Auror Unattractive Company

The remainder of this note discusses each of the steps in the process and then provides an exercise on the various financial measures that are useful as part of the analysis. The final section of the note demonstrates the relationship between a firm’s strategy and operating characteristics; and its financial characteristics.

The company’s cash has been decreasing over the 2 years however its current and quick ratio has gone up, from 2.26 to 2.53 and 1.06 to 1.26 respectively, due to its increase in accounts receivable and inventory, the company may need to minimize amount of sales based on credit or require however down payment on its installment sales. Haefren must also be offering more lenient credit terms to its customers since its average collection period has also gone up significantly, this could be correlated to the lax credit terms Wiegandt currently offers Haefren. Haefren’s return on equity is also declining, using the DuPont method, as a result of our low net profit margin and our decreasing asset turnover (as a result of lower sales and higher assets). The company currently finances itself with bank loans which have decreased while cash is decreasing, the increase in debt may be growing to an unsustainable rate as our debt to equity ratio has almost doubled from 5.84 to 9.37 between 1993 and 1994. This poses a major a problem for the corporation as cash and sales are decreasing and loans are increasing, the company may need to liquidate the warehouses. The warehouses could be a major factor in another problem: low profitability. Low operating profit margins of 1.6% suggests high operating expenses. The company may need to cut operating expenses by reducing by

Based on your analysis above, make at least two (2) recommendations as to how each company could improve its working capital positions. Provide support for your recommendations.

Nutracuticals is an online direct-to-consumer supplier of dietary supplements for women. The company based in Miami, FL offers vitamin supplements from over 50 brand names/suppliers. This firm is currently breaking even, and the decisions made over the next three phases of the business, each three years spanning from 2013-2021, will dictate the firm’s profitability. The decisions will be based on financing options and resources (cash) available to the firm in each phase. Decision-making will be based on the impact to the business metrics involved including: sales, EBIT, net income (profit), free cash flow (FCF), and the total firm value. For the purpose managing inventories, growth, and adding value to the firm, as CEO I have chose to exercise theses three phase options, to follow.

Vertical Analysis- In conducting the vertical analysis of the financial statements provided, I have found a few rather unfavorable results. First, I can’t help but notice that in 2014 Smith Enterprises has a measly 19% total assets in cash, and 20% total assets in cash in 2015. This may be a negative result of the company’s confined inventory by 22% in 2014 and 30% for 2015. If inventory is not being moved, there is no opportunity for cash, therefore, the cash account is being negatively affected overall. Next, when reviewing Smith Enterprises total liability, for 2014 the company’s total assets to total liability equals 50% in 2014, and 46% percent in the year 2015. While the total liabilities decreased by a total of 4% between 2014 and 2015, the company’s total liabilities are extremely unfavorable. By this I am expressing that 46% and 50% of how Smith Enterprises pays for their assets is with debt through accounts such as accounts payable, salaries payable, and notes payable. If the company were moving out inventory at a faster rate, the higher debt percentage may be justified as the company could pay off this debt quickly, but when tied up inventory is visible this leads me to believe that the debt percentage will stay within a few

As the financial analyst of the company, this report is written in respect to how the financial position of the company can be improved. This report is aimed for the senior management team.

Rapid Repair’s profitability appears good but their cash balance has shrunk. Write a report that provides a financial analysis

Cartwright is a retail distributor of lumber products. It built its competitive edge based on pricing and having a careful control over its operations. The company reported an operating income of $86,000 and $111,000 in 2003 and 2004, respectively. This is a 29% increase in operating income in one year, which shows the firm’s strong ability to generate cash. The firm’s account receivables and inventory are increasing from year to year which is a good sign of a growing business. Cartwright is not an asset intensive company. It does not have to have huge fixed assets; most of its assets are cash, accounts receivable and inventory which all depend on future sales. Sourcing of materials is managed very well, purchased at discounts most of the time and contribute to having lower prices.

Another reason was its bids conversion ratio which was falling year by year which can be seen from following table:

In this project, you will assess the financial health of the business in question, using financial analysis tools in your textbook. Please make your work neat and show all computations.

It was management’s opinion what consistent reliable business practices would add a sense of security to the company’s operations, employees and shareholders. The financial consistency of the company provided shareholders with comfort in their investment with the stock price at $43.92 in Year 6 and steadily rising to $128.11 by Year 12. As previously noted, the financial results were accomplished by providing consistent high net earnings on its operations each accounting year. The company did not incur long term debt and operated its business without having to utilized its bank operating line of credit (no interest cost), thus maintaining a healthy

The company’s creams inventory remains constant because it does not follow a trend in innovation and changes so often as the other products. The surplus in inventory is a big disadvantage since; last year’s products may not be in style this year in addition to the cost of storage. For all these reasons their cash flow is less in comparison with previous years causing that Luxor Cosmetics keeps increasing their bank loans, creating more debt, making it harder to pay out as 2011. In this particular situation the company could have either decrease its budgeted sales (productions) or increase its actual sales by improving more effective marketing strategy and research and development of its products in the markets. This way their inventory would decrease and their cash flow would increase. (Hopkins, 2009)

From the analysis, the underlying reasons for ABC to be in current state are the excessive borrowings to expand, high operating costs, poor credit control, constant issues on equity

When the firm is not able to or is difficult to honor the promises to the creditors, this situation is called financial distress. The firms need to figure out new ways to generate income and cut costs. At the same time, the money borrowed to finance the assets could be more expensive. As the financial institutions and banks may increase the rate charged for borrowed assets when a company is in financial distress. According to the definition of the financial distress, due to the increasing of the risk, the debts value of debt holders would devalue. From the perspective that the firm value is the sum of share value and the debt value, this decrease the firm value, and made it an important part of the costs of financial distress. In order to give the prediction of the value of the firm would survive, we need to know the history market performance, the history industry performance and the firm’s performance. For Capilano Honey Ltd, the agricultural commodities industry keeps growing in recent years and the growth rate is 13.38 percent in 2015, which is the highest rate in recent years.

It is not possible to comment on the financial position of the organisation as there is a mismatch of Asset and Liability side (Shown in the Suspense Account). Here at first it is required to find out the reason of such discrepancy. Once it is determined then the financial statement of the organisation need to prepared correctly again and then on the basis of the correct financial statement we can comment on the financial position of the organisation.