Summary:
WestJet Airlines acquired a rise in profit of 72% from $31.4 million to $54 million by the end of their third quarter. As a result of their success, WestJet has decided that it would begin paying dividends. The company also announced that they would buy back up to 7.26 million or 5% of their stock shares over the next year. After hearing this news, investors sent the WestJet shares up more than 4% on Wednesday. Another result of their success is an increase in revenue of 14% to $684.6 million. WestJet decided to begin charging a $20 fee for guest checking a second bag starting on or after January 19th, and also dropping the fee for third and fourth bags to $50 from $75 in hopes to increase revenue.
Connection:
This chapter consists of financial statements and dividends which are both mentioned in this article. Financial statements are important in a company because it gives both the business managers and investors (insiders and outsiders) an understanding of how well the company is doing, which ultimately affects decision making. One obvious example used in this article is profit margin ratio. It clearly states that the company has been doing significantly well which not only enables many opportunities for the company, but also attract many investors. As mentioned in the textbook, dividends aren’t recorded on the income statements. However, this dividends declared would affect retained earnings and therefore WestJet would be losing some of their earnings but at the same times pleasing their investors.
Reflection:
I believe that WestJet is going to become even more successful throughout the next quarter due to the amount of revenue they earned this quarter. If this money is invested correctly then they would have a huge opportunity to earn an even greater sum of money. By buying back 7.26 million of their shares, they would not have to pay more dividends and therefore increasing their profit. They can also sell these shares in the future for a higher price and therefore earning an even larger profit if their company does well. In short, WestJet is investing in itself and I believe that this is a really strategic and risky move that would lead to either their downfall or success.
http://online.wsj.com/article/BT-CO-20101103-714320.html
Sunday, November 7, 2010
Friday, October 15, 2010
Deal of the day: Chinese miner buys Canadian copper explorer
Summary:
China’s largest producer of nickel and cobalt, Jinchuan agreed to buy a Canadian metals explorer. It is therefore obvious that Chinese companies are expanding significantly with their new government’s “going out” policy which encourages companies to push overseas. Jinchuan already owns 14% of Continental Minerals (listed in TSX) and they will now pay $417million for an additional 13% premium. Continental is currently exploring a large copper-gold property in Xietongmen and has discovered two deposits that will help diversify Jinchuan. Jinchuan also bought Crowflight Minerals (another Canadian company) in April for $140million.Unlike Continental, Crowflight’s mining activities are in Canada itself. Additional to that another Chinese company, Shinochem may also be preparing a massive bid for PotashCorp. In total, Chinese companies have purchased 17 North American companies during the past year.
Connections:
This article is connected to chapter 1 in many ways. One main connection is the business activities used by these Chinese companies. Jinchuan buying large North American companies is one perfect example of investing activities. Investing activities require a company to obtain funds and Jinchuan most likely got their funds out of the Chinese government or a loan. Most companies make both long and short term investments and in this case, Jinchuan made a long term investment. Purchasing another company is part of investing activities, because it requires Jinchuan to purchase shares off another company, which as a result directly affect’s Jinchuan’s equity depending on how well or bad that company does.
Reflections:
Being a large country with a large population, China has many opportunities for expansion. It is evident that China is expanding and catching up to North America economically after reading this article. Chinese companies buying Canadian companies may be both good and bad for Canada’s economy. This would be advantageous in a short term because Canada would be developing good relationship with China which creates more international business opportunities for Canada in the future. On the other hand, this might also be disadvantageous in the long run for Canada. If Canadian companies such as Crowflight end up doing really well, ultimately china would profit from this more than Canada would. Therefore I believe that it would be more beneficial for large Canadian companies such as PotashCorp to stay as a large Canadian company and not another countries company.
http://blogs.ft.com/beyond-brics/2010/09/20/deal-of-the-day-chinese-miner-buys-canadian-copper-explorer/
China’s largest producer of nickel and cobalt, Jinchuan agreed to buy a Canadian metals explorer. It is therefore obvious that Chinese companies are expanding significantly with their new government’s “going out” policy which encourages companies to push overseas. Jinchuan already owns 14% of Continental Minerals (listed in TSX) and they will now pay $417million for an additional 13% premium. Continental is currently exploring a large copper-gold property in Xietongmen and has discovered two deposits that will help diversify Jinchuan. Jinchuan also bought Crowflight Minerals (another Canadian company) in April for $140million.Unlike Continental, Crowflight’s mining activities are in Canada itself. Additional to that another Chinese company, Shinochem may also be preparing a massive bid for PotashCorp. In total, Chinese companies have purchased 17 North American companies during the past year.
Connections:
This article is connected to chapter 1 in many ways. One main connection is the business activities used by these Chinese companies. Jinchuan buying large North American companies is one perfect example of investing activities. Investing activities require a company to obtain funds and Jinchuan most likely got their funds out of the Chinese government or a loan. Most companies make both long and short term investments and in this case, Jinchuan made a long term investment. Purchasing another company is part of investing activities, because it requires Jinchuan to purchase shares off another company, which as a result directly affect’s Jinchuan’s equity depending on how well or bad that company does.
Reflections:
Being a large country with a large population, China has many opportunities for expansion. It is evident that China is expanding and catching up to North America economically after reading this article. Chinese companies buying Canadian companies may be both good and bad for Canada’s economy. This would be advantageous in a short term because Canada would be developing good relationship with China which creates more international business opportunities for Canada in the future. On the other hand, this might also be disadvantageous in the long run for Canada. If Canadian companies such as Crowflight end up doing really well, ultimately china would profit from this more than Canada would. Therefore I believe that it would be more beneficial for large Canadian companies such as PotashCorp to stay as a large Canadian company and not another countries company.
http://blogs.ft.com/beyond-brics/2010/09/20/deal-of-the-day-chinese-miner-buys-canadian-copper-explorer/
Monday, May 3, 2010
Obama gives green jobs speech at Siemens Energy wind turbine plant in Iowa
Summary:
President Obama went to visit a Siemens Energy plant in Fort Madison, Iowa. This company makes blades for wind turbines and is an eco-friendly Company that received about $3.5 million in tax credits through the 2009 Recovery act stimulus. The reason the president went to Fort Madison is to give a speech stating that he is planning on “staking America’s future on a clean energy future.” President Obama continues his speech and expresses how impressed he is by how the plant has developed since the past few years. He is furthermore impressed by the amount of jobs this plant has offered this high unemployment city, with more than 600 employees. The President also stated that Siemens will be a foundation that would lead to a long term growth and prosperity. It is obvious that the president has high hopes for this company and plans to decrease the amount of greenhouse gas emitted from the States.
Connection:
With the goal of “staking America’s future on a clean energy future,” it is obvious that there will be large cost involved to begin the operations necessary for this goal. This would definitely mean there are more jobs to offer for people in the states. This is always a good thing right after the recession, because it will help the recovery of the economy and provide more jobs for many people who lost their jobs during the recession. Due to the increase in numbers of jobs this will stimulate the economy, and also provide a more positive outlook on the States with the reduced amounts of greenhouse gas.
Reflection:
I believe that not only me but many other people think that this is a great direction the States is taking to reduce greenhouse gas. By putting his attention on Siemens Energy plant, the president has truly shown people that he is serious to a more clean energy future. In my opinion I believe that this is a smart move because, the president will not only have gain the respect of the environment friendly people of America, but also strengthened or gave birth to a new market for future companies to look at. As I have stated above, I believe that a clean energy future would cost money and therefore provide many more jobs.
http://theenergycollective.com/TheEnergyCollective/64301
President Obama went to visit a Siemens Energy plant in Fort Madison, Iowa. This company makes blades for wind turbines and is an eco-friendly Company that received about $3.5 million in tax credits through the 2009 Recovery act stimulus. The reason the president went to Fort Madison is to give a speech stating that he is planning on “staking America’s future on a clean energy future.” President Obama continues his speech and expresses how impressed he is by how the plant has developed since the past few years. He is furthermore impressed by the amount of jobs this plant has offered this high unemployment city, with more than 600 employees. The President also stated that Siemens will be a foundation that would lead to a long term growth and prosperity. It is obvious that the president has high hopes for this company and plans to decrease the amount of greenhouse gas emitted from the States.
Connection:
With the goal of “staking America’s future on a clean energy future,” it is obvious that there will be large cost involved to begin the operations necessary for this goal. This would definitely mean there are more jobs to offer for people in the states. This is always a good thing right after the recession, because it will help the recovery of the economy and provide more jobs for many people who lost their jobs during the recession. Due to the increase in numbers of jobs this will stimulate the economy, and also provide a more positive outlook on the States with the reduced amounts of greenhouse gas.
Reflection:
I believe that not only me but many other people think that this is a great direction the States is taking to reduce greenhouse gas. By putting his attention on Siemens Energy plant, the president has truly shown people that he is serious to a more clean energy future. In my opinion I believe that this is a smart move because, the president will not only have gain the respect of the environment friendly people of America, but also strengthened or gave birth to a new market for future companies to look at. As I have stated above, I believe that a clean energy future would cost money and therefore provide many more jobs.
http://theenergycollective.com/TheEnergyCollective/64301
Monday, April 12, 2010
Chapter 15- Northgate Minerals enjoys successful fourth quarter
Summary:
Northgate Minerals has earned revenue of $41.5 million with a net income of $27.9 million during the fourth quarter. This company also produced 80,753 ounces of gold and 11.8 million pounds of copper with an average cost of $537 per ounce of gold. They then sold 78,015 ounces of gold for $1,181 per ounce and 10.4 million pounds of copper for $3.54 per pound. In total, Northgate has earned revenue of $186.2 million and a net income of $73.2 million during year 2009. They produced a record of 362,398 ounces of gold during this year. As for the expenses, the average cost of the whole year was $477 per ounce. By the end of the year, Northgate had a cash balance of $235.5 million. They then extended the mine life Kerness South by one year and allowed $2.6million for the exploration at the Young Davidson mine. This budget goes towards funding the extensive drillings required for the exploration at this new mine. Young Davidson is said to have a 15 year mine life and is able to provide Northgate with 180,000 ounces of gold per year which is around revenue of $1.2billion. This mine is expected to start running in 2012.
Connections:
Ratios are used in chapter 15.3 which could be used for this company too. The ratio that relates to this chapter is rate of return on net sales. It is shown on the textbook that rate of return on net sales is equal to net income divided by net sales times 100. This would make Northgate’s rate of return on net sales 67.2% for the fourth period and 39.3% for the whole year. The textbook also mentioned that comparing this figure with other years gives an indication of how well a company is performing. Although the fourth period is still part of the whole year, it is obvious that Northgate has done better than any other quarter during the fourth quarter with a high rate of return on net sales of 67.2%.
Reflection:
Over the past year, I have seen many companies that did bad during the recession in my Money Management class. Just last week, when everyone did a accounting presentation companies, it is obvious that most of them were barely surviving. Therefore I am positive that Northgate has been a really successful company over the past years and it is a promising stock to invest in. However I believe that this company will struggle a little for the next half year due to the construction of the Young Davidson mine. This mine has excellent growth potential and could end up making this company a lot of money. However they would need to borrow loans and accumulate a lot more expenses in order to get this mine set up. Therefore I think it would not be wise to invest in this company yet until the Young Davidson mine is up and running.
http://www.northernnews.ca/ArticleDisplay.aspx?e=2504816
Northgate Minerals has earned revenue of $41.5 million with a net income of $27.9 million during the fourth quarter. This company also produced 80,753 ounces of gold and 11.8 million pounds of copper with an average cost of $537 per ounce of gold. They then sold 78,015 ounces of gold for $1,181 per ounce and 10.4 million pounds of copper for $3.54 per pound. In total, Northgate has earned revenue of $186.2 million and a net income of $73.2 million during year 2009. They produced a record of 362,398 ounces of gold during this year. As for the expenses, the average cost of the whole year was $477 per ounce. By the end of the year, Northgate had a cash balance of $235.5 million. They then extended the mine life Kerness South by one year and allowed $2.6million for the exploration at the Young Davidson mine. This budget goes towards funding the extensive drillings required for the exploration at this new mine. Young Davidson is said to have a 15 year mine life and is able to provide Northgate with 180,000 ounces of gold per year which is around revenue of $1.2billion. This mine is expected to start running in 2012.
Connections:
Ratios are used in chapter 15.3 which could be used for this company too. The ratio that relates to this chapter is rate of return on net sales. It is shown on the textbook that rate of return on net sales is equal to net income divided by net sales times 100. This would make Northgate’s rate of return on net sales 67.2% for the fourth period and 39.3% for the whole year. The textbook also mentioned that comparing this figure with other years gives an indication of how well a company is performing. Although the fourth period is still part of the whole year, it is obvious that Northgate has done better than any other quarter during the fourth quarter with a high rate of return on net sales of 67.2%.
Reflection:
Over the past year, I have seen many companies that did bad during the recession in my Money Management class. Just last week, when everyone did a accounting presentation companies, it is obvious that most of them were barely surviving. Therefore I am positive that Northgate has been a really successful company over the past years and it is a promising stock to invest in. However I believe that this company will struggle a little for the next half year due to the construction of the Young Davidson mine. This mine has excellent growth potential and could end up making this company a lot of money. However they would need to borrow loans and accumulate a lot more expenses in order to get this mine set up. Therefore I think it would not be wise to invest in this company yet until the Young Davidson mine is up and running.
http://www.northernnews.ca/ArticleDisplay.aspx?e=2504816
Wednesday, March 24, 2010
Chapter 14- Delta cops shut down high-tech card cloners
Summary:
Robert Boucher and Lelitia Cominetti, both of Delta, were identified as suspects who fraudulently created and cloned credit cards. Const. Sharlene Brooks of the Delta Police who caught them found a loaded handgun and a crossbow along with the high-tech gadgets used to manufacture the credit cards. The two suspects used the cards in situations where signatures weren’t necessary. One thing they did was buy large amounts of gasoline then sold it and immediately went back for more. Insp. Karre Coupar quoted that the suspects were very intelligent and if that intelligence were to be used on an honest business then they would do really well. The pair faced multiple charges, mainly for fraudulent credit card cloning and the procession of dangerous weapons. As a result they are forced to remain in custody and Cominetti is to appear in court on March 26th, while Boucher on April 1st.
Connection:
This article is connected to chapter 14.2 where they talk about credit cards. The book stated that a bunch of procedures is required in order for a customer to buy on credit. However, in this case the suspects didn’t need to go through all these procedures and no signature was needed. This allowed the suspects to successfully commit fraud. On the other hand, this case did follow the book with the credit card charges. The retail still receives quick payment and a charge from the credit card company just like the book stated.
Reflection:
I believe that this case was a very unfortunate event. As stated by Karre Coupar, the two suspects could have used their knowledge for a greater cause. With their intelligence, they could have earned a lot of money in the business world, but instead they used it for fraud. This kind of fraud ultimately affects retailers and consumers like us. In order to cover the cost of the fraud, credit card companies would have to increase interest rates, which would eventually be covered by retailers paying credit card companies for credit use. With more theft expense, retailers would have to raise prices on products for sale in order to cover their losses. Although in this case, cloned credit cards caused a lot of trouble and scams, I still believe that credit cards are an efficient and useful invention.
http://www.theprovince.com/news/fraservalley/Delta+cops+shut+down+high+tech+card+cloners/2719570/story.html
Summary:
Robert Boucher and Lelitia Cominetti, both of Delta, were identified as suspects who fraudulently created and cloned credit cards. Const. Sharlene Brooks of the Delta Police who caught them found a loaded handgun and a crossbow along with the high-tech gadgets used to manufacture the credit cards. The two suspects used the cards in situations where signatures weren’t necessary. One thing they did was buy large amounts of gasoline then sold it and immediately went back for more. Insp. Karre Coupar quoted that the suspects were very intelligent and if that intelligence were to be used on an honest business then they would do really well. The pair faced multiple charges, mainly for fraudulent credit card cloning and the procession of dangerous weapons. As a result they are forced to remain in custody and Cominetti is to appear in court on March 26th, while Boucher on April 1st.
Connection:
This article is connected to chapter 14.2 where they talk about credit cards. The book stated that a bunch of procedures is required in order for a customer to buy on credit. However, in this case the suspects didn’t need to go through all these procedures and no signature was needed. This allowed the suspects to successfully commit fraud. On the other hand, this case did follow the book with the credit card charges. The retail still receives quick payment and a charge from the credit card company just like the book stated.
Reflection:
I believe that this case was a very unfortunate event. As stated by Karre Coupar, the two suspects could have used their knowledge for a greater cause. With their intelligence, they could have earned a lot of money in the business world, but instead they used it for fraud. This kind of fraud ultimately affects retailers and consumers like us. In order to cover the cost of the fraud, credit card companies would have to increase interest rates, which would eventually be covered by retailers paying credit card companies for credit use. With more theft expense, retailers would have to raise prices on products for sale in order to cover their losses. Although in this case, cloned credit cards caused a lot of trouble and scams, I still believe that credit cards are an efficient and useful invention.
http://www.theprovince.com/news/fraservalley/Delta+cops+shut+down+high+tech+card+cloners/2719570/story.html
Saturday, January 16, 2010
2010 Payroll Software Adds New Features For Small Businesses, Accountants and Payroll Service Providers.
Summary:
Real Business Solutions Inc. is a leading provider of Payroll solutions who recently released a new payroll accounting software called the 2010 Payroll Mate. Payroll Mate is a software that focuses only on payrolls. This new software offers fully automated payroll processing functions and with new “General Ledger Export” report, Payroll Mate now support exporting data to other accounting software. Another advantage this software has to offer is the ability to export payroll data to QIF file. This is useful to users or potential users who recently moved from Quickpayroll to Payroll Mate. Payroll Mate is also useful to people from the States because state disability insurance tax is now a built in tax category in the product.
Connections:
This relates to accounting because in chapter 12.4, it talks about accounting software. Although this software isn’t an ACCPAC, it is still closely related to this chapter. This new accounting software concentrates on only the payroll transactions, and therefore should do its job much more efficiently then a normal account software. It also has a new efficient feature to not only export the payroll check totals but also export detailed payroll information to the general ledger. This would also greatly affect accountants especially accountants in the States because it would help organize payroll accounts and prevent silly math mistakes that people usually make.
Reflection:
I believe that this new accounting software would be a major help to many companies especially to businesses in the States. This program is based on State taxes and not Provincial taxes and therefore this program would never be useful to Canadians. Also, if I were to have my own company, I think that this program wouldn’t be necessary. Simple accounting programs like “Simply Accounting” or other ones already have the payroll function included in them. Therefore I don’t think I would need a specialized accounting program until my company becomes really big and we require this specialized payroll software. One thing I learned from this article is when I actually make my own company and I decide to buy my own software, I should always look at the built in tax category to see if the product matches my provincial tax.
http://www.24-7pressrelease.com/press-release/2010-payroll-software-adds-new-features-for-small-businesses-accountants-and-payroll-service-providers-the-professional-payroll-program-now-includes-everything-needed-to-process-payroll-inhouse-132134.php
Real Business Solutions Inc. is a leading provider of Payroll solutions who recently released a new payroll accounting software called the 2010 Payroll Mate. Payroll Mate is a software that focuses only on payrolls. This new software offers fully automated payroll processing functions and with new “General Ledger Export” report, Payroll Mate now support exporting data to other accounting software. Another advantage this software has to offer is the ability to export payroll data to QIF file. This is useful to users or potential users who recently moved from Quickpayroll to Payroll Mate. Payroll Mate is also useful to people from the States because state disability insurance tax is now a built in tax category in the product.
Connections:
This relates to accounting because in chapter 12.4, it talks about accounting software. Although this software isn’t an ACCPAC, it is still closely related to this chapter. This new accounting software concentrates on only the payroll transactions, and therefore should do its job much more efficiently then a normal account software. It also has a new efficient feature to not only export the payroll check totals but also export detailed payroll information to the general ledger. This would also greatly affect accountants especially accountants in the States because it would help organize payroll accounts and prevent silly math mistakes that people usually make.
Reflection:
I believe that this new accounting software would be a major help to many companies especially to businesses in the States. This program is based on State taxes and not Provincial taxes and therefore this program would never be useful to Canadians. Also, if I were to have my own company, I think that this program wouldn’t be necessary. Simple accounting programs like “Simply Accounting” or other ones already have the payroll function included in them. Therefore I don’t think I would need a specialized accounting program until my company becomes really big and we require this specialized payroll software. One thing I learned from this article is when I actually make my own company and I decide to buy my own software, I should always look at the built in tax category to see if the product matches my provincial tax.
http://www.24-7pressrelease.com/press-release/2010-payroll-software-adds-new-features-for-small-businesses-accountants-and-payroll-service-providers-the-professional-payroll-program-now-includes-everything-needed-to-process-payroll-inhouse-132134.php
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