Campbell soup Essay Example | Topics and Well Written Essays - 1250 words

Campbell soup - Essay ExampleFrom this period, Campbell diversified its products and posted billion dollars sale but small profits. The most important development, however, was ascribable to its borrowings from investors, the company gradually became subject to the decision and pressures of stockholders. The most important of which include the managements protracted legal battles with investors. This dimension to Campbells existence has resulted to the adoption of management teams that were heroical to improve Campbells positive net margins beca economic consumption it affects the stock price. This the reason why it has pulled all the stops in fellowship to generate the positive earnings that besiege Street demands to the point that illegitimate policies were adopted. Cases in point were the improper accounting, trade loading, among other policies.1. Identify legitimate business practices that corporate executives can use for the unproblematic purpose of manipulating or managing their companys reported operating results. Are such practices ethical? Defend your answer.Examples of legitimate business practices that corporate executives can use in order to manipulate their organizations operating results include trade loading or the use of overweening price concessions in order for consumers to buy more products thereby propping up the reported revenues or profits for a specific period and, converting given period-ending discounts as selling, general and administrative expenses sort of of treating them as reductions of gross revenues. Another legitimate gimmick that organizations could legitimately use to smooth out its earnings and manipulate its operation reports is by putting excessive reserves on its balance sheet (i.e. for bad debts or defective merchandise) in one quarter, in effect, lowering earnings below what they otherwise would moderate been, and then reversing the process in another quarter, which would result to the conversion of some of the e xcess reserves into profit