FEDEX Corporation Form 10-K Analysis Jeffrey D. Simmons Ashford University BUS 630: Managerial Accounting Professor Dr. Isabel Wan September 5, 2011 Abstract This paper has several goals. First, the managerial accounting question to be analyzed is business strategy. Utilizing financial reports management is able to analyze forward-looking statements of FEDEX Corporation current expectations based on their 2005 10K form. The final goal is to establish qualified information relative to business strategy and accounting practices that will enable management’s business decision with reference to industry share, total …show more content…
The salary of FedEx Express CEO David J. Bronczek is traceable to the FedEx Express business segment but is common to the ten sorting and handling facilities that FedEx Express operates (FedEx Form 10-K 2005, pp. 24 & 26). The cost of operating one of the above sorting and handling facilities is traceable to that specific facility but the cost of operating the specific facility is common to all trucks dropping off or delivering packages. The salary of Executive VP T. Michael Glenn would be traceable to FedEx’s Market Development and Communications departments but would be common to FedEx’s four business segments (FedEx Form 10-K 2005, p. 27) Compute the margin, turnover, and return on investment (ROI) in 2005 for each of FedEx’s four business segments (Hint: page 99 reports total segment assets for each business segment.) (Dollar values in millions) FedEx Express FedEx Ground FedEx Freight FedEx Kinko's Sales $19,485 $4,680 $3,217 $2,066 Operating income $1,414 $604 $354 $100 Segment assets (2005) $13,130 $2,776 $2,047 $2,987 Segment assets (2004) $12,443 $2,248 $1,924 $2,903 Avg operating assets $12,787 $2,512
The remainder of this note discusses each of the steps in the process and then provides an exercise on the various financial measures that are useful as part of the analysis. The final section of the note demonstrates the relationship between a firm’s strategy and operating characteristics; and its financial characteristics.
In accounting there is much to be learned, about the financial aspects of a business. In the past five weeks I have learned the importance of financial reports and how they relate to the success of an establishment. These reports may include balance sheets and income statements, which help accountants and the public grasp the overall financial condition of a company. The information in these reports is really significant to, managers, owners, employees, and investors. Managers of a business can take and deduce financial
The inventory balance on Dell's balance sheet is small ($459) compared to the other because they have been recently engaged in a number of business ventures with the aim of bringing in more profits and placing themselves as a global leader in their business sector. The low inventory levels keep them ahead of the other competitors in the market (Kramer, 2002).
This course focuses on ways in which financial statements reflect business operations and emphasizes use of financial statements in the decision-making process. The course encompasses all business forms and various sectors such as merchandising, manufacturing and service. Students make extensive use of spreadsheet applications to analyze accounting records and financial statements. Prerequisites: COMP100 and MATH114 / 4-4
A vertical and horizontal analysis of each company's balance sheet and income statement in this particular case will be enlightening. A vertical analysis will for instance shed some light on how revenue is being used. In this case, each component of the companies' financial statements will be converted into a percentage of a key component of either the balance sheet or the income statement. A special common size balance sheet and income statement will be utilized to ease comparison. The
FedEx’s external environment both positively and negatively affects the organizations operations. Their external environment consists of government, weather, and the economy. FedEx does not have a very large external environment because their operations are not affect by many outside sources.
This case analysis commences by explaining the type of accounting officer needed to execute the job functions for the client, Big Spenders Inc. The next objective will be to examine the income statements of the two prospective business entities that the client intends to choose from concerning investment – in order to diversify its portfolio. The strategies that will be explored in terms of the analysis of the income statements includes the computation of (i) operation profit margin, (ii) gross margin, (iii) net profit margin, and (iv) return on equity – for both companies of interest. The results of examinations will put the accountant in a position to make sounds recommendation to his superior at BUSI 1043 LLP, so that Big Spenders Inc. can be properly guided.
As the financial analyst of the company, this report is written in respect to how the financial position of the company can be improved. This report is aimed for the senior management team.
FedEx is a highly centralized organization, with decision-making for the firm centralized at the Memphis headquarters. While national branches of the company have some autonomy in hiring, head office controls hiring policy. Decision-making on large capital projects is also centralized, because the network structure of the company's distribution means that such decisions have global implications. As a result, FedEx has a heavily-centralized structure where very little power is delegated to local managers. Instead local managers are charged with operating the company's strategy efficiently and effectively.
Analyzing the company’s performance compared to its historical figures is always useful; nevertheless, these historical figures can be also a very useful tool to forecast future ProForma figures. We usually start by forecasting future sales (based on an average increase in sales figure) and other balance sheet and income statement items are forecasted as percentage of sales, this percent is normally consistent from historically figures. A close look should be given to the company’s operations and plan for the coming year while making our assumptions and forecasted figures. Normally we should follow
FedEx was first established in 1973 as a logistic company with the name Federal Express that be created by founder and first CEO Frederick W Smith. The Headquarters is in Memphis, Tennessee in the US. The company became well known for its fast and reliable delivery service around the world. On its first night of operation FedEx delivered 186 bundles to 25 urban locations in the US with only 389 employees and a 15 Dassault Falcon aircraft. In 1980 FedEx purchased a system for live updates on the packages. In this system, FedEx drivers share the current locations from the trucks to provide updates of the packages to the customers. This information was sent to a central computer of FedEx then the company improved the update system by introducing FedEx.com webpage. This webpage allowed the tracking data to be easily accessible. However, recently, FedEx uses Savvy bundle for packing and tracking the products across couriers. (Baldwin, 2016)
return on investment for each division and the company as a whole along with the behavioral
We have constructed pro forma financial statements based on the sales-driven estimates and interest and tax fixed burdens. The key determining factors to the accuracy of these projections are the assumptions made about revenue growth and the sales-driven accounts like cost of goods sold, current assets (viz., inventory). Also, assumptions about the company’s capital budgeting
Vital Information gained from financial reports and annual reports provided by the company will aid in determining a strategic plan to
For my hypothetical model of ROI, I used the information from the Apple retail store that opened in SoHo, New York, in 2004. I am also using Apple’s 2004 and 2005 retail financials.