Haefren Bum Case Analysis

Marketing analysis: Haefren Baum sells high quality home furniture, which is manufactured by German company, Wiegandt GmbH Cologne. The demand for high-end furniture is cyclical and influenced by consumer confidence and the overall economy. They have been incorporated since 1970, therefore they do have a reputation and brand image already built. They have been a customer of Wiegandt since 1968 and have maintained good relations so far. The German economy had a bust in 1993, which lead to a decline in furniture sales. This is evident in the sales dropping in 1993 to 1995 from $18,647 to $14,397. Much of the industry has to cut back prices to keep

To offer huge quality branded merchandise at 20% to 40% low prices below department stores. Provide one shop buying by arranging maximum house furnishing items (30,000 SKU) and offer superior service to make buying experience and BBBY so pleasurable that they become “word of mouth advertisers” of BBBY.

The company's inability to receive payments from customers in a timely manner created a severe impact in the company's cash flows. The age of account receivables increased each year. In 1995 it took 49 days on average to receive payments from customers. Because of the delay in accounts receivable, Clarkson Lumber's ability to pay suppliers on time is also impacted. In 1995 it took Clarkson 38 days on

Haefren Baum is an independent home furnishings retailer associated with Wiegandt that sells high quality furniture. The company began as a partnership in 1965. Haefren Baum became a retailer for Wiegandt in 1968. Two years later, it became a corporate entity. Haefren Baum is located in Cologne, which is one of the most populated and rich cities in Germany. Haefren retails home furnishing from a location downtown Cologne, and three recently constructed stores in Rhineland.

Source 1 is an image that is showing a man in a washroom washing his hands with soap. It can be made out that the man is white and of high social class. It is an advertisement about Pears’ soap and its advances in cleaning purposes. But on the other hand we can read the saying “The White Man’s Burden” which is used to indicate that white men have a responsibility o0f being paternalistic towards the first nations. In this case it is most likely first nations since in the background there are signs of ships and imperialism. The ideological perspective presented in the source is globalization. If there was no competition between the European countries it was most likely that America would have never been found. The links between the principles

Given the net sales in 2011 is still higher than 2010, we can assume the problem is most likely with its operating cost management. On the other hand, HH’s assets turnover rate dropping 0.30 from 2010 suggests an inefficiency of generating more sales with its increased assets in 2011.

The business is receiving some discounts by paying within the 10 day discount period. This is a good idea to cut costs and have more cash available, but the business is not receiving payment from their customers in a timely manner. This is shown by the 9 day increase in receivable days since 2002, from 41.9 to 50.9 (exhibit).

Reduce investment in net fixed assets. Horniman already seems to be operating efficiently. NFA turnover has increased strongly over the past year; in fact, there is valid concern that capital expenditures are going to need to increase going forward.

BBBY is special since they are selling products that are produced by name brand companies, and if any products needing repair could be sent directly back to the name brand company. Therefore, there are no switching costs for BBBY since they have no control on the quality of the products they sell. However, there fixed operating costs have been high and if management adds fixed operating costs to their business operations, without an increase in sales, the firm’s profit would decline and result in a loss, which is an indication of relatively high business risk.

If HCA chooses to remain at the current debt ratio take on a lower rating, suspicion might arise among investors. In both cases opportunities exist as well as consequences. The advantages and disadvantages are outlined in Scenario 1 - 3.

Disciplinary procedures are a set way for an employer to deal with disciplinary issues. They should include a disciplinary hearing where you’re given a chance to explain your side of the story.

An analysis of a repurchase of stock for $400 million cash, and recapitalization to 80% debt-to-total capital by borrowing $1.27 million reveals that BBBYs return on equity will be 113%, return on assets 61% and an after tax cost of debt of 28%. ROE is > ROA and ROA > after tax cost of debt. With the 80% debt-to-total capital structure ROE exceeds the other two capital structure scenarios of no debt and 40% debt-to-total capital. While all of this looks great there are other considerations. The household and personal products industries debt to total asset ratio is 34.69% while BBBY debt to total asset ratio is at 44% ($1,270,000/$2,865,023). Increasing to this capital structure would also reduce shareholders earnings per share.

Return on Total Assets was 4.43% which is below five percent. That indicates that the company is not accurately converting its assets into profit. The total for Return on Stockholders’ Equity was 8.89%, however financial analysts prefer ROE to range between 15-20 %. The company’s low ROE indicates that the company is not generating profit with new investments. Lastly, Debt-to-Equity ratio for the company was 1.01 which indicates that investors and creditors are equally sharing assets. In the view of creditors, they see a high ratio as a risk factor because it can indicate that investors are not investing due to the company’s overall performance. The totals of these three ratios demonstrate that the company’s financial state is not as healthy as it should be.

Harnischfeger’s corporate recovery plan was a four pronged approach that involved (1) changes in top management, (2) cost reductions to lower the break-even point, (3) reorientation of the company’s business and (4) debt restructuring and recapitalization. These changes at first glance appear to have allowed Harnischfeger to improve its financial performance from a net loss of $3.49 per share in 1983 to a net gain of $1.28 per share in 1984. In addition, Harnischfeger has appeared to have achieved a majority of its desired outcomes from each of its four changes as shown below.

1. Currently, the collection period of Oracle is at 137 days which is higher than the industry average of 62 days. The company must reduce credit terms implementing tighter credit control activities