Essay about Haefren Baum

1205 WordsOct 6, 20145 Pages
Haefren Baum Nature of the Business 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. Marketing Analysis Located in downtown Cologne Haefren Baum is a high quality retailer, which recently expanded its operations by opening three retail outlet stores in nearby Rhineland suburban areas. The company carries…show more content…
This is evidence the company is having problems making profit. Haefren needs to address is the delinquency of their customers’ accounts, from 93 to 95, days sales outstanding have increased to 77 days, which is a lot higher than the 30-day monthly installment terms. The company is not stringent in collection efforts but this can be because of the economic condition in Germany. The company does not manage its assets very well. Its decrease in fix asset turnover from 6.98 in 1993 to 5.39 in 1995 can be because of their decrease in sales, but the low total asset turnover which is also decreasing from 2.1 to 1.5 prove that their assets are not being used very efficiently. Since sales are decreasing and competition increases their inventory days has also increased from 103 to 129 which again could cause low price. The company is already experiencing a loss of revenue due to the fact they lowered price because of economic condition. Financial Analysis The company have generated very low operating cash flows, which is caused by a negative net income(16, 55) in 94,95, again with sales going down and cost of goods sold increasing. The company current ratio (2.3, 2.1, 2.5) in 93, 94, 95 are indicating satisfactory but when analyze quick ratio (1.1, 1.1, 1.3), and we also know that sales are down which mean more inventories. Now the account payable days has been increasing (49, 62, and 66). They have been delaying there payment which mean more cash on

More about Essay about Haefren Baum

Open Document