Indicate the Effect of the Following Transactions On

question 36

Essay

Indicate the effect of the following transactions on:
i.Return on net operating Assets (RNOA)
ii. Return on common stockholders equity (ROCE)
iii. Earnings per share (basic)
Consider each transaction independently and explain your answer. Assume that ROCE is higher than RNOA.
Company issues more preferred stock and uses proceeds to reduce accounts payable
Company has a stock split
Company converts to just-in-time inventory system (JIT). This allows them to hold half the levels of inventory for the same amount of sales (sales themselves are not increased by this change to JIT).

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Definitions:

Flow

In psychology and user experience, a state where people are fully immersed and focused on what they are doing.

Logistics Management

The process of planning, implementing, and controlling the efficient, effective flow and storage of goods, services, and related information from point of origin to point of consumption.

Point of Origin

The location or source from where a product, service, or shipment begins its movement or is created.

Point of Consumption

The place or moment where a product or service is actually used or consumed by the end user.