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Principles of Accounting, Volume 2: Managerial Accounting

Thought Provokers

Principles of Accounting, Volume 2: Managerial AccountingThought Provokers

Thought Provokers

TP 1.

LO 9.1You have just been elected president of a brand-new service club on campus. The club is part of a national organization, but the organization charter gives the local organization a fair amount of flexibility in setting up the management of the club. As president, you can choose to make most of the decisions for the club and pass along your direction to the officers and members below you, or you can create specific committees, such as membership or academic, and allow each of the committees to make its own decisions and rules within the overall guidelines set out by the national charter. Consider the need to manage and evaluate the club and describe which form of organization would you set up for your club and why.

TP 2.

LO 9.3Consider these two companies: Apple and ExxonMobil. Write a summary of your perception of each company’s financial position. Consider the levels of revenue, profitability, and any other financial measures you feel are relevant. After completing your summary, download Apple’s September 30, 2017 annual report (10-K) and download Exxon Mobil’s December 31, 2016 annual report (10-K) for more information.

Gather the following information for each company:

Apple Data
Apple 9/30/2017 9/24/2016 9/26/2015
Net sales
Income before provision for income taxes
Net income
Table 9.1
Exxon Mobile Data
Exxon 2017 2016 2015
Total revenues and other income
Income before income taxes
Net income attributable to ExxonMobil
Table 9.2

What observations do you have about the financial performance of each company? Calculate the net income % (also called profit margin %) of each company. What observations do you have? How do these results compare to your perception of these companies before reviewing the annual reports?

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