Reference no: EM133182937

Question 1

Identification of Company Strategies. Refer to the websites and the Form 10-K reports of Home Depot and Lowe's.

Compare and contrast their business strategies.

In a Identification of Company Strategies (HD and Lowe's),

Question 2

Computing Cash Collections from Customers. Caterpillar manufactures heavy machinery and equipment and provides financing for purchases by its customers. Caterpillar reported sales and interest revenues of $51,324 million for Year 1. The balance sheet showed current and noncurrent receivables of $15,752 million at the beginning of Year 1 and $18,448 million at the end of Year 1. Compute the amount of cash collected from customers during Year 1.

Computing Cash Payments to Suppliers. Lowe's Companies, a retailer of home improvement products, reported cost of goods sold of $31,729 million for Year 1. It reported merchandise inventories of $7,611 million at the beginning of Year 1 and $8,209 million at the end of Year 1. It reported accounts payable to suppliers of $3,713 million at the beginning of fiscal Year 1 and $4,109 million at the end of fiscal Year 1. Compute the amount of cash paid to merchandise suppliers during Year 1.

Question 3

Facebook which recently changed its main name to Meta has been in news for a lot of scandals such as data theft from Cambridge Analytics and privacy issue for its users, therefore I wasn't surprised by a lot of the risks they have mentioned in their 10-k. I am surprised however to know that they think of those issues as a risk instead of their lack of proper and needed action. Here are the major risks:

Risks Related to Product Offerings

Their main risk with product offering is the ability to maintain user engagement as well as get more new users. Reducing is spending by marketers is a big risk for them as a lot of their revenue is generated from ads. They should try to make the user experience smooth and keep making necessary changes to engage the existing customers and attract new customers. Different social media platforms such as Tik-Tok are a big threat to the future of Facebook.

Risks Related to Business Operations and Financial Results

Major operations and financial risks include COVID-19 and ads revenue, unfavorable media coverage, slow revenue growth, maintenance of tech infrastructure, and litigations. I am surprised about COVID-19 as a risk because due to the pandemic people had a lot of leisure time to use Facebook and Instagram more.

Risks Related to Government Regulation and Enforcement

Government restrictions, different data privacy policies, and consumer policy are major risks related to government regulation and enforcement. This is a necessary risk to protect the privacy of users and to make sure they are held liable in case they are careless about the sensitivity of privacy.

Risks Related to Data, Security, and Intellectual Property

There has been a lot of lawsuits against Facebook for data security and they were fined 5 billion by FTC over the Cambridge Analytics scandal. They must put enough infrastructure to make sure their user's information is safe and secure. This risk can bring a lot of problems in the future for Facebook if they don't take proper action now.

There is a big privacy and security issue in the world today as social media is flourishing and the mentality and culture to put all the events of life in our social media accounts. These data are being various ways to feed us the ads and news which can make a big impact on our decisions. One of the big ethical issues Facebook, which is a big risk, is that it has failed to protect consumers' data safely and provide more security. As Facebook has always emphasized profit over the protection of its consumer, it is becoming a dangerous platform and there are many ways companies and people can use the data from Facebook to cause various harmful activities. Facebook has the financial capacity to provide more security and make sure that the news is correct and isn't providing misinformation, but the only apparent thing Facebook is doing is "saying sorry" which is not enough. Consumers will have more trust in a product like this when they know that the company is doing everything it can to protect them, but if Facebook is unable to gain that trust back, they will start losing consumers.

Question 4

This is a very tricky question as it looks like a unique financial transaction, and this requires a unique way of recording. Before working on the solution and recording it is very important to understand the question clearly. Few key points about the scenario are as follow:

Airline entered a revolving accounts receivables facility (it used the $489 million AR and exchanged it with a trust for senior certificate)

$300 million was in the form of Senior Certificate and $189 Subordinate Certificate.

Sold Senior Certificate and received $300 million in cash.

It isn't mentioned clearly about how much the company made with the sale of subordinate certificate, but it did say is more than senior certificate and therefore it is more than $300 million

Company needs to pay fees and administrative costs to the facility. (amount not provided)

This whole transaction needs to be recorded separately and not in the regular balance sheet.

Suggestions for Transactions recording are as follow.