Prepaid expenses vs unearned revenue

Reference no: EM13759111

Prepaid Expenses vs. Unearned Revenue

From this week's reading, you were introduced to the concept of unearned revenue and prepaid expenses. Imagine that you are CFO of a company that manufacturers picture frames. Your company wants to become more vertically integrated, meaning it no longer wants to purchase the products that go into the frame, but rather manufacture them. To do this, your company has decided to acquire a glass manufacturing company. There are two glass manufacturers that your company is deciding between: Glass R' US and Glass Team. In reviewing the balance sheet of each company, you noticed the following:

a. Glass R' US has a large amount of Unearned Revenue and no Prepaid Expenses.

b. Glass Team has a large amount of Prepaid Expenses and no Unearned Revenue

In your discussion post, explain what unearned revenue and prepaid expenses represent. Then, basing your decision solely on the amount of unearned revenue and prepaid expenses each company has, tell us which company you would acquire and why? (In answering "why", be sure to include why you believe that company's position is superior. For example, "I believe having a large amount of prepaid expenses is a better position because ....")

Reference no: EM13759111

Questions Cloud

Effective transportation design and an ineffective one : Distinguish between an effective transportation design and an ineffective one and describe the various modes of transportation and their use in supply chains

In what ways is the zara model counterintuitive : In what ways is the Zara model counterintuitive? In what ways has Zara's model made the firm a better performer than Gap and other competitors

How a literary analysis is different than other essays : Discuss the process you used to write the literary analysis for the Week Three rough draft assignment. Describe how a literary analysis is different than other essays you have written.

Important in your firms supply chain : Which type of transportation is most important in your firm's supply chain? Could your firm use a different mix of transportation modes to improve its efficiency?

Prepaid expenses vs unearned revenue : From this week's reading, you were introduced to the concept of unearned revenue and prepaid expenses. Imagine that you are CFO of a company that manufacturers picture frames.

What literature represents about the human experience : Analyzing those more complicated elements can help you discover what literature represents about the human experience and condition.

Benefits of cost accounting : You are a consultant for Blue Sky Consulting in the small town of Centervale. After 30 years of saving for retirement you discuss with your boss the possibility of early retirement.

Java shape program console : Program is adequately documented. It's comments identifies its name, purpose, author and date.Throughout the code, comments and/or relevant component names should attempt to make theprogram understandable.

Write paper on the threats and weaknesses for a company : Write paper on the threats and weaknesses for a company

User Account

All Pages