Accounting Principles (GAAP) Are Important Essay

Open, View, and/or
Download this Document

Total Length: 598 words ( 2 double-spaced pages)

Total Sources: 1+

Page 1 of 2

However, net income has more extraordinary items included, which means that for Kraft cash flow from operations is the more accurate of the two.

I predict that Unilever will continue along its steady growth path. The company has grown slowly but steadily in revenues in the past five years, averaging 2.2% growth in that span. Given the challenges in the economy, I also predict that Unilever will increase its debt level. The balance sheet shows that the company increased its debt in 2008, to the highest level since 2005. This reflects difficult operating conditions. The 2009-year was also expected to be difficult, and this will reflect mainly on the balance sheet, rather than on revenues.

For the past two years, Kraft has held its COGS and its SGA expenses stable as a percentage of revenues.

Stuck Writing Your "Accounting Principles (GAAP) Are Important" Essay?

View All Our Example Accounting Principles (GAAP) Are Important Essay

Have A Custom Example Essay Written

This has allowed the company to have bottom line stability as well. I predict that this will hold for the coming year or two as well. This will likely result in cuts to SGA expenses in particular, as these will match the decline in revenues. The other prediction for Kraft is that the company's equity will continue to decline. The balance sheet shows that Kraft has lost equity four years running. This has forced the company to take on more debt, increasing its debt ratio from 14.7% in 2005 to 29.4% in 2008. Given the prediction of unfavorable global consumer spending, Kraft will continue to take out debt in order to finance its growth.

Works.....

Show More ⇣

     Open the full completed essay and source list


OR

     Order a one-of-a-kind custom essay on this topic


sample essay writing service

Cite This Resource:

Latest APA Format (6th edition)

Copy Reference
"Accounting Principles GAAP Are Important" (2009, December 26) Retrieved May 16, 2025, from
https://www.aceyourpaper.com/essays/accounting-principles-gaap-important-16034

Latest MLA Format (8th edition)

Copy Reference
"Accounting Principles GAAP Are Important" 26 December 2009. Web.16 May. 2025. <
https://www.aceyourpaper.com/essays/accounting-principles-gaap-important-16034>

Latest Chicago Format (16th edition)

Copy Reference
"Accounting Principles GAAP Are Important", 26 December 2009, Accessed.16 May. 2025,
https://www.aceyourpaper.com/essays/accounting-principles-gaap-important-16034
   

Open, View, and/or
Download this Document
order custom essay example