Article: http://www.financialpost.com/Rogers+shares+earnings+miss/3727012/story.html
Summary:
According to Rogers Communications Inc.’s recent third quarter results, their shares fell more than 7% and a drop of 24% in profit. Not only had their shares dropped, they also missed the analysts’ expectations by $60-million. Although Rogers had increases in its adjusted operating profit from its cable operations and media lines, this increase was offset by a 3% decline in wireless. The slight decline in wireless network margins is a result of the significant increase in smartphone activations and upgrades. With the recent acquisition of some of the advanced phones in the mobile market, Rogers cost of equipment sales rose 25% and its marketing and sales expenses rose 13%. Due to the recent large upgrade cycle for iPhone customers, Rogers did not adjust their guidance figures because the iPhone 4 launch heavily weighed on margins. Even though there was a modest decline in wireless network margin, Rogers still managed to distribute significant amount of dividend and share buy backs.
Connection:
Rogers recent massive upgrade and activation of new mobiles heavily impacted the figures on their financial statements, especially the income statement which deals with revenue and expenses in particular. The upgrades and activations caused various expense accounts to increase, which includes the cost of goods sold (cost of equipment sales) and marketing expense. However, the inflated expenses also brought in more revenue as there are high demands for these newly anticipated mobiles. In addition, amortization expense also plays a role in this upgrade cycle. As updated mobiles pour into the inventory, the older versions must be depreciated to a reasonable value to attract consumers and make room for the new mobiles. Despite the increase in revenue, the wireless network profit margin ratio declined 3% from the previous year because the sudden upgrades and activations were overwhelming in comparison to the revenue generated. Aside from the income statement, the balance sheet is also affected by the return of dividend and share buybacks. After a series of voting by the board of directors and an official date of declaration is set, the dividends figure becomes a liability on the balance sheet under the dividends declared account to satisfy GAAP. Also, a decrease in retained earnings is followed in order to keep the accounting equation balanced.
Reflection:
I'm optimistic toward Rogers' upcoming fourth quarter results. I believe that the insubstantial decline in the wireless network margin is merely a result of the abrupt upgrades and activations of the new mobiles. The overwhelming expenses utilized to upgrade mobiles and to market the new mobiles is most accountable for the decline in margin. This is like renovating a restaurant and upgrading the quality and variety of the food to inflate the prices on the menu. Although there may not be any profit during the beginning stages after the upgrade because the revenue generated is insufficient to offset the upgrade expneses. However, in the long run, the revenue will eventually cover the upgrade expenses and therefore, increase the profit margin. Same concept applies to Rogers recent upgrades and activations, the profit margin will ultimately increase in the long run. Not to mention, the holiday season is fast approaching which will inflate the sales of mobiles.
Comment link:
Thursday, November 4, 2010
Monday, September 20, 2010
Target plots 200-store push into Canada
Target plots 200-store push into Canada
Summary:
Target Corp. recently discussed the possibility of opening up to 200 stores in the Canadian market at a Toronto shopping centre trade show. Trailing behind Wal-Mart as the second-largest mass merchant in the USA, Target is looking to open six to 10 stores in late 2014 or 2015. This is the first time ever representatives from Target attended the trade show which is an huge indication of Target's intention to invest in Canada. To start off, Target is looking for an urban strategy beginning with the Greater Toronto Area. According to Amy Reilly, a Target spokeswoman, Target is “exploring opportunities in Canada,” and they “are optimistic that [their] first stores could open by mid-decade.” Despite the opening of a couple of hundred units which could potentially change retail in Canada, Canadian retailers have been consistently outperforming the U.S. counterparts since the recession ended without the notice of U.S. retailers.
Connection:
Target’s optimistic intention to seek opportunities in the Canadian retail market is closely associated with the investing activities. According to the investing activities in Chapter 1, Target must acquire things that will enable it to carry out the activities for which it was created. Target's intended expansion is considered as an investment because revenue will be generated after the purchase of properties and the sale of products exactly like the operating Target retails in USA. Also, Target must include financial statements as it is a public traded corporation to illustrate that they're capable of expanding its retail over the border. By informing Target's investors or potential investors of their strong financial position, Target could potentially cause an increase in its share value. On the other hand, if Target have insufficient cash flow based on the cash flow statements, it can analyze its balance of assets and liabilities through the balance sheet to request a mortgage. Another option to increase the cash flow would be issuing more shares. Although the financial statements can aid the internal users in making a decision and analyze their capabilities, it cannot predict the profitability of an investment.
Reflection:
With the semi-dominance of Target in the United States, it is an easy task to open another 200 stores in Canada. However, the retail market in Canada may be different than those in the states. Although statistics have shown that retailers in Canada are in fact outperforming those in the states since the recession, the same thing may not apply to the future Target stores. Despite the usefulness of financial statements, it will not aid Target's management team in predicting the future revenue and the success of Target. Target must find a way to offset its expenses of opening stores by attracting customers from other retails through either price or quality. Target could also analyze and compare how other successful Canadian retails, such as Wal-mart, run their business. Also, with the opening of approximately 300 stores in the next decade, the prices of products may well fluctuate and potentially eliminate the minor retailers in Canada due to the increase of competition in the retail market.
Comment Link: Ryan's blog
Summary:
Target Corp. recently discussed the possibility of opening up to 200 stores in the Canadian market at a Toronto shopping centre trade show. Trailing behind Wal-Mart as the second-largest mass merchant in the USA, Target is looking to open six to 10 stores in late 2014 or 2015. This is the first time ever representatives from Target attended the trade show which is an huge indication of Target's intention to invest in Canada. To start off, Target is looking for an urban strategy beginning with the Greater Toronto Area. According to Amy Reilly, a Target spokeswoman, Target is “exploring opportunities in Canada,” and they “are optimistic that [their] first stores could open by mid-decade.” Despite the opening of a couple of hundred units which could potentially change retail in Canada, Canadian retailers have been consistently outperforming the U.S. counterparts since the recession ended without the notice of U.S. retailers.
Connection:
Target’s optimistic intention to seek opportunities in the Canadian retail market is closely associated with the investing activities. According to the investing activities in Chapter 1, Target must acquire things that will enable it to carry out the activities for which it was created. Target's intended expansion is considered as an investment because revenue will be generated after the purchase of properties and the sale of products exactly like the operating Target retails in USA. Also, Target must include financial statements as it is a public traded corporation to illustrate that they're capable of expanding its retail over the border. By informing Target's investors or potential investors of their strong financial position, Target could potentially cause an increase in its share value. On the other hand, if Target have insufficient cash flow based on the cash flow statements, it can analyze its balance of assets and liabilities through the balance sheet to request a mortgage. Another option to increase the cash flow would be issuing more shares. Although the financial statements can aid the internal users in making a decision and analyze their capabilities, it cannot predict the profitability of an investment.
Reflection:
With the semi-dominance of Target in the United States, it is an easy task to open another 200 stores in Canada. However, the retail market in Canada may be different than those in the states. Although statistics have shown that retailers in Canada are in fact outperforming those in the states since the recession, the same thing may not apply to the future Target stores. Despite the usefulness of financial statements, it will not aid Target's management team in predicting the future revenue and the success of Target. Target must find a way to offset its expenses of opening stores by attracting customers from other retails through either price or quality. Target could also analyze and compare how other successful Canadian retails, such as Wal-mart, run their business. Also, with the opening of approximately 300 stores in the next decade, the prices of products may well fluctuate and potentially eliminate the minor retailers in Canada due to the increase of competition in the retail market.
Comment Link: Ryan's blog
Friday, April 30, 2010
B.C. has lowest minimum wage in Canada
http://www.cbc.ca/canada/british-columbia/story/2009/09/01/bc-lowest-minimum-wage.html
http://www.policynote.ca/bcs-minimum-wage-is-now-22-lower-than-ontarios/
Summary:
When New Brunswick officially raised its minimum wage to $8.25 an hour, British Columbia has claimed the honour to be the province with the lowest minimum wage in Canada. Not to mention British Columbia is one of the 3 provinces in Canada that pays training wages to first-time employees. Approximately 60,000 people in B.C. earned $8 per hour last year and nearly 300,000 people earned less than $10 per hour, which is below the poverty line. When compared to Ontario’s minimum wage, B.C.’s $8 minimum is 22% lower than Ontario’s, which means B.C.’s workers are earning one fifth less than the workers of Ontario. Despite the effort contributed by many people such as the B.C. Federation of Labour, the NDPs and many more to raise the minimum wage to a reasonable price, they were all turned down by the government. Ever since Premier Gordon Campbell and the Liberal government took over, they have frozen the minimum wage for about 9 years, the longest wage freeze in Canada followed by a two year freeze by Nunavut. The only excuse they had was that the raising of minimum wage will hurt the businesses and will reduce job opportunities for the young people and contrarily, Premier Gordon Campbell doubled his own salary over the 8 year wage freeze.
Connection:
British Columbia’s minimum wage connects to Chapter 16.1 where it talks about wages. By definition, wages are payments to workers for their labour, on an hourly, daily, or weekly basis, or by the piece. Based on the numbers of workers paid by wages from the article, we can assume that a major population of BC workers are paid by wages. Minimum wage is set as a standard for employers to pay its employees. Since the economy changes over time as a result of inflation and many other factors, minimum wage have to be adjusted to a reasonable amount to ensure that workers are able to afford basic necessities such as shelter and food. Although this may be beneficial for many workers in BC, it could cause problems for the accountants working with payroll expenses. Accountants and accounting softwares would have to adapt to the changes. New software updates must be made and would have to spend some time adapting to new tax deduction figures.
Reflection:
With British Columbia being one of the most expensive provinces to live in Canada, I believe that the minimum wage should be increased. Although the increase of minimum wage will cause an increase in a business’s payroll expenses, it will not dramatically affect the business’s performance. However, considering that the businesses in all the other provinces in Canada did not cause many problems, the businesses in B.C. should not have problems with the increase in minimum wage. Ontario is an excellent example of a prosperous province similar to B.C, but with a difference of $2.25 (22% more) in minimum wage. B.C is well known for the most expensive housing prices in Canada and yet it has the lowest minimum wage across Canada. How does the government expect B.C. citizens especially immigrants to afford a shelter, one of the basic needs, while working for $8 an hour? As a future part-time job worker, I strongly believe the minimum wage of B.C. should be increased.
Comment: Dickson's Blog
http://www.policynote.ca/bcs-minimum-wage-is-now-22-lower-than-ontarios/
Summary:
When New Brunswick officially raised its minimum wage to $8.25 an hour, British Columbia has claimed the honour to be the province with the lowest minimum wage in Canada. Not to mention British Columbia is one of the 3 provinces in Canada that pays training wages to first-time employees. Approximately 60,000 people in B.C. earned $8 per hour last year and nearly 300,000 people earned less than $10 per hour, which is below the poverty line. When compared to Ontario’s minimum wage, B.C.’s $8 minimum is 22% lower than Ontario’s, which means B.C.’s workers are earning one fifth less than the workers of Ontario. Despite the effort contributed by many people such as the B.C. Federation of Labour, the NDPs and many more to raise the minimum wage to a reasonable price, they were all turned down by the government. Ever since Premier Gordon Campbell and the Liberal government took over, they have frozen the minimum wage for about 9 years, the longest wage freeze in Canada followed by a two year freeze by Nunavut. The only excuse they had was that the raising of minimum wage will hurt the businesses and will reduce job opportunities for the young people and contrarily, Premier Gordon Campbell doubled his own salary over the 8 year wage freeze.
Connection:
British Columbia’s minimum wage connects to Chapter 16.1 where it talks about wages. By definition, wages are payments to workers for their labour, on an hourly, daily, or weekly basis, or by the piece. Based on the numbers of workers paid by wages from the article, we can assume that a major population of BC workers are paid by wages. Minimum wage is set as a standard for employers to pay its employees. Since the economy changes over time as a result of inflation and many other factors, minimum wage have to be adjusted to a reasonable amount to ensure that workers are able to afford basic necessities such as shelter and food. Although this may be beneficial for many workers in BC, it could cause problems for the accountants working with payroll expenses. Accountants and accounting softwares would have to adapt to the changes. New software updates must be made and would have to spend some time adapting to new tax deduction figures.
Reflection:
With British Columbia being one of the most expensive provinces to live in Canada, I believe that the minimum wage should be increased. Although the increase of minimum wage will cause an increase in a business’s payroll expenses, it will not dramatically affect the business’s performance. However, considering that the businesses in all the other provinces in Canada did not cause many problems, the businesses in B.C. should not have problems with the increase in minimum wage. Ontario is an excellent example of a prosperous province similar to B.C, but with a difference of $2.25 (22% more) in minimum wage. B.C is well known for the most expensive housing prices in Canada and yet it has the lowest minimum wage across Canada. How does the government expect B.C. citizens especially immigrants to afford a shelter, one of the basic needs, while working for $8 an hour? As a future part-time job worker, I strongly believe the minimum wage of B.C. should be increased.
Comment: Dickson's Blog
Monday, April 12, 2010
Canadian Tire goes back to future
http://www.thestar.com/business/article/791930--canadian-tire-goes-back-to-future
Summary:
Canadian Tire decided to return its focus in the automotive parts and services. They have devised a three-to-five year strategic plan by sharply focusing on its automotive segment and core retail. By doing so, Canadian Tire may boost its shareholders’ return on equity through drenching more profit and sales from its current 479 stores and the impending 11 new stores this year. Canadian Tire aims to increase 3%-5% in sales, 8%-10% in profit and 10%-12% in return on equity to shareholders. Along with the new stores, Canadian Tire has arranged a deal with the province to open its first 23 Canadian Tire gas stations on the 400 series of provincial highways. Also, Canadian Tire is currently reformatting its store layouts which will increase the storage space and make it more efficient for its customer’s to shop. With all these changes taking place, Canadian Tire stated that it can achieve its targets without further increasing its capital expenditures.
Connection:
This article ties in closely with the simple small ratios in chapter 15.3 and to be more precise, the rate of return on equity and the rate of return on net sales. The actions taken by Canadian Tire all share the common focus, to increase the rate of return on net sales and the rate of return on owner’s equity. By increasing the sales, profit and the return on equity to shareholders, Canadian Tire can automatically increase the rate of return on net sales and owner’s equity. Since these two ratios are vital to the outsiders when it comes to analyzing a company’s financial health, Canadian Tire must maintain and increase these ratios in order to impress the outsiders.
Reflection:
From my perspective, I believe Canadian Tire is taking the correct actions by putting its customers and investors as its priority. If I was an investor and I was told that Canadian Tire will increase its rate of return on equity to shareholders, I would be interested to invest into Canadian Tire because there’s a high chance of dividend. The increase of the two ratios can also raise the value of the stock as it can prove to the outsiders that the company is performing well. I strongly believe that Canadian Tire will have an optimistic future if it can achieve its goals.
Summary:
Canadian Tire decided to return its focus in the automotive parts and services. They have devised a three-to-five year strategic plan by sharply focusing on its automotive segment and core retail. By doing so, Canadian Tire may boost its shareholders’ return on equity through drenching more profit and sales from its current 479 stores and the impending 11 new stores this year. Canadian Tire aims to increase 3%-5% in sales, 8%-10% in profit and 10%-12% in return on equity to shareholders. Along with the new stores, Canadian Tire has arranged a deal with the province to open its first 23 Canadian Tire gas stations on the 400 series of provincial highways. Also, Canadian Tire is currently reformatting its store layouts which will increase the storage space and make it more efficient for its customer’s to shop. With all these changes taking place, Canadian Tire stated that it can achieve its targets without further increasing its capital expenditures.
Connection:
This article ties in closely with the simple small ratios in chapter 15.3 and to be more precise, the rate of return on equity and the rate of return on net sales. The actions taken by Canadian Tire all share the common focus, to increase the rate of return on net sales and the rate of return on owner’s equity. By increasing the sales, profit and the return on equity to shareholders, Canadian Tire can automatically increase the rate of return on net sales and owner’s equity. Since these two ratios are vital to the outsiders when it comes to analyzing a company’s financial health, Canadian Tire must maintain and increase these ratios in order to impress the outsiders.
Reflection:
From my perspective, I believe Canadian Tire is taking the correct actions by putting its customers and investors as its priority. If I was an investor and I was told that Canadian Tire will increase its rate of return on equity to shareholders, I would be interested to invest into Canadian Tire because there’s a high chance of dividend. The increase of the two ratios can also raise the value of the stock as it can prove to the outsiders that the company is performing well. I strongly believe that Canadian Tire will have an optimistic future if it can achieve its goals.
Monday, March 29, 2010
Accused killer racked up debt using dead wife's credit
Summary:
After precise investigations regarding the death of Charles Kembo’s wife Margaret Kembo, daughter, and a friend, Charles Kembo is charged with first degree murder. His motive was believed to assume the victim’s identities for financial gains. According to his wife’s chartered accountant Rosanne Terhart, Margaret owned $43 000 in credit card debt when she vanished in 2002. The substantial debt was distributed over five different credit cards. By the end of 2003, another five credit cards were created under Margaret’s name and resulted in a total balance of $160 000. Furthermore, several fraudulent cheques were issued and deposited after the credit card limits were reached. Charles Kembo spent the fortune to portray himself as a rich, successful businessman along with an expensive car.
Connection:
This article contradicts the numerous advantages and benefits of credit cards as stated in Chapter 14.2. The book strictly focuses on the benefits and the convenience credit cards can provide its owners rather than the various dangers behind the possession of a credit card. All it takes is several pieces of personal information for others to secretly withdraw money from one’s bank account without one’s notice. Not to mention, many credit cards only require a personal pin code to access, so if that personal pin code is obtained by someone else, things can get disastrous similar to what happened in the article.
Reflection:
In my opinion, a credit card is similar to an email account. All it requires is a password or in this case, a personal pin to access a credit card. If the password to your email is obtained by someone else, that person can access all your private documents and information in your email account. Furthermore, things will get disastrous if the person decides to contact your contact list and act as if he/she is the owner. Now, all of the your email contacts may fall any potential scams sent to them by the person. If one does not handle their personal information with caution, he or she may be the next victim to carry a massive debt exactly like the victims mentioned in the article.
Article:http://www.vancouversun.com/news/Accused+killer+racked+debt+using+dead+wife+credit+court+told/2690675/story.html
After precise investigations regarding the death of Charles Kembo’s wife Margaret Kembo, daughter, and a friend, Charles Kembo is charged with first degree murder. His motive was believed to assume the victim’s identities for financial gains. According to his wife’s chartered accountant Rosanne Terhart, Margaret owned $43 000 in credit card debt when she vanished in 2002. The substantial debt was distributed over five different credit cards. By the end of 2003, another five credit cards were created under Margaret’s name and resulted in a total balance of $160 000. Furthermore, several fraudulent cheques were issued and deposited after the credit card limits were reached. Charles Kembo spent the fortune to portray himself as a rich, successful businessman along with an expensive car.
Connection:
This article contradicts the numerous advantages and benefits of credit cards as stated in Chapter 14.2. The book strictly focuses on the benefits and the convenience credit cards can provide its owners rather than the various dangers behind the possession of a credit card. All it takes is several pieces of personal information for others to secretly withdraw money from one’s bank account without one’s notice. Not to mention, many credit cards only require a personal pin code to access, so if that personal pin code is obtained by someone else, things can get disastrous similar to what happened in the article.
Reflection:
In my opinion, a credit card is similar to an email account. All it requires is a password or in this case, a personal pin to access a credit card. If the password to your email is obtained by someone else, that person can access all your private documents and information in your email account. Furthermore, things will get disastrous if the person decides to contact your contact list and act as if he/she is the owner. Now, all of the your email contacts may fall any potential scams sent to them by the person. If one does not handle their personal information with caution, he or she may be the next victim to carry a massive debt exactly like the victims mentioned in the article.
Article:http://www.vancouversun.com/news/Accused+killer+racked+debt+using+dead+wife+credit+court+told/2690675/story.html
Wednesday, January 13, 2010
Peachtree by Sage Quantum – Accountants Edition 2010
Summary:
Last year, Peachtree has climbed its way up to the top rank of all other accounting software in 2009. Being a dominant figure, Peachtree provides basic accounting solutions to complicated solutions for small business owners. One of the key successes to this software is the easy-to-navigate user interface. Through the Peach Navigation Centers, users can access various product functions with a few clicks away. Peachtree offers many useful functions to make business owner’s life easier. A few of the major functions include General Ledgers, Accounts Receivable, Accounts Payable and Payroll features, and a comprehensive Inventory module. To be more competitive, Peachtree released the Business Analytics option which enables users to compare one’s client’s business performance to comparable businesses. This product is highly recommended to small businesses and new users because it’s very easy to access your client’s data which will greatly reduce the amount of work required at year end and increase the accuracy of the results. Moreover, Peachtree provides built-in safeguards which make it hard to pass up.
Connection:
This Quantum software is closely tied with the early version of ACCPAC Simply Accounting software. The only difference between the two is that Quantum is better, faster, and enhanced with more features. As mentioned in 12.4, Simply Accounting is designed for small businesses due to its limitations. However, problems like insufficient computing capacity and limited to only one user have been covered and eliminated by Quantum. Not only does Quantum allow 40 users simultaneously, it is designed for both small and medium businesses and even large businesses. If you look at the master menu of Simply Accounting on pg 527, you will see that you can only view and work on one thing at a time. However, in Quantum, users are capable of opening multiple windows simultaneously, therefore, allowing users to multitask.
Reflection:
From my personal experience with Simply Accounting in grade 11, accounting software had immensely reduced the number of accounting errors and the sophistication of the accounting process. For example, journalizing a 5 column journal manually will take hours to get everything balanced and transferred to other financial statements. However, by using Simply Accounting, I am only required to do the first step of the accounting cycle, journalizing, and the software will magically complete the other steps of the accounting cycle. This includes general journals, trial balance, balance sheet, and financial statements. As a result, only about 1 hour entering journal entries into the computer and allow the computer to finish the accounting cycle, instead of 3 hours of manual work.
http://www.cpatechnologyadvisor.com/article/article.jsp?id=2387&pageNum=1
http://www.cpatechnologyadvisor.com/article/article.jsp?id=2387&pageNum=2
Last year, Peachtree has climbed its way up to the top rank of all other accounting software in 2009. Being a dominant figure, Peachtree provides basic accounting solutions to complicated solutions for small business owners. One of the key successes to this software is the easy-to-navigate user interface. Through the Peach Navigation Centers, users can access various product functions with a few clicks away. Peachtree offers many useful functions to make business owner’s life easier. A few of the major functions include General Ledgers, Accounts Receivable, Accounts Payable and Payroll features, and a comprehensive Inventory module. To be more competitive, Peachtree released the Business Analytics option which enables users to compare one’s client’s business performance to comparable businesses. This product is highly recommended to small businesses and new users because it’s very easy to access your client’s data which will greatly reduce the amount of work required at year end and increase the accuracy of the results. Moreover, Peachtree provides built-in safeguards which make it hard to pass up.
Connection:
This Quantum software is closely tied with the early version of ACCPAC Simply Accounting software. The only difference between the two is that Quantum is better, faster, and enhanced with more features. As mentioned in 12.4, Simply Accounting is designed for small businesses due to its limitations. However, problems like insufficient computing capacity and limited to only one user have been covered and eliminated by Quantum. Not only does Quantum allow 40 users simultaneously, it is designed for both small and medium businesses and even large businesses. If you look at the master menu of Simply Accounting on pg 527, you will see that you can only view and work on one thing at a time. However, in Quantum, users are capable of opening multiple windows simultaneously, therefore, allowing users to multitask.
Reflection:
From my personal experience with Simply Accounting in grade 11, accounting software had immensely reduced the number of accounting errors and the sophistication of the accounting process. For example, journalizing a 5 column journal manually will take hours to get everything balanced and transferred to other financial statements. However, by using Simply Accounting, I am only required to do the first step of the accounting cycle, journalizing, and the software will magically complete the other steps of the accounting cycle. This includes general journals, trial balance, balance sheet, and financial statements. As a result, only about 1 hour entering journal entries into the computer and allow the computer to finish the accounting cycle, instead of 3 hours of manual work.
http://www.cpatechnologyadvisor.com/article/article.jsp?id=2387&pageNum=1
http://www.cpatechnologyadvisor.com/article/article.jsp?id=2387&pageNum=2
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