Essay on Cadbury to Be Swallowed Whole

1249 WordsOct 30, 20125 Pages
Cadbury To Be Swallowed Whole? 1. Emerging market is a financial market of a developing country, usually a small market with a short operating history. Monopoly power is the power of a monopoly firm where they are able to control or set a price in its market. 2. Kraft’s marketing strategy will benefit significantly from buying Cadbury in two different ways. Firstly, when we look at the brand portfolio of Kraft, which is the world’s second biggest food company. It is clear that there are plenty of old-timer cash cows, such as cheese, Nabisco and Suchard, but there are only very few rising stars. According to the Boston Matrix, cash cow means a product with a high share of a slow growth market, which can generate a stable…show more content…
3. Kraft’s current ratio: Current assets / current liability 2007: 2500+3800+400 / 10700 = 0.63 2008: 2300+4000+800 / 6900 = 1.03 Kraft’s acid test ratio: Current assets – stock / current liability 2007: 3800+400 / 10700 = 0.39 2008: 4000+800 / 6900 = 0.69 If Kraft generate £1.4 billion of cash to buy Cadbury, Current ratio 2008: (2300+4000+800)-4100 / 6900 = 0.43 The acid Test Ratio 2008: 6700-4100 / 10700 = 0.24 Liquidity ratios measure the business ability to pay all its short-term debts, it can be divided into current ratio and the acid test ratios. Current ratio examines the liquidity position of a firm, an ideal current ratio would be 1.5 : 1. The Acid Test Ratio provides us a tighter measure of a firm’s liquidity, by comparing current assets and liabilities after omitting stock from the total current assets. The ideal result for this ratio should be 1:1. These two ratios focus on the business financial stability on the short term only. Referring to this case, by looking at both ratios of Kraft, its obvious that they are having better year in 2008 as the

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