Advanced Financial Accounting (Essay Sample)

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Professor
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Advanced Financial Accounting
Operation of Emerson Electric in the industry
Emerson Electrical is an industrial institution that operates in five primary business segments. The areas include process management, industrial automation, Network Power, Climate Technologies, and Commercial and Residential Solution. By definition, the purchase of one company by the other usually leads to the existence of value earned goodwill. The amount paid by the acquiring company for the company targeted over the book value account for the value of the target’s goodwill. If the acquiring company pays less than the target’s book value, it gains negative goodwill. It implies that it purchased the company at a bargain in a distress sale. The fundamental outlook for the S&P Electrical Components % Equipment sub-industry is neutral. Valuation for the group is below historical averages, likely a reflection of slowing growth around the globe. The results are, however, expected to grow, with new orders increasing as short-and mid-cycle product benefit from higher overall demand in 2013. The consideration was majorly on the sub-industry that focused on the production of electrical cables and wires, electrical equipment, and solar power system. The rate of growth in the sub-industry group is stabilizing, following several months of slowing. In comparison to their industry, Emerson Electrical has above average goodwill intensity in relation to their growth in the line of their operation. The lowest impairment amount was recorded in the year 2003 since 2008 Kothari (Jagdish & Elisabetta 12).
At the height of the financial crisis, and is also consistent when a benchmark was conducted. However, an improvement was realized in the subsequent years accompanied by an exceptional performance by the stock market. In fact, the S&P 500 index level surged by 30% in 2013, its biggest annual advance from a period that dated 1997 in percentage terms. The evolution of goodwill can be captured from2009 through 2013, and proper evidence can be depicted in terms of the interest rates. The deal summary managed to provide the relevant source of goodwill indicating both the number of sales and value for transactions involving a controlling interest of 50% or more. For the Fiscal year provided, the company experienced a loss in their goodwill intensity. Based on the criteria, deal activity saw a decline in both volume and value in 2013. The analysis can be evidenced by the number of closed sales shrank that was at 9%. The transaction value decreased by a sharp 47%, leading to a drop in additional goodwill recorded on balance sheets from $211 billion in 2012 to $147 billion in 2013. The Goodwill Activity bar chart shows the annual aggregate growth, as well as the amount of goodwill added annually, with the end-of-year total goodwill balance sliding along the scale. Notably, 2013 marks the lowest total impairment value since the level reported in 2008, at the height of the financial crisis.
The segment that generated the highest income
During the particular period, revenues for the year increased by 8% recording a value of $48.8 billion. At the same time, Net income for the year also increased by 22% to record a value of $7.5 billion. The increase in the relevant account can be linked to the level of increase in Diluted earnings share (EPS) from 26% to record $4.26 compared to $3.38 in the prior year. BURBANK, Calif was the segment that impressed the part by producing the highest revenue. The earnings reported earnings for its fourth quarter and fiscal year ended September the same year.EPS for the same year is recorded to have increased from 12% to $0.86 from $0.77 in the prior-year quarter. Certain factors affecting comparability was however excluded in the whole process. Excluding certain items affecting comparability, EPS for the monetary value during the year increased 27% to $4.32 from $3.39 in the previous year Lewis (Richard & David 19). The result for Fiscal year 2014 was the highest in the company’s history. It was reported that it marketed the fourth consecutive year of record performance. The result was an achievement to the management, and it reflects the extraordinary quality of the scope and the creativity ability of the company to adequately outline its success factors and values. Through the achievements, it was the focus on embracing and adapting to emerging consumer trends and technology. In the company, a decrease in the weighted average shares outstanding influenced the performance. The improvement in all result of our share repurchases program and higher investment gains. Growth at the domestic Disney Channels was contributed by lower marketing and programming costs and higher affiliate revenue driven by contractual rate increases. Lower marketing costs reflected decreased affiliation advertisement tools. It was supported by the lack of a prior-year cost that was of importance and to launch the company's apps. The cost for programming was also a major contributor in the realization of the above improvements.