http://www.bloomberg.com/apps/news?pid=20601085&sid=aAhnL9S2vhss
Summary
Royal Philips Electronics NV posted a profit in the third quarter as operating earnings at the consumer unit more than doubled. Its net income jumped to 174 million euros from 57 million euros in the year-earlier period. Amsterdam-based analyst at Kepler Capital Markets, Peter Olofsen, said that he was surprised because Philips are coming out of the recession more strongly than he thought it would be. In July, Chief Exective Officer Gerard Kleisterlee slash 6,000 jobs and said that he would cut even more expenses if necessary. Philips will focus its restructuring on the lighting and helath-care units next year. Also, the television unit's operating loss narrowed to 26 million euros from 73 million euros last year.
Connections
In Ch.2, the textbook talks about business transaction analysis and profits. It is important to a company to make decisions from business transactions to help improve earnings for the business. Philips has analysis transactions and made decisions on how to improve their profits. They saw that the expenses are a problem, so they cut of 6,000 jobs. They also have a plan on what needs to be narrowed down, for example, the television unit's operating cost. Philiphs have earned more profit in the third quarter period from increasing sale transaction and lowering expenses.
Reflections
I think it is important for businesses to do transaction analysis because it helps owners to understand what is the problem in the company. There are many big corporations that do transaction analysis because they use the analysis to help them make decisions. In the past, I've been to an accounting firm for career prep and I saw that some big companies' owners come to see how their business is doing. Those companies rely on accountants to help them analyze the transactions to decide what accounts are affected and by how much. Those companies are really sucessful because they understand the importance of transaction analysis.
