INTERGRATED

MAS
(Accounting Synthesis)

Submitted by:

Mark Opo

BSA-IV

Submitted to:

Mr. Jaypee Y. Zoilo, MBA

Instructor

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 TABLE OF CONTENTS

Chapter 1- Cost-volume profit (CVP) analysis……………………………..3

Chapter 2- Standard costing and variance analysis…………………………8

Chapter 3- Variable costing and absorption costing…………………….. .15

Chapter 4- Financial planning and budgets……………………………… 17

Chapter 5- Activity-based costing (ABC) and

activity-based management (ABM)………………………..20

Chapter 6- Strategic cost management………………………………….…23

Chapter 7- Responsibility accounting and transfer pricing………………..27

Chapter 8- Capital Budgeting……………………………………………...30

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 Chapter 1

Cost-Volume Profit (CVP) Analysis

Cost-volume-profit (CVP) analysis is used to determine how changes in costs and

volume affect a company's operating income and net income. In performing this

analysis, there are several assumptions made, including:

Sales price per unit is constant.

 Variable costs per unit are constant.

 Total fixed costs are constant.

 Everything produced is sold.

 Costs are only affected because activity changes.

 If a company sells more than one product, they are sold in the same mix.

CVP analysis requires that all the company's costs, including manufacturing, selling,

and administrative costs, be identified as variable or fixed.

Contribution margin and contribution margin ratio

Key calculations when using CVP analysis are the contribution margin and the

contribution margin ratio. The contribution margin represents the amount of income

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or profit the company made before deducting its fixed costs. Said another way, it is

the amount of sales dollars available to cover (or contribute to) fixed costs. When

calculated as a ratio, it is the percent of sales dollars available to cover fixed costs.

Once fixed costs are covered, the next dollar of sales results in the company having

income.

Break-even point

The break‐even point represents the level of sales where net income equals zero. In

other words, the point where sales revenue equals total variable costs plus total fixed

costs, and contribution margin equals fixed costs. Using the previous information and

given that the company has fixed costs of $300,000, the break‐even income statement

shows zero net income

Break‐even point in units. The break‐even point in units of 250,000 is calculated by

dividing fixed costs of $300,000 by contribution margin per unit of $1.20.

CVP analysis is also used when a company is trying to determine what level of sales

is necessary to reach a specific level of income, also called targeted income. To

calculate the required sales level, the targeted income is added to fixed costs, and the

total is divided by the contribution margin ratio to determine required sales dollars, or

the total is divided by contribution margin per unit to determine the required sales

level in units.

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 Chapter 2

Standard costing and Variance analysis

Standard Costing Overview

Standard costing is the practice of substituting an expected cost for an actual cost in

the accounting records. Subsequently, variances are recorded to show the difference

between the expected and actual costs. This approach represents a simplified

alternative to cost layering systems, such as the FIFO and LIFO methods, where large

amounts of historical cost information must be maintained for inventory items held in

stock.

Standard costing involves the creation of estimated (i.e., standard) costs for some or

all activities within a company. The core reason for using standard costs is that there

are a number of applications where it is too time-consuming to collect actual costs, so

standard costs are used as a close approximation to actual costs.

Since standard costs are usually slightly different from actual costs, the cost

accountant periodically calculates variances that break out differences caused by such

factors as labor rate changes and the cost of materials. The cost accountant may

periodically change the standard costs to bring them into closer alignment with actual

costs.

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Standard Cost Variances

A variance is the difference between the actual cost incurred and the standard cost

against which it is measured. A variance can also be used to measure the difference

between actual and expected sales. Thus, variance analysis can be used to review the

performance of both revenue and expenses.

There are two basic types of variances from a standard that can arise, which are the

rate variance and the volume variance. Here is more information about both types of

variances:

 Rate variance. A rate variance (which is also known as a price variance) is the

difference between the actual price paid for something and the expected price,

multiplied by the actual quantity purchased. The “rate” variance designation is

most commonly applied to the labor rate variance, which involves the actual cost

of direct labor in comparison to the standard cost of direct labor. The rate

variance uses a different designation when applied to the purchase of materials,

and may be called the purchase price variance or the material price variance.

 Volume variance. A volume variance is the difference between the actual quantity

sold or consumed and the budgeted amount, multiplied by the standard price or

cost per unit. If the variance relates to the sale of goods, it is called the sales

volume variance. If it relates to the use of direct materials, it is called the material

yield variance. If the variance relates to the use of direct labor, it is called the

labor efficiency variance. Finally, if the variance relates to the application of

overhead, it is called the overhead efficiency variance.

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Standard Cost Creation

At the most basic level, you can create a standard cost simply by calculating the

average of the most recent actual cost for the past few months. In many smaller

companies, this is the extent of the analysis used. However, there are some additional

factors to consider, which can significantly alter the standard cost that is used. They

are:

 Equipment age. If a machine is nearing the end of its productive life, it may

produce a higher proportion of scrap than was previously the case.

 Equipment setup speeds. If it takes a long time to setup equipment for a

production run, the cost of the setup, as spread over the units in the production

run, is expensive. If a setup reduction plan is contemplated, this can yield

significantly lower overhead costs.

 Labor efficiency changes. If there are production process changes, such as the

installation of new, automated equipment, then this impacts the amount of labor

required to manufacture a product.

 Labor rate changes. If you know that employees are about to receive pay raises,

either through a scheduled raise or as mandated by a labor union contract, then

incorporate it into the new standard. This may mean setting an effective date for

the new standard that matches the date when the cost increase is supposed to go

into effect.

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 Learning curve. As the production staff creates an increasing volume of a product,

it becomes more efficient at doing so. Thus, the standard labor cost should

decrease (though at a declining rate) as production volumes increase.

 Purchasing terms. The purchasing department may be able to significantly alter

the price of a purchased component by switching suppliers, altering contract

terms, or by buying in different quantities.

Any one of the additional factors noted here can have a major impact on a standard

cost, which is why it may be necessary in a larger production environment to spend a

significant amount of time formulating a standard cost.

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 Chapter 3

Variable costing and Absorption Costing

Absorption Costing vs. Variable Costing: An Overview

Absorption costing includes all costs, including fixed costs, related to production,

while variable costing only includes the variable costs directly incurred in production.

Companies that use variable costing keep fixed-cost operating expenses separate from

production costs.

Some of the direct costs associated with manufacturing a product include wages for

workers physically manufacturing a product, the raw materials used in producing a

product, and overhead costs involved in manufacturing the product, such as batteries

to run machinery.

The fixed costs that differentiate variable and absorption costing are primarily

overhead expenses, such as salaries and building leases, that do not change with

changes in production levels. A company has to pay its office rent and utility bills

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every month regardless of whether it produces 1,000 products or no products at all,

for example.

Whichever costing method a company selects to use for accounting purposes, there

are advantages and disadvantages.

Absorption Costing

Absorption costing, also known as full costing, entails allocating fixed overhead costs

across all units produced for the period, resulting in a per-unit cost, unlike variable

costing, which combines all fixed overhead costs into one expense, reporting them as

a single line item on a balance sheet to be taken against net income. In contrast,

absorption costing will result in two categories of fixed overhead costs: those

attributable to the cost of goods sold and those attributable to inventory.

One of the big advantages of absorption costing is that it is the method required for a

company to be in compliance with generally accepted accounting principles (GAAP).

Even if a company decides to use variable costing in-house, it is required by law to

use absorption costing in any external financial statements it publishes. Absorption

costing is also the method that a company is required to use for calculating and filing

its taxes.

Absorption costing also provides a more accurate accounting of net profitability,

especially when a company doesn't sell all of its products in the same accounting

period in which they are manufactured. Every expense is allocated to products

manufactured whether or not they are sold.

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Variable Costing

Variable costing can make it more difficult to determine ideal pricing for its goods and

services since it does not directly consider all of the costs the company has to cover to

be profitable. However, by looking only at the costs directly associated with

production, variable costing makes it easier for a company to compare the potential

profitability of manufacturing one product over another.

However, absorption costing is not as helpful as variable costing for comparing the

profitability of different product lines. Variable costing, on the other hand, enables a

company to run a cost-volume-profit analysis. This analysis is designed to reveal the

break-even point in production by determining how many products a company must

manufacture and sell to reach the point of profitability.

Variable Costing in Financial Reporting

Although accounting frameworks such as GAAP and IFRS prohibit the use of

variable costing in financial reporting, this costing method is commonly used by

managers to:

 Conduct break-even analysis to determine the number of units needed to be sold

to begin earning a profit

 Determine the contribution margin on a product, which helps to understand the

relationship between cost, volume, and profit

 Facilitate decision-making by excluding fixed manufacturing overhead costs,

which can create problems due to how fixed costs are allocated to each product

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Variable Costing vs. Absorption Costing

Under variable costing, the following costs go into the product:

 Direct material (DM)

 Direct labor (DL)

 Variable manufacturing overhead (VMOH)

Under absorption costing, the following costs go into the product:

 Direct material (DM)

 Direct labor (DL)

 Variable manufacturing overhead (VMOH)

 Fixed manufacturing overhead (FMOH)

Chapter 4

Financial Planning and Budgets

Financial planning is a relatively new industry. (It’s a fancy name for a version of

what our parents used to call budgeting.) In Canada, there are well over 18,000

individuals qualified to call themselves Financial Planners and tens of thousands more

can call themselves Financial Advisors, Financial Consultants and Investment

Advisors some of whom may or may not have any set qualifications.

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Over the past few years investors have been told by these advisors how they need to

make financial planning one of their top priorities (where budgeting barely gets

mentioned). And this is true, but unfortunately you cannot have one without the other.

You first need to establish where your finances are today (your budget) before you

can dream and set goals for your future (your financial plan).

The most important aspects that you need to understand are outlined as follows:

 Household Budgeting

 Retirement Planning

 Education Planning

 Family Inventory

 Glossary

 InvestingForMe Tools

 Find an Advisor

Seeing the value of reaching a goal is often much easier than seeing a way to reach
that goal. People often resolve to somehow improve themselves or their lives. But
while they are not lacking sincerity, determination, or effort, they nevertheless fall
short for want of a plan, a map, a picture of why and how to get from here to there.

Pro forma financial statements provide a look at the potential results of financial
decisions. They can also be used as a tool to plan for certain results. When projected
in the form of a budget, figures become not only an estimated result but also an actual
strategy or plan, a map illustrating a path to achieve a goal. Later, when you compare
actual results to the original plan, you can see how shortfalls or successes can point to
future strategies.

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Budgets are usually created with a specific goal in mind: to cut living expenses, to
increase savings, or to save for a specific purpose such as education or retirement.
While the need to do such things may be brought into sharper focus by the financial
statements, the budget provides an actual plan for doing so. It is more a document of
action than of reflection.

As an action statement, a budget is meant to be dynamic, a reconciliation of “facts on

the ground” and “castles in the air.” While financial statements are summaries of
historic reality, that is, of all that has already happened and is “sunk,” budgets reflect
the current realities that define the next choices. A budget should never be merely
followed but should constantly be revised to reflect new information.

5.1 The Budget Process

The budget process is an infinite loop similar to the larger financial planning process.
It involves:

 defining goals and gathering data;

 forming expectations and reconciling goals and data;
 creating the budget;
 monitoring actual outcomes and analyzing variances;
 adjusting budget, expectations, or goals;
 redefining goals.

A review of your financial statements or your current financial condition—as well as

your own ideas about how you are and could be living—should indicate immediate

and longer-term goals. It may also point out new choices. For example, an immediate

goal may be to lower housing expense. In the short-term you could look for an

apartment with lower rent, but in the long run, it may be more advantageous to own a

home. This long-term goal may indicate a need to start a savings plan for a down

payment.

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The process of creating a budget can be instructive. Creating a budget involves

projecting realistic behavior. Your assumptions may come from your actual past

behavior based on accurate records that you have gathered. If you have been using

personal finance software, it has been keeping those records for you; if not, a

thorough review of your checkbook and investment statements will reveal that

information. Financial statements are useful summaries of the information you need to

create a budget.

After formulating realistic expectations based on past behavior and current

circumstances, you still must reconcile your future behavior with your original

expectations. For example, you may recognize that greater sacrifices need to be made,

or that you must change your behavior, or even that your goals are unattainable and

should be more realistic—perhaps based on less desirable choices. On the other hand,

this can be a process of happy discovery: goals may be closer or require less sacrifice

than you may have thought.

Whether it results in sobering dismay or ambitious joy, the budget process is one of

reconciling your financial realities to your financial dreams. How you finance your

life determines how you can live your life, so budgeting is really a process of mapping

out a life strategy. You may find it difficult to separate the emotional and financial

aspects of your goals, but the more successfully you can do so, the more successfully

you will reach your goals.

A budget is a projection of how things should work out, but there is always some

uncertainty. If the actual results are better than expected, if incomes are more or

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expenses less, expectations can be adjusted upward as a welcome accommodation to

good fortune. On the other hand, if actual results are worse than expected, if incomes

are less or expenses more, not only the next budget but also current living choices

may have to be adjusted to accommodate that situation. Those new choices are less

than preferred or you would have chosen them in your original plan.

To avoid unwelcome adjustments, you should be conservative in your expectations so

as to maximize the probability that your actual results will be better than expected.

Thus, when estimating, you would always underestimate the income items and

potential gains and overestimate the expense items and potential losses.

Chapter 5

Activity-based costing (ABC) and Activity-based management (ABM)

Activity Based Costing (ABC) and Activity Based Management (ABM) are

utilised to gain a fuller understanding of the real cost dynamics and cost structures

involved in business operations. ABM together with ABC principles can enable

managers to better understand (a) both product and customer profitability, (b) the cost

of business processes, and (c) how to improve them.

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ABM systems are a very effective means for improving company performance on

many fronts. An organisation can realise the power of ABM when the right

individuals access the right information in the best format for improving performance.

 The quality of the initial model. An essential point to note is that the chosen

implementation team will ultimately be responsible for developing a tool that

could change the way the organisation views its total operations.

 Ongoing maintenance - excessive maintenance requirements have been known to

destroy the effectiveness of ABM implementations which are by nature heavily

data dependent. Some ABC data can be automatically retrieved, however much of

the information needs to be entered manually. Successful ABM systems must

maintain a balance between the value being generated by the system and the level

of ongoing maintenance effort required.

 Communications - it is wise to establish a strong communication program,

particularly during the first year after the ABM implementation. Management

should regularly engage in reviewing and understanding the periodic results of

the systems with operational managers. An agreed common language is

recommended to minimize miscommunications.

In summary, the keys to the successful implementation of ABM systems are seen as

being the development programmes that are:

 Simple to maintain on an ongoing basis and which,

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 Promote a cultural change concerning how management uses cost information to

drive better decisions.

Experience has demonstrated that non-profitability-based segmentation (e.g., based on

revenue, balances or number of products) can encourage behaviour that rewards

retention of "high touch", and generally less profitable, customers. Best practice

organisations explicitly measure and manage the true profitability of each customer

relationship. This has been achieved by using the following:

 Activity Based Pricing (ABP);

 Linking ABC information into Performance Management scorecards and

processes;

 Providing information supporting cost improvement needs and facilitating

ongoing accountability for management, and information concerning the

profitability of customer relationships.

Activity-Based Management (ABM) as an "approach to management that aims to

maximize the value adding activities while minimizing or eliminating non-value

adding activities." The overall objective of ABM is to improve efficiencies and

effectiveness of an organization in securing its markets. It draws on activity based-

costing (ABC) as its major source of information and focuses on

(1) reducing costs,

(2) creating performance measures,

(3) improving cashflow and quality and,

(4) producing enhanced value products

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Activity-based management (ABM) is a procedure that originated in the 1980s for

analyzing the processes of a business to identify strengths and weaknesses.

Specifically, activity-based management seeks out areas where a business is losing

money so that those activities can be eliminated or improved to increase profitability.

ABM analyzes the costs of employees, equipment, facilities, distribution, overhead

and other factors in a business to determine and allocate activity costs.

Types of Activity-Based Management (ABM)

There are two main types of activity-based management:

1. Operational activity based management (doing things right) – this relates to making

the organization more efficient by reducing the cost of the activities and eliminating

those activities that do not add value.

2. Strategic activity based management (doing the right thing) – which essentially

involves deciding which products to make, and which customers to sell to, based on

the more accurate analysis of product and customer profitability that activity based

costing allows.

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 Chapter 6

Strategic Cost Management

1.1 Strategic Management

The analyses, decisions, and actions an organization undertakes in order to create and

sustain competitive advantages. The essence of strategic management is the study of

why some firms outperform others: strategy is all about being different from everyone

else.

The four key attributes of Strategic Management are:

1) It is directed toward overall organizational goals and objectives;

2) It includes multiple stakeholders in decision making;

3) It requires incorporating both short-term and long-term perspectives;

4) It involves the recognition of trade-offs between effectiveness and efficiency.

Stakeholders

Individuals, groups, and organizations who have a stake in the success of the

organization, including owners (shareholders in a publicly held corporation),

employees, customers, suppliers, and the community at large.

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Effectiveness

Tailoring actions to the need of an organization rather than wasting effort, or “doing

the right thing.”

Efficiency

Performing actions at a low cost relative to a benchmark, or “doing things right.”

Operational Effectiveness

Performing similar activities better than rivals.

Ambidexterity

The challenge mangers face of both aligning resources to take advantage of existing

product markets as well as proactively exploring new opportunities.

1.2 The Strategic Management Process

Three ongoing processes that are central to strategic management are analyses,

decisions and actions. These three processes, referred to as strategy analysis,

formulation and implementation, are highly interdependent.

An alternative model of strategy development:

 Intended strategy: strategy in which organizational decisions are determined only

by analysis.

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 Realized strategy: strategy in which organizational decisions are determined by

both analysis and unforeseen environmental developments, unanticipated

resource constraints, and/or changes in managerial preferences.

1.3 The Role of Corporate Governance and Stakeholder Management Corporate

Governance

The relationship among various participants in determining the direction and

performance of corporations. The primary participants are:

1) the shareholders;

2) the management (led by the chief executive officer);

3) the board of directors.Generating long-term returns for the shareholders is the

primary goal of a publicly held corporation.

There are two opposing ways of looking at the role of stakeholder management in the

strategic management process:

1) Zero sum: the role of management is to look upon the various stakeholders as

competing for the organization’s resources. In essence, the gain of one individual or

group is the loss of another individual or group.

2) Stakeholder symbiosis: stakeholders are dependent upon each other for their

success and well-being. That is, managers acknowledge the interdependence among

employees, suppliers, customers, shareholders and the community at large.

Social responsibility

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The expectation that businesses or individuals will strive to improve the overall

welfare of society.

Triple Bottom Line

The assessment of a company’s performance in financial, social and environmental

dimensions.

1.4 The Strategic Management Perspective: An Imperative throughout the

Organization

To develop and mobilize people and other assets, leaders are needed throughout the

organization. Everyone must be involved in the stratgic management process. There is

a critical need for three types of leaders:

1) Local line leaders who have significant profit-and-loss responsibility;

2) Executive leaders who champion and guide ideas, create a learning infrastructure

and establish a domain for taking action;

3) Internal networkers who, although they have little positional power and formal

authority, generate their power through the convinction and clarity of their ideas.

Top-level executives are key in setting the tone for the empowerment of employees.

There are two perspectives of leadership:

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1) Romantic view of leadership: situations in which the leader is the key force

determining the

organization’s success – or lack thereof.

2) External view of leadership: situations in which external forces – where the leader

has limited influence - determine the organization’s success.

1.5 Ensuring Coherence in Strategic Direction

Hierarchy of goals

Organizational goals ranging from, at the top, those that are less specific yet able to

evoke powerful and compelling mental images, to, at the bottom, those that are more

specific and measurable.

Vision

Organizational goal(s) that evoke(s) powerful and compelling mental images.

Mission Statement

A set of organizational goals that include both the purpose of the organization, its

scope of operations, and the basis of its competitive advantage.

Strategic Objectives

A set of organizational goals that are used to operationalize the mission statement and

that are specific and cover a well-defined time frame. They must be measurable,

specific, appropriate, realistic and timely.

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 Chapter 7

Responsibility Accounting and Transfer Pricing

General characteristics:

 Knowledge of the centers' mangers is difficult to acquire, maintain or analyze at

higher levels

 Decision rights are specified for each center

 Performance measurement is obtainted from internal accounting system.

Also the three legged stool is applied here:

1. performance measurement through MAS

2. Reward = related to specific knowledge

3. Relevant decision rights specified for each center

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Control is maintained in a decentralized organization through the establishment of

responsibility centers. A responsibility center can be thought of as a set of activities

and/or resources assigned to a sub unit manager. Reporting upward is achieved

through the use of responsibility accounting (the sub unit manager is responsible for

only those activities or resources that the manager actually controls).

There are four types of responsibility centers as follows:

1. Cost Center: Manager only has control over costs

2. Revenue Center: Manager only has control over revenue

3. Profit Center: Manager has control over both costs and revenue

4. Investment Center: Manager has control over costs, revenues, and operating

assets

Most large organizations have both operating departments and service departments.

The central purpose of the organization are carried out by its operating departments.

On the other hand, service departments exist to provide assistance to other

departments. Examples of service departments are human relations, security, payroll,

legal, etc.

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Since service departments exist to support operating departments, the costs of the

service departments must be covered in long run by the sales of products and

services. Thus to properly evaluate overall organization performance, service costs

must be allocated in the operating departments. Service department costs are

allocated to operating departments for a variety of reasons including:

1. Encourage operating departments to make wise use of service

department resources

2. Provide operating departments with more complete cost data for

making decisions

3. Help measure the profitability of operating departments

4. Create an incentive for service departments to operate efficiently

5. To value inventory for financial statement purposes

There are three principal methods of allocating service department costs:

a. Direct method

b. Step method

c. Algebraic method

The direct method allocates all service costs directly to operating departments. Thus

it ignores the services provided by one service department to another service

department. Please review the example of Lewis & Clark Pharmaceuticals and its

three service departments and two operating departments on Pages 522-4. Note that

the costs of administration, personnel, and maintenance are allocated directly to the

operating departments of Nutritionals and Vision Care. Also note that the allocation

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base attributable to the service departments whose cost is being allocated is always

ignored. The advantage of this allocation method is that it is simple to calculate; its

disadvantage is that it may not be very accurate in that it ignores interdepartmental

services.

There are three common approaches to transfer pricing as follows:

1. Cost based - can be either variable cost or full cost

2. Market based - the price charged on the open market for the good or service

3. Negotiated - the transfer price is set through a process of bargaining between

Chapter 8

Capital Budgeting

Capital expenditure budget or capital budgeting is a process of making decisions

regarding investments in fixed assets which are not meant for sale such as land,

building, machinery or furniture. The word investment refers to the expenditure which

is required to be made in connection with the acquisition and the development of

long-term facilities including fixed assets. It refers to process by which management

selects those investment proposals which are worthwhile for investing available

funds.

For this purpose, management is to decide whether or not to acquire, or add to or

replace fixed assets in the light of overall objectives of the firm. What is capital

expenditure, is a very difficult question to answer. The terms capital expenditure are

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associated with accounting. Normally capital expenditure is one which is intended to

benefit future period i.e., in more than one year as opposed to revenue expenditure,

the benefit of which is supposed to be exhausted within the year concerned

Nature of Capital Budgeting

Nature of capital budgeting can be explained in brief as under:

 Capital expenditure plans involve a huge investment in fixed assets.

 Capital expenditure once approved represents long-term investment that cannot

be reserved or withdrawn without sustaining a loss.

 Preparation of coital budget plans involve forecasting of several years profits in

advance in order to judge the profitability of projects.

It may be asserted here that decision regarding capital investment should be taken

very carefully so that the future plans of the company are not affected adversely.

Procedure of Capital Budgeting

Capital investment decision of the firm have a pervasive influence on the entire

spectrum of entrepreneurial activities so the careful consideration should be regarded

to all aspects of financial management.

In capital budgeting process, main points to be borne in mind how much money will

be needed of implementing immediate plans, how much money is available for its

completion and how are the available funds going to be assigned tote various capital

projects under consideration. The financial policy and risk policy of the management

should be clear in mind before proceeding to the capital budgeting process. The

following procedure may be adopted in preparing capital budget.

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Significance of capital budgeting

The key function of the financial management is the selection of the most profitable

assortment of capital investment and it is the most important area of decision-making

of the financial manger because any action taken by the manger in this area affects the

working and the profitability of the firm for many years to come. The need of capital

budgeting can be emphasised taking into consideration the very nature of the capital

expenditure such as heavy investment in capital projects, long-term implications for

the firm, irreversible decisions and complicates of the decision making. Its importance

can be illustrated well on the following other grounds:

 Indirect Forecast of Sales. The investment in fixed assets is related to future sales

of the firm during the life time of the assets purchased. It shows the possibility of

expanding the production facilities to cover additional sales shown in the sales

budget. Any failure to make the sales forecast accurately would result in over

investment or under investment in fixed assets and any erroneous forecast of asset

needs may lead the firm to serious economic results.

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