AON Manages A Diverse Array of Goods and Services Week 10 Case: Accounting at AO
ID: 2469459 • Letter: A
Question
AON Manages A Diverse Array of Goods and Services
Week 10 Case: Accounting at AON
Here is some information about AON from its web site:
Aon plc is the leading global provider of risk management, insurance and reinsurance brokerage, and human resources solutions and outsourcing services.
Aon Advantage
Our key advantage is our broad view of two of the most important issues in our economy today: risk and people. With an employee base of 62,000 people working in more than 120 countries, we can anticipate how changes in one sector impact another.
Another advantage is our client focus: Every day our employees ask, “How can we help a client or how can we help a colleague help a client?” Because each of our client groups has unique needs, our professionals—coordinated by strategic account managers, or relationship managers—specialize by product, function and client industry. By truly listening to you and working with you as a partner, we can best develop solutions that work seamlessly with your business. Only in this manner can we help you uncover risks and discover new opportunities to make your business more successful, now and into the future.
Company Highlights
Aon provides more insurance brokerage, reinsurance brokerage (Links to an external site.) and risk management services (Links to an external site.) than any other company in the world, and is a leader in human capital management consulting (Links to an external site.). Aon has 62,000 employees in more than 120 countries.
Backed by broad resources, industry knowledge and technical expertise, Aon professionals help a wide range of clients develop effective risk management and workforce productivity solutions. Aon plc's total revenue for 2010 was $8.5 billion.
Products & Services
By Specialty
AonLine (Links to an external site.)
Aon RiskConsole (Links to an external site.)
Aon SafetyLogic (Links to an external site.)
iVOS (Links to an external site.)
Consulting (Links to an external site.)
Benefits Administration (Links to an external site.)
HR Business Process Outsourcing (Links to an external site.)
Analytics (Links to an external site.)
Client Services (Links to an external site.)
Facultative Reinsurance (Links to an external site.)
Inpoint (Links to an external site.)
Investment Banking Group (Links to an external site.)
Practice Groups (Links to an external site.)
Treaty Reinsurance (Links to an external site.)
Actuarial Risk Assessment (Links to an external site.)
AGCN (Global Client Solutions) (Links to an external site.)
Bed Bug Insurance (Links to an external site.)
Captive Management (Links to an external site.)
Casualty Risk Control (Links to an external site.)
Casualty Risk Management (Links to an external site.)
Claims Consulting (Links to an external site.)
Corporate Investigative Solutions (Links to an external site.)
Crisis Management (Links to an external site.)
Directors' and Officers' Liability (Links to an external site.)
Enterprise Risk Management (Links to an external site.)
Ergonomics (Links to an external site.)
Environmental (Links to an external site.)
Errors & Omissions (Links to an external site.)
Fire Protection Engineering (Links to an external site.)
Kidnap & Ransom Insurance (Links to an external site.)
Mergers & Acquisitions (Links to an external site.)
Political Risk Management (Links to an external site.)
Private Risk Management (Links to an external site.)
Product Recall and Contamination (Links to an external site.)
Property Risk Control (Links to an external site.)
Property Risk Management (Links to an external site.)
Terrorism Risk (Links to an external site.)
· eSolutions (Links to an external site.)
· Group and Individual Insurance (Links to an external site.)
· Human Resources (Links to an external site.)
· Reinsurance (Links to an external site.)
· Risk Solutions (Links to an external site.)
Questions To Answer:
1. AON operates on a world-wide basis and is a gigantic and complex company with a vast array of products and services. What role does accounting play at AON?
2. Explain why it is said that the Balance Sheet is a “snap shot” and the Income Statement is a “Movie” of an organization’s financial picture.
3. If you were considering investing in AON, what accounting and financial information would you want to have in order to decide whether or not to invest in this company? Why? Please explain your answer.
Explanation / Answer
1 The accounting process consists of measuring and summarizing business activities, interpreting financial information, and communicating the results to management and other decision makers. Hence for proper functioning and survival of business entity, particularly a world wide based company, it is quite essential that that various entities located at various places need to be co ordinated and the functions are accounted, analysed and decisions are taken upon hence accounting plays a major role in AON 2 balance sheet gives overall position of services and activities performed by the organisation and hence named as snapshot as it gives a jist or review of all the balances and state of the entity However,Income statement records and classifies every transaction pertaining to income and expenditure and there by contributes to a complete picture of all the transactions happening. Hence it is termed as "movie" 3 The following financial information is to be considered Chief Executive Officer (CEO) Like a ship captain, a company's executive officer steers, rights and can sometimes sink the ship, so it's important to know a company's CEO before investing Business Model A business model is essentially the strategy that a company uses to maximize its profit in its industry. Competitive Advantage a competitive advantage is when a company has a leg up over its competitors through its superior products, patents, brand power, technology or operating efficiency Revenue Revenue is simply the raw amount of money the company made from sales of its product or service. Revenue is sometimes called a company's "top line" as it's always listed as the first line of every company's income statement. Net Income More casually called profit, earnings or "the bottom line," net income is simply the amount of money a company earned from sales after expenses and taxes have been paid. Profit Margin Profit margin (sometimes referred to as net profit margin) is simply the percentage of revenue the company takes in as profit (after expenses, interest and taxes have been paid). Debt-to-Equity Ratio With the debt-to-equity ratio, we can find out how much debt a company carries compared to the amount of equity shareholders have in the company. Price-to-Earnings Ratio (P/E) Finding a company with strong financials is not enough. With a stock's price-to-earnings ratio (P/E), we can find out if a stock is overpriced. The P/E ratio compares a stock's price to the amount of profit per stock share (earnings per share) the company generated.