Chapter 6

Summary:

http://www.cbc.ca/canada/nova-scotia/story/2009/05/12/nb-lobster-industry-337.html

The Global Economic Crisis from last year had brought a huge change and difficulties of various industries all over the world. The Lobster Industry in New Brunswick is also being greatly affected on. Between 300 and 400 jobs have been lost in northern New Brunswick, mainly in the fish processing sector, said the executive secretary of the Maritime Fishermen's Union. The price of fish also dropped dramatically to 2.75 dollars a pound. This is exactly the lowest price in decades. The industry called an urgent meeting with the government to tell them that they need a short term investment of the government in order to lift industry up and avoid bankruptcies. However, the government has no plans for immediate financial assistance of the industry.

Connections:

The cash, short-term investments and receivables could affect greatly on the financing and operating activities of industries. This is because they are the most liquidity assets and companies could use them when ever they want to. It helps the company to expand and keep its operation. The concept is obviously being shown in this news. The Lobster Industry in NB is experiencing a possibility of bankruptcy because of the presence Economic Crisis not long ago. Many workers in the fish processing sector have lost their jobs. The company also is experiencing the lowest price of the fish they are selling ever. The executive secretary of the Maritime Fishermen's Union was hoping that the government could make a short – term investment in the company in order to pull it out of the difficulty, or at least help it out of bankruptcy.

Reflection:

The Economic Crisis has a long – term affect all over the world. Even though the crisis was being caused by America, it is not the only victim of the crisis. Canada has a very close bond with America in economics before, and after the Great Depression toke place after WWII, Canada had been carefully grows independent from America. Even though the Economic Crisis in America has not affected Canada as deeply as the Great Depression, it still has an effect on Canada’s industries. The Canadian government would surely want to help the industries. But the question is, do they have the money to help? Are they, themselves being involved in the Economic Crisis? Can they save themselves? If they do have the money, why would they refuse to make a assistance for the Lobster Industry?

Chapter 5 (Accounting News)

http://www.forbes.com/feeds/afx/2009/04/06/afx6257611.html

Summary:
GM's Saab will seek to write off three quarter of its unpriorited debt inorder to boost its cash flow statement to make a positive amount by the year 2011. The news basically talked about the company had several meetings and tried to find out the solution to boost its cash flow. The company wishes that based on written off the debts, they will have a positve cash flow by the year 2011 and also have a great amount production of cars in return.

Connections:
The Cash Flow Statement theory had provided us that if a company's amount of cash flow is greater than the amount of Income Statement, then we will consider the company's earnings to be of high quality. But if the cash flow is less than the net income, we consider the earnings to be low quality. Based from this theory, we could easyly tell how imporant the cash flow statement is for a company's operating system; even more imporant than the revenues itself sometimes. Maybe from this point you are wondering what a Cash Flow or a Cash Flow Statement is. The definition text book gave us is: the net change in cash that occurs from the beginning of an accounting period to the end of the period. And the cash flow statement must go at the similar rate with the income statement, if not, the company might be losing money or have a low quality earning. The news "GM's Saab seeks debt write-down to boost cash flow" showed us how hard the company had tried to boost its cash flow. The company's operting, financing and investigating rate all goes with the cash flow statement. The court-appointed aministrator of GM's Saab had clearly stated out that the company will seek to write off 3 quarters of unpriorited debt inorder to boost its cash flow, and of course, make the company in a better level.

Reflection:
It is very imporant for a company in Financing Crisis time to get a positive cash flow statement. But it is very hard and risky to make decision that will shift its cash flow. The company had found a solution to boost its cash flow, even though we are not that sure by now if the method is really going to work. I personally think it is a great decision that the company made. Their decision might be wrong, but at least they tried. They already had a negative cash flow and a little more lossing won't change much. But if they are successful of their new method, they could have a high earning quality. They could make better products, make more money from it, and becoming better will be the trend of the company in the future.

Chapter 4 (Accouting news)

http://www.localnews8.com/Global/story.asp?S=9857664&nav=menu554_1_1

Summery:

This is a news about the State lawmaker need to cut another $320 million from their budget. This means they could predict that their revenue keep decreasing. The revenue of the state will be decreased by $171 million from the current fiscal year, and also, $320 million from the fiscal year that begins at July 1.

And Gov. Jon Huntsman's also stated that their budget will keep decreasing by $900 million from last year; the lawmakers also decided to cut every state agency's budget by about 15%.




Connection:

This news shows a clear relationship with the Economy Depression in America. As an result of the Economy Depression, America could not make enough income in order to keep the country work well. Many workers lost their jobs. This leads the society to a disaster such as: companies don't have enough people to work for it, many factories could not continue to operate. Many schools and community centres got closed. Children could not get the education they should get, people could not have a healthy exercise at the community centre.




Reflection:

The dramatic decreasing of the state budget also is another example of the Economic Depression in America. From December of 2008. America's economy kept sliding down. The caused many inconveniences for the people. Many workers lost their job; some school, factories and shops even got closed. The decline in America's economy also caused a world wide affect. In China, many new graduates (even with a master degree) could not find job. Many workers had lost their jobs. Many houses could not be sold, and many companies went bankrupted. This is a serious problem and as the news state out, if the state continue to go down hill, it will went into a disaster eventually.