Discussion of Economics of Accounting from Contracting Perspective

A firm can be seen as a set of contracts, in which accounting information plays an important function of improving their efficiency. This memo discusses the contracting issues based on the team presentations in class, using Eli Lilly & Co. example. The two parts include the overview of Eli Lilly and the abbreviation of its sales contract. OVERVIEW OF ELI LILLY Goals & Objectives Eli Lilly devotes its effort to invent and sell new drugs, with a mission of helping people live longer, healthier, more active agent lives. Eli Lillys business goal is keeping constant institution of drugs. And its objective could be making profits by sell innovative drugs. Business Processes Under its business goal and objective, Eli Lillys business processes could be described as financing, investing in research and development, and selling. This circle of business processes ensures the normal function of the company. Sources and commit of Capital In general, a companys sources of cap be debt and equity. By looking at the recent financial statistics of Eli Lilly, team 1 figured out that the main source of Eli Lillys capital is debt rather than equity. Additionally, the rate of essential liabilities to total assets of Eli Lilly is some(prenominal) higher than that of the industry average.

Thus we can tell that Eli Lilly obtains its capital mainly from its debtors. On Eli Lillys recent balance sheet, it is not difficult to find that cash and cash equivalents together with short-term investment make a large portion of total assets. This could help guarantee the pay of debt and increase the liquidity of its assets. digest OF THE SALES CONTRACT Objective of parties In the sales contract, the two parties be Eli Lilly and its major node. The objective of Eli Lilly is selling the drugs and makeing a profit, while the customers objective could be getting the products under sexually attractive terms. For both of the parties, they will expect to maintain their cooperation to the future if the objectives... If you motive to get a full essay, order it on our website: Orderessay

If you want to get a full essay, wisit our page: write my essay .