Health promotion is of particular importance to midwives who promote health rather than manage disease and ill health. Although the midwife has always had a role in public health, there is now an explicit need for the profession to direct its attention to teenage pregnancy, smoking cessation, drug awareness and domestic violence. Much of the role of the midwife during pregnancy is in health promotion and a more explicit application of such may carry benefits in meeting Government policy on public health. Midwives should work in partnership with women and families, facilitating decisions about the care that they feel they may require. In facilitating change midwives seek to use their influence to the benefit of the pregnant woman.
costs of production. In the last eight years, we have had our costs of shipping almost triple, and simply are too much for us to properly handle without cutting into our bottom line. With the increasing costs and the weakening dollar, we have been unable to maintain a competitive advantage, and thus the decision to switch makes perfect sense. By using the FIFO method, we are expecting the prices to continue rising and our inventory will diminish starting with the oldest ones and moving to the more expensive. Thus, allowing for a greater net profit return. Using the FIFO method instead of LIFO affects the balance sheet by increasing retained earnings due to the higher income from a lower cost of goods sold. The FIFO method would increase inventory because there is less of a cost deducted from the account on the balance sheet. If prices remained stable over time, then Merrimack would likely still be caught up in this dilemma as we could have continued working with similar expenses, however, the weakening dollar entails a possible loss on our net income. Over the time, the only way to adjust and maintain a consistent net income every year would be to gradually increase the prices in order to ensure an adjustment to the changing conditions. Unlike the computer industry, in which prices fall over time due to the advances in technology and the cost of production decreases with more units built, we are unable to take advantage of LIFO in our scenario. With the falling prices in the computer industry and usage of LIFO, the net income gradually increases due to decreasing expenses over time. Switching to FIFO and the decrease in expenses would have a negative effect on our net income and would hurt our bottom line. With the decrease in net income, we would suffer from lower retained earnings which would lead to a great cause for concern.
We have decided to reach the conclusion that the best way to move forward is by switching from LIFO to FIFO methods. While this will entail a couple of changes in the way that we operate as a firm, there are no real disadvantages to switching this formula. We would like to begin by outlining what this change means in this years financial statements. Comparing Table 1 to Table 3 we are able to see the effects that come from switching methods. In the Last in First Out (LIFO) methods, the method we currently use, we receive a Net Income of $5,200,000 and realize a Cost of Goods Sold of $62,000,000. In comparison, the First in First Out (FIFO) methods, the method we will switch to, we receive a Net Income of $12,675,000 and realize a Cost of Goods Sold of $50,500,000. Looking at the raw numbers it seems pointless and illogical not to switch as our bottom line is hurt by the fact that we are maintaining a traditional approach in the times of change.
Certainly this change will not be favorable by everyone at this company due to the fact that there will be underlying considerations existing. While the shift in the Net Income will definitely be b
