Lexmark

With Paint-Pen having a debt ratio of 22.74%, Paint-Pen is less risky and has high debt capacity. Adding this high capacity to borrow will add to the value of the combined firm. This acquisition will increase the debt capacity of the combined firm. Aside from the tax benefits that can be exploited after acquiring Paint-Pen, Mr. Hamer’s firm can also put value to the effect of diversification as the firm can diversify by just at the acquisition cost (less other synergies).

The most obvious reason for the difference between the market value of equity and the book value of equity is the inability to record certain intangible assets such as brand value, customer loyalty, and perhaps most importantly, human capital. These intangible assets are likely to provide tremendous earnings growth in the future which determines the company’s market value. Notice also that the company’s choice of conservative accounting policies has the effect of depressing the company’s book value of equity.

The purpose of this paper is to advise analyze the financial statements of Dillard’s, Inc. in order to recommend whether or not my client should invest $1 million in the large retail company. I will compare the financial statements of Dillard’s, Inc. its competitor, Kohl’s Corporation. Investing in retail can be risky because a retail company’s performance is very heavily influenced by factors that have nothing to do with the actual company such as the overall performance of the economy or the weather during the holiday shopping season. There is, however, potential for profitability within the retail sector. Based on my analysis, I recommend that the client should not invest in Dillard’s, Inc. for the following reasons. First, Dillard’s has experience a decline in net income in the last three years. Second, liquidity ratios indicate that they could face possible liquidity constraints in the future. Third, long-term debt paying ability ratios indicate that the company could have trouble paying off the principal of its current debt obligations. Fourth, the profitability ratios are well below industry averages, suggesting that there are more profitable companies to invest in within the industry. And finally, Investor analysis ratios provide mixed opinion of the future performance of the company. I conclude that retail can be a profitable industry to invest in if an investor has the risk tolerance and risk capacity to withstand the uncertainty, but neither Dillard’s

1. From early 1990s to 2004, the Lego Group, a long successful toymaker with a world-renowned brand, fell into the edge of bankruptcy. Compared with the highest revenue in 1999, the revenue in 2014 decreased by 35.6% while the net profit was negative, seven times less than that in 1999, the lowest in the past ten years. Its net profit margin and ROE were also the lowest. The gross margin and inventory turnover were all lower than its competitors. The strategic moves in the two main periods “growth period that wasn’t” (1993-1998) and the “fix that wasn’t” (1999-2004) lead to its poor performance.

While it was foreseen that the company would initially take financial setbacks because of the reorganization, it was not believed that the financial risks would be drastic. However, the impending report that Mr. Elesser has to present to the board will detail a net income that will be nearly 26 million dollars in the red for 2004 (see exhibit 2)3. The blunt force restructuring met resistance on numerous fronts. First of all, the various components of the company did not operate under the same uniformed leadership objectives. Each division was set up to look out for their own interests and markets. When the restructuring plan that focused on a more centralized management process, many of the things that worked for one division did not necessarily work for other divisions of the company. This left some divisions at a severe disadvantage. Another obstacle that worked against the restructuring was the employee unions in which the company had to deal. The unions were not on board with the various downsizing and restructuring methods. In addition, the company had to deal with a couple of different unions which posed a problem with negotiating tactics. Benefit costs were also a significant investment that did not hold up well under the auspice of restructuring.

It is important for stockholders to continuously re-evaluate their investments. Although some investors do this more frequently and thoroughly than others, the majority of shareholders do so at least once each year. Therefore, Torres’ desire to update her analysis in order to determine whether Costco was still operating efficiently makes perfect sense. After thorough examination, my analysis proves that Costco remains one of the industry’s leading competitors and there seems to be no reason for Torres to sell her shares as long as she wishes to retain holdings of a retail wholesale club in her portfolio.

Office Depot is a supplier of office products and services. The company's selection of brand name office supplies includes business machines, computers, computer software and office furniture, while its business services encompass copying, printing, document reproduction, shipping, and computer setup and repair. An S&P 500 company, Office Depot generates revenues of over US $14 billion annually and has 42,000 employees worldwide. It is headquartered in Boca Raton, Florida. Office Depot is one of the biggest office supplies retailers, but its sales revenue decreased dramatically 26% from 14.5 billion dollars in 2008 to 10.7 billion dollars in 2012.

There was an interesting article that was shown on the news recently. This article involves the printer giant Lexmark and a small company from Charleston, WV called Impression Products.. Lexmark as everyone knows, manufactures printers and the cartridges that are made for those printers. Lexmark printer cartridges have a computer chip on it that sends metadata to Lexmark for tracking purposes. The company Impression Products refills and refurbishes the ink cartridges manufactured by Lexmark and sells them to consumers cheaper than Lexmark. This action would send Lexmark and Impression Products to America’s highest court.

From 2000 to 2001 (exhibit 2), RIM’s revenue grew 160% from $85 million to $221 million. RIM has an extremely strong balance sheet after completing a follow-on equity offering in November 2000 that raised $ 590 million. Therefore, RIM has very strong financial assets for financing their growing opportunities. In term of one single item on balance sheet, RIM has $50.8 million liquid asset to finance any small valued opportunities, and the sales of new equity indicates the investors’ confidence towards RIM.

MRC, Inc. is a Cleveland based manufacturing company specialized in power brake systems for trucks, buses, and automobiles; industrial furnaces and heat treating equipment; and automobile, truck and bus frames. As till 1957 most of MRC's sales were made to less than a dozen large companies in the automotive industry, it was exposed to the risk inherent in selling to a few customers in a very cyclical and competitive market. To minimize the risk and to explore new business opportunity MRC's management decided to diversify their business operation. After their fifth successful acquisition, the CEO of MRC Archibald Brinton faced with a dilemma of whether to buy American Rayon, Inc.

The purpose of this report is to perform a comparative analysis of the profitability of two potential equity investments: Auto Wash Bot Ltd. (AWBL) and Popeye’s Muscle Wash Ltd. (PMWL). AWBL is selling 50% ownership for $100,000 in efforts to pursue expansion in the mobile device industry, and PMWL is selling 100% of its business for $100,000 to pursue retirement. A complete analysis of each company’s income statement will report key issues in both firms, as well as offer a

Sears grew up to the world’s largest retailer by expanding annual sales through diversifying sale products, such as apparel, cosmetics, jewelry, electronics, household appliances, cookware, bedding and hand-tools. This article shows that Sears suffered from a cost increase in 1997, including lawsuits, credit collectibles and sales in Mexico. Besides, the flexible payment facility that Sears offered is also a reason for cost increase. These problems brought Sears with bad debt and hence decreased the cash flow. The problems of the company came from the liquid market security, so I emphasize the flowing concepts:

$24.7bn. Why do you think the market reacted so negatively to Lucent’s announcements of the

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)

Xerox's "Book In Time" is a revolutionary product, presenting some new opportunities for the company. It is simply a matter of costs. The Book-in-Time equipment allows for a publishing company to produce a 300-page book for $6.90, something which could have been previously reached only for lots larger than 1,000 copies. A significant decrease in publishing costs, given the fact that these cover up to 20 % (including the paper and binding the book), would create the possibility of an increased profit margin.