Finance - Case Study
Situation - Computron (expansion Program) A. Sales have been below forecasted numbers B. cost have been higher than projected C. They suffered a profit loss instead of a gain D. Management, investors and directors are concerned. E. It'd tsking s long time for dvertisement programs to get across all business units, including sales and operations
Problem - Computron is faced with alot of problems that have impacted their business and caused them to suffer financially. Looking at some of their financial ratio will help give understanding to some of their immediate concerns.
Problem 1 - low liquidity (current Ratio)
In 2007, Computron liquidity dropped significantly from the previous year. Their
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Their inability to receive a payment has impacted their revenues. Days sales outstanding wouldn't be such a huge problem if Computron had buying power with their suppliers, but because they trail other companies in their industry, its apparent they do not have power to dictate when they will receive their payments.
Fixed Asset Turnover - (equipment plant under utilize/labour)
In 2007, fixed asset were 6.2 down from 2006 total of 10 and the industry total of 7. Computron struggles in communicating their ad program has hurt them in utilizing their fixed assets effectively. Their plant and equipment have experience a lot of down time instead of being put to use. Additionally, employees are not being utilized because with increased down-time, individuals may not be working efficiently to carry-out the company's business goals.
Debt management -high debt ratio
Debt ratio (80% - industry 50))- Computron incurred an enormous amount of debt in 2007, partly due to their financing the new project. Debt was the primary source of income to fund this project and with such a high debt ratio present problems with creditors. Creditors usually desire a lower debt ratio just encase Computron goes into bankruptcy or fold. Their debt ratio is considerably higher than the industry and with Computron struggles with liquidity it can be a huge burden on the company's ability to pay interest payments.
Solution - gain more leverage by cutting
Debt ratio percentages increased for Company G from 28.34% to 29.94%. Industry quartile is 30, 45 and 66 percent, putting Company G below average. Debt Ratio represents strength for Company G.
-Martin Industries just paid an annual dividend of $1.30 a share. The market price of the stock is $36.80 and the growth rate is 6.0 percent. What is the firm's cost of equity?
The company that I chose to analyze is Tootsie Roll. Throughout my life I have always had somewhat of a sweet tooth and have been very intrigued in the process of business. Now I have the opportunity to look further into such a great company such as Tootsie Roll and really find out how the business is run and what type of work is invested in such a well known business.
Life insurance is meant to provide funds to replace a breadwinner's to protect and support dependents. Chad and Haley are dependents, not income providers. Therefore, the purchase of life insurance is unnecessary and not recommended. The Dumonts should use the money they would spend on policies for the children to increase their own coverage.
Jones over forecasts his inventory and has a low inventory turnover ratio. This drastically increases his accounts payable, as he isn’t able to pay due to low cash inflow. His account’s payable increased by nearly 9 percent in 2006. Nearly half of his current assets are in inventory. Also Jones isn’t able to take advantage of the cash discounts offered by his suppliers due to his slow cash collection process. In order to perform well, the company must improve its inventory system and its cash collection policies.
3. Which is the most attractive customer segment for MBC to target? Explain your reasoning.
Target Corporation is having a very stable financial policy and dividend policy. From the historical financial data, Target had debt $11,044M, $11,202M, $10,599M, $17,471M, and $19,882M in the year of 2005,2006,2007,2008, and 2009 respectively. The long-term debt/equity ratio rises from 69.34% to 108%.
We are providing below the assumptions and other calculations we used while computing the WACC and the cash flows.
Will the company continue to expand their fixed assets such as property and equipment
If this ratio is high means company owns too many debts which may decrease their
Finally, in order to complete a more accurate comparison between the two projects, we utilized the EANPV as the deciding factor. Under current accepted financial practice, NPV is generally considered the most accurate method of predicting the performance of a potential project. The duration of the projects is different, one lasts four years and one lasts six years. To account for the variation in time frames for the projects and to further refine our selection we calculated the EANPV to compare performance on a yearly basis.
1. An international bank loaned money to an emerging country a few years ago. Because of the nonpayment of interest due on this loan, the bank is now negotiating with the borrower to exchange the loan for Brady bonds. The Brady bonds that would be issued would be either par bonds or discount bonds with the same time to maturity.
The purpose of this research paper is to prove that technology has been good for the stock market. Thanks to technology, there are now more traders than ever because of the ease of trading online with firms such as Auditrade and Ameritrade. There are also more stocks that are doing well because they are in the technology field. The New York Stock Exchange and NASDAQ have both benefitted from the recent technological movement.
E. Continued focus on improving efficiency and effectiveness in the organisation, from procurement, to supply chain to customer service delivery.
← Which remaining OS market are unlikely to respond to those marketing activities that are considered necessary to establish the g/s in the marketplace effectively? - will the market prevent/allow firm the achieve its objtvs?