Walgreens Remains US Based

I’ve caught a few headlines recently from Google Finance speculating whether Walgreens will keep the US as its tax domicile or go overseas where corporate tax is lower.

As a consequence of this, protesters have been outside Walgreens voicing their opinions. Even their stock price recently dropped since many investors assumed the tax inversion will happen.

However, as they come close to completing the acquisition of Alliance Boots, a European pharmacy retailer for $16 billion, Walgreen’s decision to not invert was announced.

According to Peter Frost, Tribune reporter:

“The new U.S.-based holding company will have four divisions: Walgreens, which will continue to be based in Deerfield; Boots, which will maintain its headquarters in Nottingham, U.K.; Pharmaceutical Wholesale and International Retail; and Global Brands.”

In addition:

“Walgreens Boots Alliance will have 11,000 retail stores in 10 countries, along with 370 distribution centers that serve 180,000 pharmacies, doctors, health centers and hospitals in 20 countries.”

To Invert or Not Invert?

Walgreens decision to stick to its roots as being US made and based is contradictive at times when many US companies are going overseas. With Congress not taking action quick enough to address the problem, what we are seeing is a spike in US corporations moving overseas.

According to John D. McKinnon, WSJ reporter:

“Overseas relocations by U.S. corporations appear to be accelerating in recent months, as evidenced by a wave of deals sweeping through the pharmaceutical industry. About 50 U.S. companies have reincorporated overseas during the last decade, as firms grow impatient with lack of change in the U.S. tax system and seek tax-friendlier environments.”

Tax Dodging Hurts the Residents

As an Illinois resident, what is shocking is how much the Governor has given to the company. Within the in-depth report by Americans For Tax Fairness it specified that:

“If Walgreens goes ahead with an inversion, it would be an afront to Illinois taxpayers. In 2012, the state awarded Walgreens a package valued at $46 million in tax credits over ten years in exchange for job creation. In awarding these credits, Illinois Governor Pat Quinn commended Walgreens’ “deep roots in Illinois.”

Also, it is estimated that a $4 billion tax dodge may have been tempting.

With Walgreens not going offshore, what came with it was a cost. However, looking at the company’s growth long-term, especially with the recent acquisition of Alliance Boots, the horizon seems nowhere but up.

What are your thoughts? Share them below!

-Thu

Sources:

Brush Up on Your Resume and Get Interviewed

As an accounting student, your resume is one aspect of helping you move to the next level. It’s that moment when a potential employer makes the decision to either meet with you or not.

So during the interview process, it is a snapshot of you as a person.

Now let’s say there’s a career fair coming up. If you plan on going, the first thing you should do is brush up on your resume. Along with that, the stories you’ll be willing to share with the firms/companies you’ll hand it to.

Think of Your SWAG

First, have you ever wondered why a firm has to go through so much information just to find the right candidate? Despite it feeling like a filtering process at times, it shouldn’t overwhelm you at all.

Think of it this way, if someone was going to hire you, you have to convince them why. Hence, topics interviewers often bring up concerns your:

  • Strengths
  • Weaknesses
  • Accomplishments
  • Goals

Just think of SWAG!

These general categories can then be broken down into specialized skills you’ve developed. So it’s no coincidence that these are your core competencies, and are outlined in your resume including abilities such as:

  • leadership
  • problem solving
  • communication
  • teamwork
  • decision-making
  • organization and planning

Imagine Your Target Interviewer

Once you’ve gotten your SWAG in place, it’s now time to practice your interview. Think about the resume format. Starting from the top, imagine what someone who’s looking at it will ask.

To help you out, here are a few prompts which I’m practicing with at the moment:

  • Tell me about yourself.
  • Name three of your strengths.
  • Name three of your weakness (how have you overcame them?).
  • Where do you see yourself in the next five years?
  • Why did you choose your major?
  • What attracted you to this company? Why us?
  • Why should we hire you?
  • What were the responsibilities of your last position?
  • How would you describe your work style?
  • What techniques and tools do you use to keep yourself organized?
  • Tell me about your proudest achievement.

These are the basics to start. In between, you may be asked some behavioral/situational questions as well. I will share those with you in a future post. For now, here are 3 rules of thumb to remember during the interview:

  1. Remain positive
  2. Be a team player
  3. Emphasize what you know

A big thanks to the UIC Business Career Center for the prompts and 3 rules of thumb!

OPTIONAL: When you’re practicing, try recording your answers to hear how you’re expressing yourself. Better yet, type out your conversation.

Again, keep in mind what and how you’re saying what you’re doing. You’ll be surprised but when you’re done, you’ll have a new working draft for your resume. These actions can then be outlined as part of your job descriptions.

It’s a backwards-approach, but doing the process this way will allow you to confidently talk about your experience.

Do Your Due Diligence

Lastly, no matter who you’re handling out your resume to, do your due diligence by learning more about who you’re giving out your info to. This way, if you do receive an email or call back, you won’t be surprised.

The best way to do that is to go online and look through the company’s website. See if there are any current news. This may be under the Press heading or About.

Just get personal and think about some questions you may want to ask the interviewer as well. In other words, when you want a company to pay attention to you, you have to also show them you’re willing to pay attention to them too.

By taking out a moment to do research, you give your interviewer something to remember. It’s also a good way to make conversation which shows you’ve went the extra mile to connect with them.

What do you think? Share your thoughts!

-Thu

Practice – Journaling Basic Accounting Entries

If you’re taking Financial Accounting, I previously suggested Professor Tony Bell’s video series to use in tandem with your studies. He gives you enough to start working on the basic problems.

For example, after going through Unit 2 on journaling entries I was able to work through a few exercises from my old textbook. Entitled Financial and Managerial Accounting 11e by Warren, Reeve and Duchac, you can view the textbook resources on Cengage for the general blank working papers.

Check out Financial and Managerial Accounting 11e Student Resources.

View the textbook on Google Books – Financial and Managerial Accounting 11e (may be missing some pages). Now before we start, here are some things to keep in mind:

  • The normal balances within the accounting equation
  • The types of accounts or chart of accounts used
  • The formatting of the general journal and the entries

Applying What You’ve Learned

Here are some exercises I did after viewing Professor Tony Bell’s videos from Unit 2. They are taken from Chapter 2 of Financial and Managerial Accounting 11e.

I’ve also provided the solutions below as a download. However, take a shot at the problems first to see how you’ve done. The type of transactions are divided as well. So keep them in mind when you’re analyzing what the account type is.

Let’s start!

Journal entry for asset purchased

  • Prepare a journal entry for the purchase of office equipment on March 4 for $27,150, paying $5,000 in cash and the remainder on account.
  • Prepare a journal entry for the purchase of office supplies on August 7 for $4,000, paying $1,000 cash and the remainder on account.

Journal entry for fees earned

  • Prepare a journal entry on September 6 for fees earned on account, $8,000.
  • Prepare a journal entry on May 29 for cash received for services rendered, $5,000.

Journal entry for dividends

  • Prepare a journal entry on December 22 for the payment of dividends of $10,000.
  • Prepare a journal entry on February 3 for the payment of dividends of $7,500.

Exercise: Chalet Co.

Chalet Co. has the following accounts in its ledger:

Cash                                Accounts Receivable                      Supplies

Office Equipment            Accounts Payable                           Capital Stock

Retained Earnings           Dividends                                        Fees Earned

Rent Expense                  Advertising Expense                       Utilities Expense

Miscellaneous Expense

Journalize the following selected transactions for October 2012 in a two-column journal. Journal entry explanations may be omitted.

1. Paid rent for the month, $2,000.
2. Paid advertising expense, $900.
5. Paid cash for supplies, $1,300.
6. Purchased office equipment on account, $16,000.
10. Received cash from customers on account, $6,700.
15. Paid creditor on account, $1,200.
27. Paid cash for repairs to office equipment, $600.
30. Paid telephone bill for the month, $180.
31. Fees earned and billed to customers for the month, $26,800.
31. Paid electricity bill for the month, $400.
31. Paid dividends, $3,000.

Solutions to the Exercises

Download the solutions in DOCX format. You’ll find the both the problems and solutions.

Get the solutions to the problems.

Until next time, to your accounting advancement!

-Thu

Digital Influences Help Businesses Connect Online

Listened to a podcast yesterday with Matt Cutshall who has a big Vine presence. He was Spouting off with Josh D Gray who is actually his BIL (brother-in-law).

Listen to the podcast here.

I found Matt through his friend Arielle Vandenberg. Hence, as fans of both, about once a week I’ll tune in to see what’s happening in the Vine world. Now the thing that stood out for me was how Matt was able to quit his job at a restaurant in L.A. and work full-time Vining and Instagramming.

He mentioned two particular websites, instafluence.com and niche.co.

Instafluence is an online management company while niche.co allows brands to connect with online influencers to monetize their time.

Vine vs Instagram

If you’re a regular user of Facebook, chances are you also know Instagram. However, if you’re a Twitter user, you’re probably more familiar with Vine.

Facebook acquired Instagram on April 9, 2012 while Twitter acquired Vine in October 2012. For quite a while the idea of 6 seconds looped videos, which is a trademark idea of Vine, was a new thing.

As Instagram introduced videos beyond the 6 seconds limit on June 20, 2013, it became a direct competitor to Vine. Many thought it would kill Vine, only it didn’t because Instagram didn’t looped their videos.

Users/Demographics

Just doing a quick search online you can see that the top users on Instagram are often celebrities. However, on Vine, it is the total opposite.

When I began using the platform back in early 2013, I saw an organic growth happening with the community who embraced the limitations of 6 seconds looped videos. Most of the personalities who are now approached by major brand names were just having fun back then.

To me, it was similar to experiencing a start-up. Everyone was just pitching their ideas left and right. In the process, they were having one heck of a good time. Then as I joined Instagram, a few particular niches which stood out for me were food and fashion.

This is enough for me to look at #foodporn and #tshirts all day.

Here’s also another interesting find – Vine was first introduced to iPhone users, while Instagram users are predominately Android phone owners. According to Digital Marketing Ramblings, based upon their 85 Interesting Instagram Statistics what they found was as of the year 2014 alone:

  • 34% are US teens & millennials (ages 14-34)
  • 20% are US female adults
  • 15% are US male adult
  • 23% of US teens considered Instagram their favorite network
  • 51% are the class of 2014 who uses Instagram daily

Then according to Tamba who did an infographic on the Rise of Vine:

  • 57% are female
  • Largest group of users are between 18-20 years old

The Money is in the Numbers

As major companies recognize the possibilities of building a relationship with an audience, they are leveraging influencers to build their brand.

The way I see it is if a company is able to reach out and connect with these influencers without having to pay for the cost of marketing, brand recognition can be established quickly.

Hence, with video an effective form of marketing on both Vine and Instagram, major brands such as Nike, Starbucks, and even the NBA are able to achieve reach among the young demographic I pointed out earlier.

According to Niche.co, global partners are ready to monetize potential influencers.

They include companies such as:

  • Oral B
  • Lyft
  • GAP
  • Pivot

What do you think? Share your thoughts!

-Thu

Sources:

Learn About the Possibilities of Business through ‘The Profit’

Recently, I caught a few episodes of The Profit. The show centered itself around an investor, Marcus Lemonis, who has had experience in buying out over 100 businesses. So the premise is looking at struggling businesses whom he can invest in with the potential to profit.

What’s interesting is he mentions three criteria to look at within every episode:

  1. People
  2. Product
  3. Process

Mr. Green Tea

The first episode I watched focused on Mr. Green Tea, a Keyport, New Jersey family-owned ice cream business. They have been around since 1968, and their customers have primarily been Asian restaurants.

Unlike the other businesses in which Marcus had invested in, they were pretty good with their financials. However, the dynamics between the father and son within Mr. Green Tea made it clear why they were never able to come to a decision when it came to expansion.

On one hand you have the young businessman with grand ideas. On the other, you have a traditional businessman who looked closely at the numbers as a compass. Hence, Marcus being the mediator or what I call the intervention allowed both men to meet somewhere in the middle.

The Offer

The deal was an investment of $600,000 and 35% of the company. The elder businessman did not readily agree at first. However, the tactic is something which I have noticed Marcus does within each episode. He acts on the opportunity quickly and does not give the business owner time to think about other options.

Surprisingly, the family agreed to the offer. Now after the offer has been accepted, another theme throughout the show is how Marcus would take over the business for a whole week.

Here is where it gets interesting.

The Caveat

If we go back to the three criteria mentioned earlier, Mr. Green Tea had good people, a great product but needed sprucing up on its process.

Moreover, I’ve learned that when you let co-packers do the production for your business, depending on how many other clients they’re taking on at the same time, expansion would be a matter of where you are in line.

So in the end, you’re losing money rather than making profits if you did the production yourself. Hence, in Mr. Green Tea’s case, Marcus was able to turn the production in-house. This allowed the owners to test out new flavors within the same facility without the added costs.

This saved the business money which they would then be able to pocket.

The Take-Away

I won’t go into more of the episode. However, I think you’ve gotten a good idea of what you can potentially learn from a struggling business through The Profit. While I don’t know much about the ice cream business, I was able to take away a few general questions to think about.

  • Do you know your numbers when it comes to expanding?
  • Can the margins increase if you did production in-house?
  • How can rebranding the company increase its potential vertically? Horizontally?

What are your thoughts?

Until next time, talk soon!

-Thu

What to Know Before You Start Financial Accounting

If you’re just starting out in accounting, take a moment to research some videos on YouTube. This is so you can find a teacher who speaks to you and is able to break down the information in layman’s terms.

Use keywords such as financial accounting, accounting for beginners, or just accounting.

By approaching your beginning steps this way, you’ll find that you’ll read your textbook with a purpose. Moreover, you’ll enjoy what you’re learning as well.

For the Basics

Here’s a favorite at the moment – Professor Tony Bell from Thompson Rivers University.

He gets into the nitty-gritty of getting started with the financial statements. In addition, there are 9 units available for you to consume. What I like is how each video is short enough for you to take something away.

Hence, let’s say you start with Unit 1.

In under 45 minutes and broken down into 5 parts, you’ll be able to define the following terms:

  • asset
  • liability
  • stockholder’s equity
  • revenue
  • expense

Additionally, you’ll then be able to categorize them based upon a given example company, which in this case is Fred’s Tailoring Service. From thereon, you’ll take those elements and plug them into the basic financial statements you’ll create which are the:

  • income statement
  • statement of retained earnings
  • balance sheet

Keep in mind, this is very basic. You’re given enough to research more on the information at hand. However, the video is very well presented that you can combine just Unit 1 videos alone with the first chapter of your accounting textbook.

Furthermore, this will allow you enough confidence to work on your textbook problems.

After going through Unit 1, I wanted to look at some actual financial statements of existing companies. So where do we go online to find that?

Here are a few places:

For More In-Depth Explanations

If you’re planning to take Managerial Accounting as well, you might want to check out NotePirate’s Introduction to Financial Accounting free online course.

Just like Professor Tony Bell, the course is entirely in video and available on YouTube. Each video is also short enough for you to learn something.

In addition, Dave, the presenter goes into the details about financial accounting. So, if you’re looking for more in-depth explanations, I suggest you check out this series.

Good luck with your course!

-Thu

What are your thoughts on beginning financial accounting? Share them below!