A Review of ACCNerd.com

ACCNerd.com. Any Good?

Many of my readers have asked me what they think of ACCNerd, which provides accounting help to online students in Phoenix, AZ.I have taken some time to talk with the published and review their tutoring products.

First Impressions

At first glace, I thought the site was pretty boring. There is not a whole lot of fancy design work on the website, but I guess that does not really matter. A few things I do like is their secure shopping system through shopify. This is a big plus over sites that use PayPal. I also really like that they give you the chance to preview every document before you buy it. I do not know of many other websites that offer this.

Quality work? 

For this review I was provided tutorials in ACC 291 and STR 581. After performing a thorough review, I found that the content was spot on. Not only do these tutorials provide the answers you need, but they also teach you how to learn the concepts in the future. This is great because you will not need to ask for help on future assignments. The final exam answers were also very comprehensive and all contained within one document. This benefits students because they do not need to search through multiple documents which is a big waste of time.

Final Grade

My final grade for ACCNerd.com would have to be an A. This is the highest quality of work I have seen on a tutoring website.  Although the amount of work is limited, they do a great job at helping online accounting students.

The Difficulty of Business Research

Becoming great at finance requires that you also become great at business research. One of the toughest online courses out there is known as RES 351 - Business Research, which is often taken by University of Phoenix students. To ace this class you will need to study hard and you might even need to look for some outside help. At the finance press we are committed to share some of the best resources that are out there for those who aspire to work in the finance industry. First, we recommend checking out resources like Investopedia to round out your knowledge about finance, research, accounting, and other business topics. However, if this is not enough, we recommend that you get an edge on your classmates by getting a copy of the RES 351 final exam study guide. This is a great and affordable tool for anyone taking this course. In either case, you will find that these resources will help you reach the ultimate goal for a high paying career in finance. It's a highly competitive field, but with the right motivation and support network in can be achieved by any ambitious person.

Initial Public Offering (IPO) Explained

What is an Initial Public Offering (IPO)? How does it help a company grow?

An Initial Public Offering (IPO) refers to the first time that an organization sells stock to the general public. An IPO allows an organization to sell securities in exchange for cash to invest in new projects. These securities provide funds for the organization to invest but require a rate of return to investors, which will be a future cost to the organization. An IPO allows an organization to grow financially because it provides immediate funds for the organization to use for new projects that will produce revenue-generating assets. This immediate availability of funds allows the organization to grow more rapidly than it would be able limited to its own revenue generating capabilities and limited access to immediate funds necessary to implement new projects.

A merger or acquisition may be a more appropriate way to grow due to combination of resources, tax benefits, debt potential, and market power. An IPO provides immediate cash to an organization but may not provide a significant advancement in the current stance of the organization. A merger or acquisition may provide the ability for an organization to eliminate ineffective management, combine resources, and utilize similar trade conduits. This restructuring may allow the organization to increase its financial position without using outside resources. The increase in size and unused debt potential associated with a merger may provide tax benefits that the two separate organizations did not receive that provide a significant savings for the organization. Finally, the merger may provide a significant increase in market share that increases the revenue of the organization faster than an IPO alone. Ultimately, acquiring or merging with another organization that already has projects and a structure in place that the other organization is looking at establishing can allow the organization to expedite their stance without using an IPO.

Weighted Average Cost of Capital WACC

What is the Weighted Average Cost of Capital?

The weighted average cost of capital assignes a weight proportional to the firms capital structure. That is, a percentage of each type of capital owned by the firm. For example, if the firm has $250 in bonds, $250 in preferred stock, and $500 in common stock, the weights would by .25, .25, and .50 respectively. This allows the firm to establish a benchmark as to what discount or rate of return is neccessary to cover both debt and equity required rates of return. Sometimes companies will use exact dollar figures to caculate these weights; however, many companies simply use the percentages as weights.

The components of WACC are both debt and equity financing. It is calculated by multiplying the after-tax cost of debt times the proportion of debt financing plus the cost of equity times the proportion of equity financing. The reason the WACC is more appropriate for capital budgeting is because, as stated previously, it gives the firm an idea of the amount or discount rate require to satisfy the required rate of return on both debt and equity securities held by lenders and shareholders.

When a organization needs to raise long-term capital, oftentimes this capital will be mixed with other sources of capital. Therefore, calculating the NPV using the correct discount rate may be difficult. However, WACC makes possible such calculations, especially when dollar amounts are used as opposed to percentages.

Definition of Working Capital

How would you define working capital? What could happen if an organization neglected to manage its working capital?

What working capital techniques would you recommend for your organization? Why?

Working capital is a firm's current investment in assets or assets expected to be turned into cash in less than one year. This definition is not as familiar as the term net working capital that refers to the difference between a firm's current assets and current liabilities. The text states that many people state use the term working capital even though they are referring to net working capital, which is the case for my organization. If an organization was to neglect its working capital, then the organization could find itself with greater current liabilities than it is able to repay. Additionally, the interest rate for short-term liabilities can fluctuate making it difficult to plan or manage effectively.

The working capital techniques that I would recommend to my organization are the hedging principle and TVM. The hedging principle follows that short-term liability requiring financing should come due at the same time the assets purchased with that financing produce cash flow for the organization. The TVM follows that when there is excess capital the organization should invest those funds to strengthen their position for times when financing may be needed. The investments should be in securities that can be made available as needed. The use of these techniques can help the organization grow funds and eliminate unnecessary short-term liabilities. The use of these methods require the organization to be pro-active in their monitoring practices.

What is the Breakeven Point in Finance?

The breakeven point refers to the amount of goods or services an organization must provide during a given period in order for receipts and disbursements to be equal. Any organization is concerned about how much money they are going to have to make in order to breakeven. This breakeven point is different depending on the industry but is a crucial point in setting a goal for the organization to achieve. For example, the breakeven point refers to how many videos the local video store must rent in order to cover operating expenses for the month or how many cars a car dealer must sell to cover their operating expenses. A company not reaching their breakeven point is operating in the red while a company that reaches the breakeven point will begin operating in the black.

The breakeven point is crucial for a business to know. This breakeven point allows a business to determine the point at which to set prices for their goods or services based on supply and demand and to set marketing and sales goals to reach levels at that point or higher. The breakeven point helps a business determine appropriate sale volume, capital purchasing needs, and financing decisions. A business that is deciding whether to make changes to the current cost/sales structure associated with a good or service can use various strategies to determine whether the change will increase or decrease the breakeven point of the item. The breakeven point may provide insight to the business about whether the change is a good one for the organization to make or not.

The Time Value of Money

How is TVM used in business?

The time value of money is the concept that money received today has a greater value that money received in the future. This is true because money you have today can be invested, which can appreciate or earn interest. The calculations of the time value of money are important because they give companies the ability to compare investment options. This can help improve return on equity and increase shareholder wealth. The most simple example of the time value of money is a savings account. When a person deposits money into a savings account it will generate interest. This simple opportunity makes money worth more now than it would be in the future. TVM is calculated by comparing the future value of money (FV) to its present value (PV). This can be used to determine the present and future value of annuities, as well as simple interesting earning accounts, such as the saving account. When making calculations it is important that the correct discount rate is used. If the rate is not accurate it will cause the resulting calculations to be inaccurate as well. The formulas for present value and future value can be arranged to solved for any variable in the equation.