http://www.radioink.com/Article.asp?id=1161570&spid=24698
Summary
The media report that I am blogging about is how Journal Communications revenue went down in Quarter 4. Basically, Journal Communications reported a net loss of $223 million and that’s around $4.46 per share. They also saw their revenue fall by 9 percent in the fourth quarter of 2008 to $134.3 million from $147.6 million. In 2007 during Quarter 4, Journal Communications had net earnings of $9.5 million. They had a huge non-cash charge that was 200 million dollars. This chapter can’t stress Revenue Recognition enough and this is quite the good example because of the huge drop they showed. The revenue in broadcasting roughly fell around 6% and radio revenues fell around 8%. They had basically lost a lot of money throughout the year, and their cash flow isn’t looking to good.
Connections
This article connects to chapter 4 because chapter 4 talks all about revenue. It explains how revenues should be recognized and Journal Communications had showed their expenses when the recognized their revenues. See, the article explains how the company had a great loss in revenue and that ties up with how it is relevant to the Users. Since the company had recognized their revenue in the form it was, many investors that are looking to invest won’t invest in it, so that is how it has User Relevance. There is also a connection in between the cash flow of the company and the Cash-to-Cash Cycle. So basically, the article connects with the chapter by means of revenue recognition and that it is relevant to the user because they showed the decrease in their revenue and now users can input that info and output it accordingly.
Personal Reflection
I believe that when a company is down like how Journal Communications is, it is right to show its Revenue in the form it is and not to delay. This shows the revenue recognition and it allows the users to have a correct idea of the information showed in front of them. I think that Journal Communications are down in the dumps because of the economic environment and because of Advertising expenditures that caused their revenue to be as low as it is. So it shows that their revenue has been affected a lot by the events that occurred and that they are low on cash, and aren’t producing as much. So basically, Journal Communications are currently in a bad position and need to pick it up next quarter by lowering their advertising expense, which would allow their revenue to boost up.
Mandeep Dhami
Financial Accounting 12
Block A
