http://www.theprovince.com/business/fp/down+investors+shed+commodity+stocks/2895873/Mart+faces+squeeze+mixed+economy/2901815/story.html
Summary
Wal-Mart Stores Inc. may find itself in an uncomfortable place in the “new normal” of the U.S. economy, getting squeezed in the middle as some customers trade up while others seek out even lower prices. During the recession, Wal-Mart thrived as consumers cut back their spending to the most basic necessities and sought bargain at stores. However, now that the U.S. economy is recovering, people who held onto their jobs are more willing to shop trendier fashions at department store like Kohl’s Corp and Target Corp. On the other hand, chains like Family Dollar Stores Inc are stocking more food on their shelves, in order to help them win customers that are shopping only for essentials. Moreover, many retailers, including Target and Kohl have posted better-than-expected March same-store sales last week, in the strongest sign yet of revived consumer demand. Even Family Dollar posted better-than-expected quarterly earnings, but Wal-Mart did not report monthly sales and a spokeswoman declined to discuss sales trends. In February, Wal-Mart forecasted first-quarter sales at stores open at least a year would be flat, within a range of up 1% to down 1%. Since the beginning of the year, Wal-Mart shares are up 3%, while Target’s stock has jumped 16% and Family Dollar’s is up 36.3%. The Standard & Poor’s 500 Index is up 7.3% in the same period. Analysts on average expect Wal-Mart to post a 9% increase in first-quarter earnings per share, according to Thomson Reuters. This compares with expectations for Target’s earnings to rise almost 22%, an attractive prospect to some.
Connection
This article connects with Chapter 15.1 about insiders of the company such as owners and its executives, and outsiders such as bankers and investors. This article will definitely be an interest for outsiders such as bankers and investors who want to invest or loan money to Wal-Mart. For instance, if bankers were to loan money to Wal-Mart, they would want to know their ability to pay of the loan and since Wal-Mart, and since, in February, Wal-Mart forecasted their first-quarter sales at stores open at least a year would be flat, within a range of up 1% to down 1%. Bankers would have to rethink about lending them money because as the economy goes up, Wal-Mart would not be a favourable place to consumers to shop and eventually their sales will decrease in time, and as a result loans would be harder to pay. Now, as the investor’s perspective, they would usually look for companies that are growing and profitable. For example, if investors were to look at the three companies to invest: Wal-Mart, Target, Family Dollar’s, and Standard & Poor’s 500 Index they would look at shares, they would look at their shares and stocks. In addition, since all the companies have either increased in their stocks and shares, the investors would have to compare how much each company’s shares and stocks are increased before they make any decisions.
Reflection
In my opinion, Wal-Mart should make some changes to fit the “new” change in the U.S. economy since it’s rising. Now that the economy is getting better, some of the Wal-Mart customers that are economically recovering have gone up-channel and has practically abandoned Wal-Mart for more expensive products. On the other hand, some of the shoppers had suffered significant economic damage had gone down-channel to the dollar stores. However, I am not really concerned for Wal-Mart because for the past year Wal-Mart had a significant name for being cheap and affordable for consumers and there would most definitely be some loyal consumers who will stick with Wal-Mart.
Tuesday, April 13, 2010
Thursday, March 25, 2010
Chapter 14- Banking and NSF Cheques
http://www.vancouversun.com/business/Disgraced+investor+Earl+Jones+declared+bankrupt/1909273/story.html
Summary
Disgraced financier Earl Jones was declared personally bankrupt by a Quebec court. Jones was faced with multiple charges: fraud and theft charges. After hearing the testimony form petitioner Christina Ross in court, the controversy was exposed. The controversy was about how Jones forged Christina Ross and her sister’s signatures on a document, and later endorsed a cheque made out to their father’s estate and deposited it in his own account and bounced three $31,000 cheques. More information was exposed in the court house about how Jones shamelessly used client capital to cover interest payments to his clients. As a result, from their dollar damages that have been estimated at up to $500 million, 175 people appeared to have been left high and dry from. Even more ludicrous, Jones was revealed that he had used $12.3 million from the trust account of his corporation for his own family’s personal expenses. Furthermore, Jones bank statements from 2000-20007 were missing. In the end, Jones spent one night in jail and was charged with four counts of fraud and four counts of theft and his company Earl Jones Consultant and Administration Corp. was officially declared in ruins.
Connection
In Chapter 14, particularly in section 14.1, we learned that writing cheques that “bounces” was not good for our reputation, costs us money, and could even damage our credit rating. As a result, it could even make borrowing money difficult because our credit rating was poor. In this article, Jones had three NSF cheques with each amount worth around $31,000, which already gives him a bad reputation when borrowing money from the bank. However, with his illegal situations such as having forged signatures and endorsed a cheque out of a person’s father’s estate to deposit for his own use had no doubt made it far worse than bounced cheques worth thousands of dollars. I can say that his credit rating and a simple thing such as trust from any bank had been severely damaged in a way that it can’t be resolved.
Reflection
I found Jones to be a real pathetic man as to go so low to lie and cheat on others, specifically his clients whom they trusted him with their hard earned money to be just wasted by this fellow. Jones even used the company’s money to pay for his cars, real estate, repairs, furniture, credit-car bills, his children’s education and various investments. What was the use of getting a salary if you could just take funds and what not from where you work as living expenses? I think what he did was a bad influence on his children and many others, and there was one lesson learned: Don’t assume everyone is trustworthy especially strangers.
Summary
Disgraced financier Earl Jones was declared personally bankrupt by a Quebec court. Jones was faced with multiple charges: fraud and theft charges. After hearing the testimony form petitioner Christina Ross in court, the controversy was exposed. The controversy was about how Jones forged Christina Ross and her sister’s signatures on a document, and later endorsed a cheque made out to their father’s estate and deposited it in his own account and bounced three $31,000 cheques. More information was exposed in the court house about how Jones shamelessly used client capital to cover interest payments to his clients. As a result, from their dollar damages that have been estimated at up to $500 million, 175 people appeared to have been left high and dry from. Even more ludicrous, Jones was revealed that he had used $12.3 million from the trust account of his corporation for his own family’s personal expenses. Furthermore, Jones bank statements from 2000-20007 were missing. In the end, Jones spent one night in jail and was charged with four counts of fraud and four counts of theft and his company Earl Jones Consultant and Administration Corp. was officially declared in ruins.
Connection
In Chapter 14, particularly in section 14.1, we learned that writing cheques that “bounces” was not good for our reputation, costs us money, and could even damage our credit rating. As a result, it could even make borrowing money difficult because our credit rating was poor. In this article, Jones had three NSF cheques with each amount worth around $31,000, which already gives him a bad reputation when borrowing money from the bank. However, with his illegal situations such as having forged signatures and endorsed a cheque out of a person’s father’s estate to deposit for his own use had no doubt made it far worse than bounced cheques worth thousands of dollars. I can say that his credit rating and a simple thing such as trust from any bank had been severely damaged in a way that it can’t be resolved.
Reflection
I found Jones to be a real pathetic man as to go so low to lie and cheat on others, specifically his clients whom they trusted him with their hard earned money to be just wasted by this fellow. Jones even used the company’s money to pay for his cars, real estate, repairs, furniture, credit-car bills, his children’s education and various investments. What was the use of getting a salary if you could just take funds and what not from where you work as living expenses? I think what he did was a bad influence on his children and many others, and there was one lesson learned: Don’t assume everyone is trustworthy especially strangers.
Monday, January 11, 2010
Chapter 12
http://www.theprovince.com/business/Stats+show+spending+binge+Christmas/2418483/story.html
Summary
This article enlightens us about how Canadians are willing to set out on a vast spending spree for Christmas in December, which in the end proves that our economy is slowing gaining its momentum. For instance, this article states that Canadians have spent a total of 5.2 per cent more in December of 2008 than a year earlier, when retailers notched only a 2 per cent gain as the recession takes place. Moreover, sales on luxury items such as luggage and leather goods stores climbing an overall 18.4 per cent seems to be the most popular commodities. On the other hand, sales at household appliance stores don’t seem too bad also, with a jump of 13.7 per cent. Furthermore, having discounts in stores like Dollarama and Wal-Mart has helped with the increase of purchases with a total of 10.6 per cent increase over December 2008. Last but not least, spending was particularly robust in Canada’s “Boxing Week,” reaching 8 per cent as consumers sought bargains and retailers blew out their Christmas inventory at deeply discounted prices.
Connection
This article connects to chapter twelve because a part of chapter twelve talks about discounts in a business. In chapter twelve, it states that a cash discount can only happen determining by the terms of sale, which refers to the arrangements made with customers as to when the goods or services are to be paid for and whether a cash discount is offered. However, it is this "trust" a business has with their customers that assurs them that their customers will pay their full amount before or on the due date. Furthermore, this "trust" is one of the reasons why a business can be assure to give huge sales and discounts to customers such as the Boxing Week sale, and Holiday sales such as the Christmas sale. Sales or discounts are a huge advantage to a business, though a business will make less profit, it helps to remove old inventories in order to bring in new ones. This is the reason why a business relies on special occasions such as Christmas, and Black Friday to boost up their sales. This chapter also talks about how a business deals with customers with late discounts, and I bet that every business has at least one late discount in a month or a year, especially during huge holiday sales like the one this article states. A late discount can cause a small dilemma because no business wants a reputation for being cheap, but at the same a business does not want to be taken advantage of by its customers. So, if a business decides to disallow a late discount, then the business will have to cash the customer’s deficient cheque and then credit the customer’s account with the amount of the cheque. Furthermore, the business will then write a respectful letter requesting that the customer make up the deficiency. This is probably a small case to any normal, experienced businesses.
Reflection
I am thrilled that the economy is slowly rising again and this is all done because of us, consumers. We get a win-win situation when we spend money on gifts especially during the recession. For example, by spending a little for our family members and friends we can show that we think and care for them, and it will even bring excitement in their life. Furthermore, by spending a little of our money, we can help a business gain profit, and when a business is busy, individuals will have more opportunities to be employed. Overall, this is the first step, in the long run, to help recover the recession.
Summary
This article enlightens us about how Canadians are willing to set out on a vast spending spree for Christmas in December, which in the end proves that our economy is slowing gaining its momentum. For instance, this article states that Canadians have spent a total of 5.2 per cent more in December of 2008 than a year earlier, when retailers notched only a 2 per cent gain as the recession takes place. Moreover, sales on luxury items such as luggage and leather goods stores climbing an overall 18.4 per cent seems to be the most popular commodities. On the other hand, sales at household appliance stores don’t seem too bad also, with a jump of 13.7 per cent. Furthermore, having discounts in stores like Dollarama and Wal-Mart has helped with the increase of purchases with a total of 10.6 per cent increase over December 2008. Last but not least, spending was particularly robust in Canada’s “Boxing Week,” reaching 8 per cent as consumers sought bargains and retailers blew out their Christmas inventory at deeply discounted prices.
Connection
This article connects to chapter twelve because a part of chapter twelve talks about discounts in a business. In chapter twelve, it states that a cash discount can only happen determining by the terms of sale, which refers to the arrangements made with customers as to when the goods or services are to be paid for and whether a cash discount is offered. However, it is this "trust" a business has with their customers that assurs them that their customers will pay their full amount before or on the due date. Furthermore, this "trust" is one of the reasons why a business can be assure to give huge sales and discounts to customers such as the Boxing Week sale, and Holiday sales such as the Christmas sale. Sales or discounts are a huge advantage to a business, though a business will make less profit, it helps to remove old inventories in order to bring in new ones. This is the reason why a business relies on special occasions such as Christmas, and Black Friday to boost up their sales. This chapter also talks about how a business deals with customers with late discounts, and I bet that every business has at least one late discount in a month or a year, especially during huge holiday sales like the one this article states. A late discount can cause a small dilemma because no business wants a reputation for being cheap, but at the same a business does not want to be taken advantage of by its customers. So, if a business decides to disallow a late discount, then the business will have to cash the customer’s deficient cheque and then credit the customer’s account with the amount of the cheque. Furthermore, the business will then write a respectful letter requesting that the customer make up the deficiency. This is probably a small case to any normal, experienced businesses.
Reflection
I am thrilled that the economy is slowly rising again and this is all done because of us, consumers. We get a win-win situation when we spend money on gifts especially during the recession. For example, by spending a little for our family members and friends we can show that we think and care for them, and it will even bring excitement in their life. Furthermore, by spending a little of our money, we can help a business gain profit, and when a business is busy, individuals will have more opportunities to be employed. Overall, this is the first step, in the long run, to help recover the recession.
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