Essay about Nike Stock Analysis - 844 Words

â€Å"On January 25, 1964 Nike, formerly known as Blue Ribbon Sports was founded by Bill Bowerman and Phillip Knight. It officially became Nike Incorporated on May 30, 1978†(Nike Business). During the late 70s to early 80s Nike’s initial focus was Track and Field but later expanded into various sports such as : soccer, golf, hockey and basketball just to name a few.† In 1980, Nike entered the decade on the success of its Nike Air technology, and at the end of that year Nike completed its initial public offering (IPO) and became a publicly traded company on the New York Stock Exchange. The reason for going public was typically viewed as a means of raising addition capital without having to borrow, and also increase the company’s profile by†¦show more content†¦Apparel will be a big part of Nike’s overall focus as they believe they can be on par with their footwear department. Footwear will also receive some attention as Nike wants to impro ve their range in that department†(Nike Business). â€Å"Nike Inc. has 12 members on the Board of Director; this includes Phillip Knight who is the co founder and chairman of the board, and Mark Parker who is the CEO. The CEO is evaluated typical by the Compensation Committee. This committee considers (1) achievement against approved financial performance measures and company targets such as revenue, net income and earnings per share. They also consider other factors such as leadership, market position, and brand strength, which are signals of company success. The CEO’s performance is then reflected in the amount of compensation he receives†(Nike Business). Nike Inc. has no major ongoing litigation During the 2011 fiscal year, Nike seemed to have a down year compared to 2010 as seen in Figure 1.1: Period Ending May 31, 2011 May 31, 2010 Net Income 2,133,000 1,907,000 Depreciation 358,000 396,000 Adjustments To Net Income 29,000 167,000 Changes In Accounts Receivables (273,000) 182,000 Changes In Liabilities 151,000 297,000 Changes In Inventories (551,000) 285,000 Changes In Other Operating Activities (35,000) (70,000) Total Cash Flow From Operating Activities 1,812,000 3,164,000 Capital Expenditures (432,000) (335,000) Investments (560,000) (932,000)Show MoreRelatedCase Study on Nike1252 Words   |  6 PagesCase Study Nike Introduction Good morning ladies and gentlemen and thank for taking the time to meet with us. Nike was founded on January 25, 1964 as Blue Ribbon Sports by Bill Bowerman and Philip Knight. The company officially became Nike, Inc. on May 30, 1978. Nike has various products which include footwear as well as other apparel that compliment the former. This accounts for 92 percent of the company’s revenue. The other 8 percent comes from equipment and non Nike brand products, such as ColeRead MoreA Portfolio Managers Analysis of Nike Inc. Essay1029 Words   |  5 Pagesdifficult decision to make while looking at Nike Inc. financials: whether Kimi should buy Nike shares or not for the fund Group she was working for. Kimi needed to consider all aspects of Nike Inc. financial position. On July 28,2011 Nike Inc. held a analyst’s meeting to disclose their fiscal year 2001 as well as to revitalize the company who wasn’t performing well. Thus, the meeting showed that Nike Inc. experience d some difficulties during the past years. First, Nike Inc. revenues have reached a plateauRead MoreNike Case Study1542 Words   |  7 Pagesinvesting in the stocks of Nike for the fund that she manages. †¢ Ford should base her decision on data on the company which were disclosed in the 2001 fiscal reports. While Nike management addressed several issues that are causing the decrease in market sales and prices of stocks, management presented its plans to improve and perform better. †¢ Third party sources also gave their opinions on whether the stock was a sound investment. WACC CALCULATION: Cost of Capital Calculations: Nike Inc CohenRead MoreCase Study : Ford Corporation, And Nike Corporation Essay859 Words   |  4 Pagesselected for this project were Microsoft Corporation, Ford Corporation, and Nike Corporation. Their company symbol which is exhibited by the National Association of Securities Dealers Automated Quotations (NASD) and New York Stock Exchange (NYSE) for Microsoft is MSFT, for Ford is (F) and Nike is NKE. Financial Results of Investment The companies that I selected for this project were Microsoft Corporation, Ford Corporation, and Nike Corporation. Their company symbol which is exhibited by the National AssociationRead MoreCapital Structure1215 Words   |  5 PagesInformation My company choice is Nike Inc. (Nike), a multinational sports footwear, equipment and apparel manufacturing company based in Oregon, United States. This puts Nike in the apparel industry. In 2010, Forbes rated Nike as the top sports business with a total value of $10.7 billion. The most effective marketing strategy Nike employ is the sponsorship agreements they have with numerous top athletes in a variety of sports. Operating Risks of Nike When Nike was initially started out, theRead MoreNike Case1172 Words   |  5 PagesNike Inc. Case 1. What is the WACC and why is it important to estimate a firm’s cost of capital? WACC is weighted average cost of capital, which is the expected rate of return on average from all the company’s existing debts and securities. It takes into account all different types of financing in the company’s capital structure. The reason it is important to estimate WACC is because it measures what it costs the firm to take on a project based on its current Debt and Equity mix. When theRead MoreEssay on Analysis of Nike Corporation1746 Words   |  7 PagesAnalysis of Nike Corporation Financial Analysis Description of Company History Nike Corporation has become one of the most competitive sports and fitness companies worldwide. Two runners, Bill Bowerman and Phil Knight, from a small town in Oregon embarked upon the business with a handshake agreement. The enterprise began in January of 1964 with the introduction of Blue Ribbon Sports. In 1966 the handshake between Bowerman and Knight was made official with a formal written partnershipRead MoreWhy Adidas And Nike Is The Best Choice For Me1643 Words   |  7 Pagesabout their histories. 1) Why Adidas and Nike? Two reasons lead me to make this choice. First of all, I am really fond of sport. I have been played soccer since ten years and always wear Adidas and Nike so it is two companies I know very well. Then, when I was thinking about which companies I was going to choose, I wanted two multinationals and one American company and one European company. So Adidas and Nike was the best choice for me. Today, Adidas and Nike are the two leaders of the sports marketRead MoreNike : The World s Most Successful Sportswear Industry1247 Words   |  5 PagesMiu Kataoka, Spencer Kim Cody Miyasato Principle of Finance – BUS 305 NIKE, Inc. Overview: Nike, founded in January 25 1964 by Bill Bowerman and Phil Knight, is the world’s largest sportswear designer holding a dominant position in the worldwide athletic footwear industry with a market share of 33%. It markets and distributes athletic footwear, apparel, equipment and accessories, constantly emphasizing on technological innovation, developing and manufacturing products that help reduce injury, maximizeRead MoreNike, Inc. Case Analysis844 Words   |  4 PagesNIKE, Inc., is a company that was founded in by William Jay Bowerman and Philip H. Knight in 1964, and was originally called Blue Ribbon Sports, Inc. It’s name was changed to Nike, Inc. in 1971. It’s base of operation is located in Beaverton, Oregon. NIKE, Inc., is the world’s leading designer, marketer and distributor of authentic athletic footwear, apparel, equipment and accessories for a wide variety of sports and fitness activities worldwide. Entirely owned Nike subsidiaries include Conv erse

Why Do Students Cheat - 997 Words

â€Å"It is not a question of who cheats, it is a question of who cheats the most†. If everybody does it then why does it matter if you cheat every once in a while to get by. If students successfully pull it off then they easily slip by on a test or homework assignment without having to do anything, giving them more time to do leisurely activities. The reason some students cheat is deeper than that most of the time, with college requirements becoming higher, students struggle to reach those requirements without a little help sometimes. Students resort to cheating due to GPA’s, the pressure, and the reward. To start, GPA’s are simple, the higher the grade you get the higher your GPA will be. To be able to play in any high school athletics a†¦show more content†¦Those big colleges that everybody has wanted to go to at least once in their life only accept kids with 4.2’s and a 34 or higher on the ACT. Some kids are looking at a 3.8 and havent taken the ACT yet thinking to themselves, how can i get my grades up so i can have a 4.2 so i can go to the college of my dreams with the least amount of work possible, and the answer is simple, to cheat. If they cheat they can bring their grades up causing their GPA to go up with it, and cheating takes less time than actually doing the homework giving the kids more time to study for the ACT to get a better score or to do the volunteer work that most of those colleges require. â€Å"The pressure to complete all of the work within the given time frame can make cheating look like a saving grace† (Wood). The list of pressur es to cheat is a mile long and can be checked off easily by cheating, and kids are always looking for the easy way out. Finally the rewards for cheating could make a list a mile long but there are a few that stick out. One big reward of cheating is it takes less time than actually studying, giving students more time to do leisurely activities and go out and be young and have fun. Students can get higher grades because of cheating, if they get a picture of a key they can get whatever score they want to bring their grade up. Their parents might give them money or presents for getting good grades. The pressureShow MoreRelatedWhy Do Students Cheat?1065 Words   |  5 PagesWhy do students cheat? It is a rare individual who actively chooses to be dishonest. But why do a few students make compromising choices? What can lead people to act in ways that they aren t proud of? Below are some underlying beliefs and confusions which students at Carnegie Mellon give as explanations for slipping standards of integrity. A Victimless Crime? Students generally are familiar with the disciplinary actions and penalties for getting caught. However, they may fail to understandRead MoreWhy Do College Students Cheat?1832 Words   |  8 PagesMarch 2008 Why Do College Students Cheat? Cheating among students in college has worsened over the years and not much is being done to stop it. Where is the line drawn when it comes to cheating in the classroom? And why do kids do it? In today’s world people are growing lazier and always looking for ways to do less work and a lot of that has to do with improved technology. Improved technology has also made cheating easier. Students can send each other e-mail’s back andRead MoreWhy Students Cheat : Cheating1469 Words   |  6 PagesWhy Students Cheat Cheating by students no matter their grade level has been a prevalent problem among schools for several years. One discouraging fact for academic institutions is that cheating has only gotten worse not better. Cheating can be carried out in a plethora of ways, such as copying off of other students during a test, copying another students homework, using a cell phone to either text answers or look them up, using crib notes or even copy and pasting whole written works and tryingRead MoreWhy Should Students From A Respected University Cheat?1014 Words   |  5 Pagesalways wonder why. Why would students from a respected university cheat? Who should we put the blame on? A lot of people are quick to assume that it is the student s personal morals, which causes them to cheat. I realized why a lot of student’s cheat, and how certain articles that I read, proposed we fix the cheating issue. The main goal is to prevent future cheating, and you start preventing cheating by looking at w hat the source of that cheating is. In the articles, â€Å"Harvard Students in CheatingRead MoreStudent Cheating And Its Effects On Society1138 Words   |  5 PagesStudent Cheating Academic dishonesty is a common concept that occurs in multiple institutions across the United States. A student who engages in academic dishonestly simply cheats on material but cheats by primarily plagiarizing their work. The bulk of students who cheat simply cheat by using technology. As technology advances, student cheating advances. Students are fixated with technology and technology, is a vast reason why cheating has became effortless to accomplish. However, that does not triggerRead MoreCheating on College Examinations980 Words   |  4 Pagesespecially college exams. Does it really happen? Sure it does. We argue that many college students cheat during examinations because of several reasons. They can be nervous that is why they cheat, it can also be a reason of time management wherein some college students also work while taking time to attend school classes or, maybe they are just lazy enough to study ahead of examination date. There are a lot of reasons why cheating on col lege exams happens and along with it, there are numerous effects outRead MoreThe Ethical Journey Of Views Of College Students891 Words   |  4 PagesMany students leave for college and are excited to begin a new journey or chapter in their life. Many had a long road to make it through high school while some found it easy. This paper will be discussing the Ethical journey of views of college students. What make some cheat while other are honest and how is cheating or academic dishonesty viewed by the American people. What are ethics and how they do apply to the college student, and how does the college student s apply it to the world. EthicsRead MoreIs Cheating At School Getting Out Of Control?872 Words   |  4 PagesControl? The clock is ticking at 1:00am and Joe is sitting in front of his computer trying to study for his Math test. â€Å"The test will be tomorrow at 7am. I don t understand any of this. I can’t even remember the formulas. What should I do?† Joe thought. But, why is he doing this at the last minute? Was it because of the addicting game â€Å"Battle Front† that he could not get enough of? Or, was it maybe because his girlfriend wanted to hangout yesterday? No matter how much he tried to makeup excusesRead MoreShould Cheating Be Academic Dishonesty? Essay1071 Words   |  5 Pagesconsequences yet many students continue to cheat. I do not find it surprising that students cheat in college or university. McCabe, Trevino Butterfield (2001) offer many explanations as in why students commit academic dishonesty, such as peer influences. Although the findings of this study still can be applied today I argue a new study should consider the use of technology in regards to a cademic dishonesty. With the rise of technology, it has become much easier for students to cheat on exams and papersRead MoreThe Effects Of Academic Cheating On Students888 Words   |  4 PagesResearch conducted shows that 95 percent of high school students admit to having cheated at some point in their education and about half of all college students have admitted to plagiarizing. Academic cheating has become a norm for many students during their years in school, whether it is in middle or high school. The question now becomes why kids in this generation cheat, do they cheat because they re just that lazy to do work or just don t understand what s going on in class and are too scared

Health Determinant Economic and Environmental

Question: Discuss about theHealth Determinantfor Economic and Environmental. Answer: Introduction Determinants of health are the factors that explains what make some people healthy and some unhealthy. It may come under several categories such as personal, social, economic, environmental, and biological and policy making factors. The interrelationship between all these factors determines the health of an individual. Certain context of peoples lives also has an impact on their health and they may not be able to control each of the determinants of health (WHO | The determinants of health, 2017). The main objective of this report is to discuss three determinants of health and analyze how they affect an individual. The main focus is on providing evidence regarding how different determinants impact health and then describe three health promotion strategies specific to each determinant. Finally personal reflection will be given on the likely challenges a person is going to face when modifying each of the health determinants. It will help in getting idea about approaches to prevent disea se and promote health. Determinants of Health Income and Social Status Higher income and social status is often associated with better health because high income helps in providing safe housing and fulfilling nutritional needs of an individual and their family. People with high income have more control over their health and lower status groups are often vulnerable to range of disease and stressful situations in life. This was also confirmed by the Second Report on the Health of Canadians which proved that only 47% Canadian in low income group have good health in comparison with 73% Canadians in high income group. Distribution of wealth, income and power determines the level of risk found in a persons life and working conditions. This makes them more vulnerable to disease and injury rather than behavioral risk factors. A research study indicated social status is positively associated with physical and mental health functioning scores. A research study reviewed the relation between income inequality and health. It showed that majority of studies support the facts that health worsens in case of income inequality. People experiencing income equality are victim of violence and poor mental condition. Several challenges also arise in their social gradient that damages their health and leads to adverse social consequences for them. The study indicated taking action to narrow the income gap and address issues of these people (Pickett Wilkinson, 2015). Health promotion strategy- The following strategies can be taken for promoting health in people with poor social status- Taking steps to alleviate poverty through the reduction of inequalities in health and income. The Canadian government needs to provide better employment and working conditions to socially disadvantaged group. Legal action is required to enforce employment equity and provide a guaranteed minimum income to these groups. It is also the responsibility of public health department to act upon socioeconomic determinant of health and invest in promotion of health and social development of the community. Denmarks Programme on Public Health and Promotion is an example where the aim was to reduce social inequality by increased efforts to improve health of disadvantaged group. Another strategy is to create a societal condition where good health is possible for all groups. In this case, the main action will be required in providing economic and social security, healthier working environment, safe environment, active medical care and protection from communicable disease. Personal reflection- I may face many challenges while trying to improve my social status and access to health. Firstly personal acts as major barrier in improving social status and socially disadvantaged people have low confidence and poor self-esteem. Hence, I need to modify my attitude to deal with injustice in employment and prepare myself in such a way that I get better employment opportunities to improve my social status. Employment and Working Conditions Factors like unemployment and unsafe work condition lead to poor health in people, whereas people who have more control over their work and job demands live healthier and stressful life. Employment has an effect on physical and psychosocial well-being of an individual. If employment does not provide desired benefits and sense of identity to an individual, it leads to adverse impact both on the affected person and his or her family. Hence, adverse health effects are dependent on nature of job and length of exposure to particular job conditions. Certain laborers and workers have to engage in precarious employment to support their families. Research study by (Landsbergis, Grzywacz, LaMontagne, 2014) explains that there is rise in precarious employment due to flexible employment provisions. Job insecurity has also increased due to change in employment conditions and the research gave evidence to the fact that workers in lower social class are exposed to greater job insecurities which further translates to occupational health disparities. Health promotion strategies- The health promotion strategies to improve working conditions in employment are as follows: Designing a motivating work environment can help to provide pleasant working conditions to employees and enhance their mental and physical health. Use of motivational theories concept will help to make appropriate change in work practice and the implementation of effective work designs. This strategy will provide flexibility and control to workers to improve the health as well as professional performance. Environmental hazards and poor safety standards are high in informal work and they lack the necessary awareness to understand health and safety measures. The second health promotion strategy is to educate workers about safety measures in the job by means of health promotion program and teaching them to prevent occupational accidents and disease due to employment. A preventive and promotion approach is needed to establish a link between prevention of accidents and safety as at workplace site. The informal sector should be given adequate support by regulating labour condition and employment opportunity policies in affected place. Personal reflection- Making changes in my work conditions might turn out to be difficult for me due to issues lack of awareness about environmental and health hazards in my workplace. I may not be able to work according to my convenience due to the lack of support from my seniors and the extra hours and stress in the job might have a negative impact on my health. Social Environment Social environment refers to the social network present within a community and the way organization and individual interact to share their resources and build attachment with others. The values and norms in the society and the level of social stability in a community determine its risk or benefit to health. For example the Canadian reports showed that a society with high level of trust among groups have reduce mortality rates and family and social violence is associated short and long-term health impacts. Research study explains that social variables like ethnicity, immigration status, social networks and support, distribution of social capital and poverty has an impact on health status of individual. Absence of positive social environment is a risk factor for moribity and mortality associated with diseases. It is necessary to analyze the mechanism underlying these social relationships to promote physical and well-being of community (Cacioppo Cacioppo, 2014). Health Promotion Strategies: The following are the strategies to improve negative social environment- Behavioral and social intervention is needed to address public health needs and address socioeconomic and ethnic health disparities. The media and public health marketing might play a role in enhancing the social capital of the community. Review of psychosocial and behavioral interventions in disease process is needed to identify the impact of this approach on health. Hence, with this approach, intervention efforts will focus not only on individual level phenomena related to disease but also on societal level phenomena. Another intervention is to provide supportive environment for health to people in the community and develop the capabilities of citizens to become self-reliant in health. This opportunities for empowerment is required not just in peoples home and workplace, but also in local community. Personal reflection- Negative social environment may be related to income inequality, lack of social connectedness and poor collective efficacy. Making changes in the negative social environment might be a challenging task for me in the absence of peoples willingness to participate in the welfare of community. Poor support from members might make the health promotion process difficult. Conclusion From the report examining the impact of different determinant of health on an individual, it can be concluded that some factors are under the control of people and some are not under the control. In case of personal issues, behavioral intervention and change in attitude might help to promote better health. However, in case of issues like adverse health outcome due to low social class and poor social environment, government action is needed to modify work related and social policies and promote well being of the community. Reference Cacioppo, J. T., Cacioppo, S. (2014). Social relationships and health: The toxic effects of perceived social isolation.Social and personality psychology compass,8(2), 58-72. Landsbergis, P. A., Grzywacz, J. G., LaMontagne, A. D. (2014). Work organization, job insecurity, and occupational health disparities.American journal of industrial medicine,57(5), 495-515. Pickett, K. E., Wilkinson, R. G. (2015). Income inequality and health: a causal review.Social Science Medicine,128, 316-326. WHO | The determinants of health. (2017).Who.int. Retrieved 28 January 2017, from https://www.who.int/hia/evidence/doh/en/

Report on Accounting for Grand Progressive- myassignmenthelp

Question: Discuss about theReport on Accounting Standards for Grand Progressive. Answer: Introduction The issue presented in the question is that the company Grand Progressive Ltd has a 33% interest in the share capital of Massive Dynamic Ltd. The founders of the company Massive Dynamic Ltd., Mr. and Mrs. Bell own the rest of the shares and have allotted three out of five seats in the Board of Directors to the Grand Progressive Limited. Grand Progressive Ltd takes the lead on all decisions but the business is closely monitored by Mr. and Mrs. Bell who hold the other two board positions. Now it has been asked in the question to advise the directors of Grand Progressive Ltd on the basis of the laid down regulations of Australian Accounting Standards Board (AASB). Advise to the Directors of Grand Progressive Limited According to the laid down structure and regulations of the AASB 127, it is mentioned that if an entity holds twenty percent or more of the shares in the share capital of the company that is if it has twenty percent or more voting power in the company then it may exert significant influence over the control of the company. In order to evidence the influence of the entity over the company whose shares are purchased, certain common occurrences may be followed like representation of the shareholding company in the board of directors; participation in the decision making processes of the company; transactions which are material in nature between the investee and the entity; personnel interchange between the entity and investee and also obtaining required technical information from the entity. However the provision of significant influence does not really depend on the percentage of shares owned by the entity. The case may be such that the majority of the shares may be owned by some other entity but the significant influence might be exercised by another entity (Howieson 2013). The above conditions or situations mentioned, is matching with the provisions provided to Grand Progressive Limited to by Massive Dynamic Limited. The directors of Grand Progressive Limited, though own only 33% of the share capital (which is more than 20%) , represent majority of the members of the Board. Thus it is evident that the company has a significant control over the control of Massive Dynamic Limited. The directors of Grand Progressive Limited should also be aware of the fact that the potential voting rights of the company might also be reduced or increased as the case may be. This may be done by converting the shares into other financial instruments (Carey, Potter and Tanewski 2014). If the investment in preferred shares is assumed to be same as the investment in ordinary shares then the entity may have significant influence thus the particular investment should be accounted for using the equity method. The investment done by Grand Progressive Limited on Massive Dynamic Limited has to be accounted by equity method. This is because the investor irrespective of the percentage of shares owned by it in the share capital has displayed enough control in the decision making process of the investee company. For an instance the Grand Progressive Limited holds three seats in the total of five seats in the Board of Directors. This significantly indicates that the shareholdings by the entity are to be accounted by equity method (AASB, C.A.S., 2015). But according to AASB 127, the directors of Grand Progressive Ltd have to publish separate financial statements in addition to consolidated financial statements. Though it has been mentioned above that the shares owned by the entity that is Grand Progressive Ltd may be most probably in the nature of preferred shares, therefore has significant control over Massive Dynamic Ltd but as it is not a proven fact, that is why according to AASB 127 the entity has to prepare separate financial statements (AASB, C.A.S., 2014). The separate financial statements that are to be prepared are to be done in accordance with the standards as set in AASB 9 or by following the equity method as states in AASB 128 or at cost. The directors of Grand Progressive Ltd should keep in mind that the entity will have to apply the similar accounting for all categories of investments. Investments treated at cost or with the help of equity method will have to be accounted for in line with the laid down rules and regulations as in AASB 5 Non-current Assets Held for Sale and Discontinued Operations when these investments are categorized as held for sale or for the purpose of distribution (Hughes and Hoy 2013). The entity, Grand Progressive Ltd will have to undertake the application of all relevant standards when disclosures are provided in the separate financial statements. An entity if at any time becomes the parent company then it may make a choice of not preparing the consolidated financial statements and only prepare the separate financial statements. When the parent company is preparing the financial statements then it should be kept in mind that this fact should be very importantly mentioned in the disclosures that this is the only financial statements prepared by the entity and no other consolidated financial statements are prepared (CRSTEA and CIOLOMIC 2014). As mentioned in the question the directors of Grand Progressive Ltd though occupy the majority of the number of Board members in the Massive Dynamic Ltd and take a lead on the decision making processes but the business is closely monitored by the founders of Mr. and Mrs. Bell. This should be noted by the directors of the Grand Progressive Ltd. This is because as the Grand Progressive Ltd takes a lead in every major decision making process of the business, therefore the directors should take serious initiative in observing the proceedings of business closely and then provide required input in the decision making process. Another proceeding of the AASB 127 that has to be kept in mind is that when an entity is preparing separate financial statements then it shall be done in accordance to the standards laid down in AASB 10, AASB 11 or AASB 128 whichever the case may be. In the separate financial statements prepared by the entity the fact that only the separate financial statements are prepared and also the reasons as to why this decision of preparing separate financial statements is taken. Other obligations like the name of the investee, the primary place of business, the percentage of ownership of the entity in the investee company and the details of the method that is used in order to treat the particular investment that is incurred. Thus as it can be understood from the above descriptions the directors of Grand Progressive Ltd should be more efficient and sincere in executing the duties on behalf of the Massive Dynamic Ltd and should strictly follow the standards as mentioned in the AASB 127 (Taylor, Richardson and Taplin 2015). Why is it necessary to make adjustments for intra-group transactions? It is necessary to make adjustments for intra-group transactions especially while only preparing separate financial statements. But before understanding the reason behind it, at first the term intra-group transaction needs to be understood. The term intra-group transaction refers to the transaction that takes place in between entities that are in the same group. While preparing consolidated financial statements the intra-group transactions are not required. This is because from the perspective of a group, they do not arise hence eliminated. According to AASB 127 the intra-group balances, expenses and income and transactions should be totally eliminated. It is also mentioned in AASB 127 that if incase temporary disparities or differences arise due to the fact that the profits and losses have been eliminated then the tax effect accounting might be utilized (Gordon 2012.). In much more simple terms intra-group transactions take place when one part of an entity is engaged in a transaction with another art or unit of the same entity. These transactions may arise due to a vast number of reasons including the normal course of business transactions that occur between two partner firms or parent subsidiary firms or an entity holding a certain portion of shares in the investee company. If two subsidiary firms or firms which are in any way related belong to the same domain of industry then it is very easily possible for entities to interchange or exchange inventory provided that it is a consolidated entity. Again assets transferred such as plan asset between two entities will definitely recorded in the books of both the entities as transaction with third parties and they would also get the added benefit of changing the inventory in accordance to the current demand in the market. If observed from the perspective of a consolidated entity, the transaction that ha s taken place intra-group is still not recognized because of the fact that unrelated parties are not involved therefore the disclosure included in the consolidated financial statements should not display any intra group balance (Grossi 2015). There are certain journal entries that are required in order to adjust the intra-group balance. This might be done by eliminating the intra-group sales by debiting the sales account with the amount of sales and crediting the Cost of Goods Sold account with the same amount. In order to remove the unrecognized profit and adjust the inventory that has been overstated the Cost of Goods Sold account has been debited with the amount of profit or loss that is incurred and the inventory account is credited with the same amount. The effect on tax that would be resultant from the removal of profit can also be adjusted between the two entities (Director I, Director M.K.S.L.E. and Director M.J.K.S 2014). Therefore the consolidated financial statements are essentially the statements of the group which is again an economic entity that constitutes of the parent and its subsidiaries. This is why the consolidated financial statements has the capacity to only have assets and liabilities, profits that are linked with parties who are outside the group. Adjustments for intra-group transactions are absolutely necessary as they are the internal affairs of the economic entity. This concept is also applicable to a consolidated entity. Therefore transactions between these parties which are intra-group in nature will have to be totally adjusted as because they are treated as a single unit. Hence the adjustments for intra-group transactions are absolutely necessary and must be done on highest priority (Carey, Knechel and Tanewski 2013). Conclusion Thus the directors of Grand Progressive Ltd should be aware of the above mentioned facts and act accordingly. They should be more vigilant towards monitoring the various operations of business and should be well informed about the duties that they have to perform. Moreover the laid down standards in AASB 127 should be strictly followed by the directors. References Howieson, B., 2013. Defining the Reporting Entity in the Not?for?profit Public Sector: Implementation Issues Associated with the Control Test. Australian Accounting Review, 23(1), pp.29-42. AASB, C.A.S., 2015. Investments in Associates and Joint Ventures. AASB, C.A.S., 2014. Business Combinations. Disclosure, 66, p.77. Carey, P., Potter, B. and Tanewski, G., 2014. AASB Research Report No. Hughes, M. and Hoy, S., 2013. Two Steps Backward and One Step Forward: The IASB's Response to Off-Balance Sheet Financing Through Investments in Other Entities. CRSTEA, A. and CIOLOMIC, I.A., 2014. Public Sector Consolidated Financial StatementsArea and Methods. AMIS 2014, p.594. Taylor, G., Richardson, G. and Taplin, R., 2015. Determinants of tax haven utilization: evidence from Australian firms. Accounting Finance, 55(2), pp.545-574. Carey, P., Potter, B. and Tanewski, G., 2014. Application of the reporting entity concept in Australia. Abacus, 50(4), pp.460-489. Gordon, I., 2012. Superannuation in Society: What are the Accountability Relationships and is there a Role for (Group) Accounting?. Australian Accounting Review, 22(2), pp.142-154. Grossi, G., 2015. Consolidated financial statements in the public sector. Public sector accounting, pp.63-76. Director, I., Director, M.K.S.L.E. and Director, M.J.K.S., 2014. Company Secretary. Paul Schultz HEAD OFFICE REGISTERED OFFICE Level, 1, p.91. Carey, P., Knechel, W.R. and Tanewski, G., 2013. Costs and Benefits of Mandatory Auditing of For?profit Private and Not?for?profit Companies in Australia. Australian Accounting Review, 23(1), pp.43-53.