Assessing a Company's Financial Future Essay

Climbing from $146.9 million in 2007 to $528.8 million in 2013, the net cash provided by operating activities has almost tripled and reached a CAGR of 23.79%.

3. SciTronics had a total of $75000 of capital at year-end 2008 and earned, before

The fixed-asset turnover: This ratio measures a company's ability to generate net sales from fixed-asset investments

Futronics Inc. is a $2 billion firm that sells communications services. Founded in 1937, Futronics Inc. has provided consumer products, as well as government systems and services, for well over half a century. Due to a sharp increase in competition, flattened sales, and external economic conditions, Futronics Inc. is implementing a corporate overhead reduction program. The proposal is to replace the company’s central office stores with outside vendors. The investment will cost $1,000,000 and yield incremental cash flows of $450,000 in year one (1), $350,000 in year two (2), $300,000 in year three (3), and $250,000 in year four (4). There is no salvage value of the asset, and the firm has a cost of capital of 8%. Using capital budget methods, Net Profit Value, Internal Rate of Return and Payback method, the capital investment can be appraised. Futronics Inc.

share increased an average of 27% per year. This remarkable increase in earnings did not go

5. SciTronics owed its supplies $6,000 at year end 2008. This represents 8.1 percent (6,000/74,000) of cost of goods sold and was a decrease from 11.63% (5,000/43,000) at year end 2005. The company appears to be more prompt in paying its suppliers in 2008 than it was in 2005.

3. SciTronics had a total of $159,000 of capital at year-end 2008 and earned, before interest but after taxes (EBIAT), $16,000 in 2008. Its return on capital was 13.54% in 2008, which

Reinvestment Returns: I found "b" (the reinvestment rate) by using exhibit 1 to calculate the percentage of net income per share of common stock that is paid out in dividends, and subtracting it from 1 to solve for the percentage reinvested. The return on equity, "k", is found by dividing net income (exhibit 1) by book value (exhibit 2). G = b*k shows g = 8.14%.

Return on Assets (ROA) of 8.74% and Return on Equity (ROE) of 12.4% are both positive.

$10,644,800 / $2,271,400 = 4.69 Times Return on Common Stockholders’ Equity (2002) $647,645 / $1,928,960 = 33.58% Return

The productive assets of property, plant, and equipment changed dramatically in 1996 they were 5,581 to 2010 an increase to 21,706. In total current assets there was a increase in 1996 from 5,910 to in 2010 21,579. Another significant change is in long term debt in 1996 of 1,116 to in 2010 an increase to 14,041. Also an important figure to note is in the retained earning in 1996 they were 94% (15,127) to 2010 68%

Asset turnover has trended downward slightly from 1.46 in 1983 to 1.32 in 1986 due to a decline in inventory turnover (3.99 in 1983 and 3.16 in 1985). In addition, any AMT"s product sits in inventory 255 days before being sold (for 1985). The fixed asset turnover ration has trended upward (from 14.6 in 1983 to 17.1 in 1985) indicating low capital intensity.

Using the WACC method, we first derived UST’s return on assets (rA). Since we are given the firm’s market capitalization, debt and cash, we calculated the current Enterprive Value of UST. We were then able to derive the return on asset as a function of UST’s market value. Specifically, we followed the below steps:

Net income totaled $97.8 million in 1984, an increase of 5% from 1983.when looking at the Consolidated Balance Sheet (Exhibit2), we found that the total assets grew 15% to $2.7 billion at the end of fiscal 1984 due to addition of real estate inventories as part of the acquisition of another company. The ratio of debt to total capitalization jumped to 43% at 1984 from 20% at previous year.

The return on equity, ROE, is as high as 20.69% (above 15%). It illustrate that the RL Corporation uses the investors’ money pretty effectively. As of return of assets, equals to 13.10%, which reveals how much profit a company earns for every dollar of its assets. Both ROE and ROA for RL Corporation seems really good and they provide a picture that managers are doing a good job of generating return from shareholders’ investments.