (Demers & Simko, 2015). Additionally, the problems stem from reduced demand for coal in the coal mining industry, primarily due to a decline in coal-fired power plants, which has substantially influenced Peyton's energy-related revenues. The energy sector might be down, but the life sciences segment is a surprising growth driver for the company to mitigate the overall declining trend.
Quantifying the Impact of the Accounting Policy and Proposed Changes on FY2015 Earnings
The proposed accounting changes suggested by McNeilly would materially affect the earnings in FY 2015. The proposal to increase the allowance for doubtful accounts by 4.5% would increase the provisions and lower net earnings. The inventory policy predictably would be more conservative in its approach-superior in that it would postpone the benefits that would show up in cost savings while ensuring enhancement of supply continuity; the adoption of a five-year useful life using the accelerated method of depreciation for brand new assets causes non-cash depreciation expenses to mount at early years rapidly. These changes together announce a shift toward more conservative acco...
Get the Whole Paper!
Not exactly what you need?
Do you need a custom essay? Order right now: