One of the central objectives of financial reporting is to provide information that is useful to both present, and potential, creditors, investors, and other users for decision-making purposes. In order to do this, the company must determine if the items in question represents a present obligation or one to be recognized it the future. It is best to document the transactions during the time it is incurred.

By recognizing the liability in this manner, investors and creditors are aware of its assets and expenses as soon as it starts to impact the firm. Since the information distributed in this way is relatively current, it can help user to predict future events such as cash flows, or lack thereof. These revisions can also help to expediently confirm past decisions, giving the user confidence that no current changes are needed. If any estimates (length of useful life, gain or loss on disposal asset, etc) are subject to change based on more accurate information over the useful life of the assets, these changes should be reflected in the financial statement for users to see. Thus, users are always aware of any significant changes made by management. Also when attempting to

Meetings are held weekly to let employees know what the goals for the month are and whether or not they are meeting these goals. The financial analysis is the department that complies all the information together for the director of each department and afterward the reports are disseminated to the different departments so it can be discussed in the weekly team meeting. Employee's are encourage to voice their opinion on how to improve on collections, any problems that one is having when trying to collect payments, with other associates, whether project goals are reachable, etc. Monthly meeting are held to review the budget and expenses of each department. The meeting is conducted to determine if there are cut backs that need to be made. Cut back can consist of different items for example postage, overtime, payroll, supplies, etc.

As requested, I interviewed 2 employees of The May Department Stores Company. The first interview was conducted with Ronald G. Bruns, Director of Control with The May Design and Construction. The interview was conducted in the corporate office in downtown St. Louis. This interview started out being a history of his life in accounting but eventually I had to steer him in the right direction to the main reason for the interview, "what is the importance of their financial statements?" He began by stating, "It is an interpretation of how well or poorly a company is doing." "They are very important because they can make or break potential investors or existing ones." The sole purpose of providing this information to the public is to gain more contribution through stock options, common stock repurchase programs, and preference stock. The May Department Stores Company top priority is the growth of the company through acquisitions, new stores, increased store-for-store sales, mergers, and expansions of existing stores. In the year 2000, they were successful in doing this because sales grew to $14.5 billion, which is a 4.3% increase from last year. Earnings in doubtably increased to $2.62 per share compared to $2.60 in 1999. The May Company owns 427 department stores that are operated by eight regional offices under 11 recognized trade names and the new addition to the company is David's Bridal, which operates 123 stores in the year 2000. The May Company is planning to open 22 new department stores and David's Bridal plans to add 28 new stores in the year 2001. By continually expanding existing store and building new one's, this will increase the stores square feet of retail space and this will untimely generate more sales.

The payroll budget is what determines how many workers can be hired for each department. He analyzes how much money is allocated and compares it with the production level of the previous year to determine whether more workers are needed. Cost expense and overtime is also pre-determined. The set expense goal is 6 months and the intervals are set exactly the same as they are in the fashion industry; spring is from February 1st - July 31st and fall is from August 1st - January 31st.

By reviewing all of the reports and comparing them to the previous years, Ron explained how 2000 and 2001 was a poor year. Even though the company gains a 4.3% increase in Sales in the year 2000, with the amount of the new stores added, The May Department Stores Company expected a huge increase in revenue but unfortunately this did not happen. Ron states, "The reasons for the decline in profits is due to the poor economy, high cost in gasoline and energy, and Kohl's Department store." The May Company main concern is in the growth of the business because an increase in retail space will produce more sales. Unfortunately The May Company only opened 19 out of the 22 stores that were predicted for 2001. Even through Kohl is a non-traditional store that seeks a different target market than The May Department Stores Company; they are having a direct impact on The Ma

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Approximate Word count = 2849
Approximate Pages = 11 (250 words per page double spaced)