How is marketing accounted for at visa inc

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Reference no: EM131011038 , Length: 1350 Words

ASSIGNMENT QUESTIONS

1. Analyze Visa's income and expenditure.

- What is the primary source of Visa's revenues? Who is it specifically (banks? Customers? Stores?)

- Which source of revenue has the highest growth rate (2009 to 2013)

- While Visa's business model is described as a technology payments company, Visa Inc. does not fall under the typical definition of a technology company. What is the largest category of expense on its P&L?

- Other observations re Visa's income and expenditures

2. How is marketing accounted for at Visa Inc.?

Does the income statement fairly value the impact of the marketing expense? If not, where does the value from the marketing expense show up?

Other thoughts?

3. Explain Visa Inc.'s balance sheet.

What has visa been doing with its earnings ... particularly in 2013

What type of asset carries most of Visa's book value? How does this differ from a manufacturing company?
Other observations?

4. What is the relationship between book value and market value?

Is the market to book ratio growing?

Why is the market value greater than the book value?

5. How should we value brands? What are the challenges?

Does it appear that the valuation of the brand is an exact science? What was the range of valuations from the agencies that estimate the value of the brand?

6. What is the impact of accounting decisions on the ratios?
Marketing expenses are expensed on the income statement as they are incurred but the benefit is more like a capital expense

... something that has a long term impact in strengthening the brand. If you treated it at a long term investment like plant and equipment not as a short term expense ...

- What would be the impact in the income statement?

- Balance sheet?

- Which ratios would be impacted?

Attachment:- visa_spreadsheets.zip

Reference no: EM131011038

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