Long Distance Rates And Revenue - 990 Words

As long-distance rates and revenue declined, the debt and expenses piled up and put pressure on WorldCom’s ability to meet key-performance indicators and earnings forecasts (J. Randel Kuhn Sutton, 2006). The line cost was the biggest expense for WorldCom and half of its total expenses. Management committed to achieve a low line cost to revenue ratio because lower ratio meant better performance and higher ratio meant poorer performance. Management focused on lowering the line cost level expense (J. Randel Kuhn Sutton, 2006). It carried out two improper accounting methods to reduce the amount of line costs (Beresford, Katzenbach, C.B. Rogers, 2003). First, it released the accruals, the amounts kept aside on WorldCom’s financial statements to pay expected bills which is also called â€Å"cookie jar reserve† from 1999-2000 (Beresford, Katzenbach, C.B. Rogers, 2003). These accruals were supposed to reflect the estimate line costs and other expenses that WorldCom h ad not yet paid (Beresford, Katzenbach, C.B. Rogers, 2003). Releasing the accrual is appropriate when it turns out that less is needed to pay the bills than has been expected to pay. Instead, WorldCom provided offset against reported line costs when the accrual was released which reduced reported expenses and increased pre-tax income (Beresford, Katzenbach, C.B. Rogers, 2003). When the accruals started to run out, WorldCom came up with another method, capitalization of line costs. WorldCom started classifyingShow MoreRelatedPublic Policy Goals For Ip Voice Services Haven1032 Words   |  5 Pagessubsidize native VOIP service in rural areas, where the value of providing service is higher due to greater distances between customers. VoIP suppliers already contribute to the federal USF on the idea of revenues from interstate and international traffic. With this call, VoIP suppliers currently should contribute to state USF programs supported their intrastate (within a state) revenues farewell as their needs don t conflict with federal law or policies. State Regulations The Commission s rulesRead MoreCompare and Contrast the Transport Principles of Economy of Scale and Economy of Distance1418 Words   |  6 Pages ID: 01 Intake: 14th [pic] Bangladesh University of Business Technology (BUBT) Submission Date: 30th December, 2010 1. Compare and contrast the transport principles of economy of scale and economy of distance. Illustrate hoe they combine to create efficient transportation? Ans: There are two fundamental principle that impact transportation efficiency Economy of scale in transportation is the cost per unit of weight decreases as the size of a shipmentRead MoreThe Boeing 7e71250 Words   |  5 PagesThe Boeing 7E7 WACC Estimation In order to evaluate the prospective IRRs from the Boeing 7E7, we first try to estimate an appropriate required rate of return for accepting this project. The capital asset pricing model is applied to estimate the cost of equity of the commercial aircraft division: R_EC= ÃŽ ²_EC*(R_M-R_f )+R_f where REC is the cost of equity capital of the commercial aircraft division. ÃŽ ²EC is the beta for the commercial division of Boeing. This beta is used instead of the company’sRead MoreMarriott Group Pricing Optimizer Essay1332 Words   |  6 Pages Revenue management has been a system long used by the airline industry to optimize revenue on airline routes. Marriott implemented their own revenue management One Yield system twenty years ago to optimize individual guest room rates and allocation. One Yield is used in 97 percent of Marriott’s 3,300 hotels in 70 different countries to handle over 75 million individual guest room transactions per year. Recently, Marriott decided to move from One Yield to Total Yield so its revenue managementRead MorePest Analysis for Pakistan Telecommunication Company Limited929 Words   |  4 Pagesbut will also generate new revenue streams for future growth. The company also continued to invest in infrastructure development and addition of network capacity with a view to enhance services and to expand its reach across the country. SWOT ANALYSIS Strengths †¢Largest operational network and infrastructure within ICT (Information amp; Communication Technologies) segment. †¢An integrated Monopoly. †¢ Market leadership in Local loop, Wireless local loop (WLL) and fixed telephonyRead MoreAirborne Express Case Study1691 Words   |  7 Pagesof competition amongst firms. While there was a 15-20% increase in shipment volumes per year for the past decade, the prices have fallen, which hindered large growth of revenues of the industry. The growth rate of revenue was a mere 10-15% since the firms were in a sense doing more work for less money. This low individual growth rate signifies high intensity of rivalry. Another reason why the industry has high intensity of rivalry is because the service is largely undifferentiated since the basic infrastructuresRead MoreOcean Carriers Solution Essay865 Words   |  4 Pagesdetailed understanding of the various calculations, the reader of this analysis is welcome to have a closer look at our model. 1. Do you expect the daily spot hire rates to increase or decrease next year? Although we expect the iron ore exports to take off in the next few years, our expectation as to next year`s spot rate is rather pessimistic. This is mainly due to the decrease of the demand in iron ore vessel shipments highlighted in exhibit 5. Meanwhile there will be a delivery of 63Read MoreStatement of Purpose to Attend University of Northern Colorado (UNC) and Mesa State University616 Words   |  3 Pageswell they fit my needs of having a short-distance college with exceptional. UNC and MSU are both close to home. They possess the educational programs I desire along with respectable baseball programs. When it comes to differences, living accommodations would be quite different between UNC and MSU. Following those lines, the graduation rates are also significantly different between the two. Even though MSU is a credible college, the graduation rate and distance from home could cause problems during dailyRead MoreWalmart: A Strategic Management Case study Financial Perspecti ve959 Words   |  4 PagesEDLP strategy of Wal-Mart by leveraging purchasing scale has pushed down prices compared to other retailers. Average prices in Kmart and Target is at least 10-15% higher than Wal-Mart and focuses its competition on product variety and quality. Revenue growth of Costco during 2008-2012 (22.64%) is almost doubled that of Wal-Mart (11.86%) during the same period. Target had a moderate growth of 11%. The % of sales of large scale suppliers like PG, Lever, PepsiCo, and Kraft with Wal-Mart is higherRead MoreOcean Carriers Case Analysis795 Words   |  4 Pages1. We expect the daily hire rates to increase from 2001 to 2002, but then to decrease overall in the long term based on the assessment of the consulting firm. The consulting firm based their forecast on higher demand in iron ore shipments. They claim demand in iron ore shipments has historically shown a strong correlation with charter rates, and we believe this makes sense. Vessel size, distance of route, and demand for ore/coal are drivers of daily rates. Per the case, technological developments