International Accounting
5th Edition
ISBN: 9781259747984
Author: Doupnik, Timothy S., Finn, Mark T., Gotti, Giorgio
Publisher: Mcgraw-hill Education,
expand_more
expand_more
format_list_bulleted
Question
Chapter 1, Problem 5EP
To determine
Determine the larger multinational corporation from the two corporations by calculating an index of multi-nationality based upon the geographical distribution of sales revenue and non-current assets.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
Siemens AG, a German company, is Europe’s largest engineering and electronics company. The company prepares its financial statements according to IFRS.
Required:
I need to use the Internet to locate the most recent financial report for Siemens. The address is www.siemens.com. Locate the significant accounting policies disclosure note.
How does the company account for research and development expenditures? Does this policy differ from U.S. GAAP?
Siemens AG, a German company, is Europe’s largest engineering and electronics company. The company prepares its financial statements according to IFRS. Required: 1. Use the Internet to locate the most recent financial report for Siemens. The address is www.siemens.com. Locate the significant accounting policies disclosure note. 2. How does the company account for research and development expenditures? Does this policy differ from U.S. GAAP?
Taft Corporation operates primarily in the United States. However, a few years ago it opened a plant in Spain to produce merchandise to sell there. This foreign operation has been so successful that during the past 24 months the company started a manufacturing plant in Italy and another in Greece. Financial information for each of these facilities follows:The company’s domestic (U.S.) operations reported the following information for the current year:Taft has adopted the following criteria for determining the materiality of an individual foreign country: (1) Sales to unaffiliated customers within a country are 10 percent or more of consolidated sales or (2) long-lived assets within a country are 10 percent or more of consolidated long-lived assets.Apply Taft’s materiality tests to identify the countries to report separately with respect to (a) revenues and (b) long-lived assets.
Chapter 1 Solutions
International Accounting
Ch. 1 - Prob. 1QCh. 1 - 2. What accounting issues arise for a company as a...Ch. 1 - 3. Why might a company be interested in investing...Ch. 1 - 4. How important is foreign direct investment to...Ch. 1 - 5. What financial reporting issues arise as a...Ch. 1 - 6. What taxation issues arise as a result of...Ch. 1 - Prob. 7QCh. 1 - 8. Why might a company want its stock listed on a...Ch. 1 - 9. Where might one find information that could be...Ch. 1 - Prob. 10Q
Knowledge Booster
Similar questions
- Choose the correct. Which of the following statements is not true under U.S. GAAP?a. Operating segments can be determined by looking at a company’s organization chart.b. Companies must combine individual foreign countries into geographic areas to comply with the geographic area disclosure requirements. c. Companies that define their operating segments by product lines must provide revenue and asset information for the domestic country, for all foreign countries in total, and for each material foreign country.d. Companies must disclose total assets, investment in equity method affiliates, and total expenditures for long-lived assets by operating segment.arrow_forwardThe Table also provides financial indicators for the chemical and related products industry (Chemicals and Allied Products) for the year 2018. This will allow you to compare the performance of both firms J & J and Merck with the industry in which they compete for the same year. Do you understand that the performance of firms is superior to the average performance of their competitors in the market? Justify your answer. What adjustments or changes would you recommend to make each of the firms more attractive to shareholders and others interested in them? Justify your answer. Company Name: Year 2018 Chemicals and Allied Products Industry Ratios ………….. Solvency or Debt Ratios Merck J&J 2018 Debt ratio 0.67 0.61 0.47 Debt-to-equity ratio 0.93 0.51 0.38 Interest coverage ratio 12.27 18.91 -9.43 Liquidity Ratios Current ratio 1.17 1.47 3.47 Quick ratio 0.92 1.16 2.12 Cash…arrow_forwardWhich of the following statements is not true under U.S. GAAP?a. Operating segments can be determined by looking at a company’s organization chart.b. Companies must combine individual foreign countries into geographic areas to comply with the geographic area disclosure requirements.c. Companies that define their operating segments by product lines must provide revenue and asset information for the domestic country, for all foreign countries in total, and for each material foreign country.d. Companies must disclose total assets, investment in equity method affiliates, and total expenditures for long-lived assets by operating segment.arrow_forward
- A U.S. multinational corporation has divided its operations into several operating segments and has provided the following data for each segment:(attached)It is important to note that all purchases of goods or services from other segments have been sold to outside parties except one. Control devices with a cost of $1,000,000 were sold to the Semiconductors segment for $1,700,000. These items remain in inventory at year-end.(attached)1. Determine which segments are reportable. 2. Given the available information, prepare all of the necessary schedules and disclosures regarding the entity’s segments, geographical areas, and reconciliations to consolidated amounts. 3. Identify and determine the value of several ratios that may be helpful in analyzing the above information.arrow_forwardWhich of the following statements best differentiates multinational firms from domestic firms? a. Multinational firms have overseas sales offices. b. Multinationals engage in both importing and exporting. c. Multinational firms have one or more plant(s) in a foreign country. d. Multinational business people make use of worldwide sales, capital, and labor markets.arrow_forwardIdentify which standard of comparison, (a) intracompany, (b) competitor, (c) industry, or (d) guidelines,best describes each of the following examples. Compare Ford’s return on assets to GM’s return on assets.arrow_forward
- McDonald’s conducts operations worldwide and is managed in three primary geographic segments: U.S., International Lead Markets (including Australia, Canada, France, Germany, and the UK), and High Growth Markets (including China, Italy, Korea, Poland, Russia, Spain, Switzerland, and the Netherlands). A hybrid geographic/corporate segment, Foundational Markets & Corporate, reports on the results of all other countries as well as any unallocated amounts. McDonald’s allocates resources to, and evaluates the performance of, its segments based on operating income. The asset totals disclosed by geography are directly managed by those regions and include accounts receivable, inventory, certain fixed assets, and certain other assets. Corporate assets primarily include cash and cash equivalents, investments, deferred tax assets, and other assets. Refer to the following geographic segment data (in millions) from the 2017 annual report of McDonald’s Corp.:arrow_forwardCompanies that operate in different industries may have very different financial ratio values. These differences may grow even wider when we compare companies located in different countries. (Click the icon to view the financial statements.) Requirement Compare three leading companies on their current ratio, debt ratio, and times-interest-earned ratio. Compute three ratios for Sobeys (the Canadian grocery chain), Sony (the Japanese electronics manufacturer) and Daimler (the German auto company). Based on your computed ratio values, which company looks the least risky? Begin by computing the ratios. Start by selecting the formula for the current ratio. Then, calculate the current ratios for Sobeys, Sony, and Daimler. (Enter amounts in millions or billions as provided to you in the problem statement. Round the current ratios to two decimal places.) 1 Sobeys Sony Daimler Sobeys Sony 1 Soboys Sony Daimler 1 Next, select the formula for the debt ratio. Then, calculate the debt ratios for…arrow_forwardThere are many ways of using standardized financial information. The usual goal is to put firms on an equal footing for comparison purposes. For example, for auto manufacturers, it is common to express sales, costs, and profits on a per-car basis. For each of the following industries, give an example of an actual company (Saint Lucia Electricity Services Limited) and (Liat Airlines) and discuss one or more potentially useful means of standardizing financial information: a. Public utilities (Saint Lucia Electricity Services Limited) b. Airlines (Liat Airlines)arrow_forward
- One of the ways to analyze a company’s financial performance is to compare its performance with those of Multiple Choice foreign governments. manufacturers producing their products. its competitors. the U.S. government.arrow_forwardOne has been hired as an analyst for BNZ Bank and your team is working on an independent assessment of Blaster PLC. Blaster PLC is a firm that specializes in the production of freshly imported farm products from China. their assistant has provided him with the following data for Blaster PLC and their industry. Ratio 2020 2019 2018 2020- Industry Average Long-term debt 0.45 0.40 0.35 0.35 Inventory Turnover 62.65 42.42 32.25 53.25 Depreciation/Total Assets 0.25 0.014 0.018 0.015 Days’ sales in receivables 113 98 94 130.25 Debt to Equity 0.75 0.85 0.90 0.88 Profit Margin 0.082 0.07 0.06 0.075 Total Asset Turnover 0.54 0.65 0.70 0.40 Quick Ratio 1.028 1.03 1.029 1.031 Current Ratio 1.33 1.21 1.15 1.25 Times Interest Earned 0.9 4.375 4.45 4.65 Equity Multiplier 1.75 1.85 1.90 1.88 In the annual report to the shareholders, the…arrow_forwardCompare the Logistics Performance Index (LPI) measured by the World Bank in Canada to that of the country in question. (India & Germany) Use APA citation for sources used.arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
Financial Reporting, Financial Statement Analysis...FinanceISBN:9781285190907Author:James M. Wahlen, Stephen P. Baginski, Mark BradshawPublisher:Cengage Learning
Financial Reporting, Financial Statement Analysis...
Finance
ISBN:9781285190907
Author:James M. Wahlen, Stephen P. Baginski, Mark Bradshaw
Publisher:Cengage Learning