Essay on Victoria Chemicals Case Analysis

Financial statements could be examined with varied degrees, as part of the client acceptance procedures Paige CPA got to perform a horizontal and vertical analysis, and financial ratio analysis of Vinand Petroleum financial statements. These procedures are not as in depth as other procedures used by auditors on financial statements, but these procedures may show areas of concern for auditors. From 2006 to 2007, Vinand’s long term debt tripled and its interest expense paid for the year did not reflect this drastic increase. This could mean that Vinand has taken on a large amount of debt with a low interest rate, which will not bode well for the financial health of the company in the future. In the same breadth,

Also, there are some concerns that if Merseyside would undergo renovations and is able to produce polypropylene cheaper than our sister plant at Rotterdam, then cannibalization would occur. We are not so sure that since we are in different geographical locations and service different areas that cannibalization would occur. But, if a problem would arise and cannibalization is suspected, Victoria Chemicals can enact a price averaging policy for both plants. Although Merseyside may be able to produce and sell polypropylene cheaper than Rotterdam if we average the sales price and have both plants sell at the same price it would alleviate this issue.

As Motorking Corporation considers introducing its now “gas extender” product into the market, the management must consider various factors to determine if this is a good financial move. The production manager needs to determine if the product will generate a profit for the corporation, how much product is expected to sell to determine how much to produce and how much to outsource.

b. Now assume that the cost to replicate Project S in two years is estimated to be $105,000 because of inflationary pressures. Similar investment cost increases will occur for both projects in Year 4 and beyond. How would this affect the analysis? Which project should be chosen under this assumption?

a. To maximize profit earned during this period, which production capacity should TMMC in 2000 decide to build - 10,000, 15,000, 20,000, 25,000, or 30,000 cars? Justify your choice.

Dow’s vice president of business development for Latin America, Oscar Vignart, and Luis Marcer, CFO of Dow Química Argentina are building the company’s cash flow projections for this particular project. In so doing, they have to assess the country’s risk; current political and economic conditions of Argentina, exchange rate stabilities, freedom of capital repatriation and the uncertainties of the project so they can justify it to the parent company. They had developed a three-stage operational strategy for their future polyethylene expansion in Argentina. The first stage is the acquisition of the PBB; the second stage is the acquisition of Polisur’s two polyethylene plants and the last stage is building a new ethylene cracker and a polyethylene plant. In order to help them decide, the cash flows from each stage of this big project have been valued using the discounted cash flow approach. They used a discount rate that was adjusted to incorporate the country

The marketing department wants exclusive rights to interact with the customers. However, it is currently done by the product manager. Marketing should have information about all new product development. However, the development process is separate from the marketing. The division of work is unorganized. Managers have lost sight of its integration responsibilities.

Dow Chemicals market maneuvers evidence the application of Business-level and Global-level strategies, as well as consideration of stakeholders profit levels. The Dow Chemicals Business-level strategy is indicated by the way it positioned itself in the marketplace by extracting some elements of a Differentiation strategy and some elements of a Cost Leadership Strategy to gain a competitive market advantage. By Differentiation strategy, I mean to say that Dow Chemical elected to seek a competitive advantage by creating new innovative products that their customer base considers to be unique and important, and maintaining a simple organizational structure.

Cost-volume-profit (CVP) analysis is the study of the effects of changes in cost and volume on a company’s profits.”(Kimmel, Weyandt & Kieso, 2003, p.263)

polypropylene, is priced as a commodity. Although Merseyside may outperform Rotterdam, this should be treated as an indication for implementing the same capital program at Rotterdam to increase its efficiency and throughput to achieve the same cost competitiveness

Wilkerson Company is in the business of manufacturing valves, pumps and flow controllers. Wilkerson is currently faced with declining profit margins relative to industry competitors. Severe industry wise price cuts in the pump business, which is Wilkerson’s major product line, has badly affected the company’s margins (Gross margin below 20% as against a planned gross margin of 35%). The firm has identified the need to investigate its costing mechanisms and determine their credibility comparable to those exercised elsewhere in the market. The need of the hour for

OM Explorer Up, Up, and Away is a producer of kites and wind socks. Relevant data on a bottleneck operation in the shop for the upcoming fiscal year are given in the following table;

The annual cost projections for Bernoulli with $18M for the year 12/31/2004 is the cost of good sold(COGS) multiply with the original cost of goods sold proportion, 60% and for the rest, afterwards the year of 12/31/2005 until 12/31/2009 is where values of

As a world wide major competitor in the chemical industry, Victoria Chemicals is a leading producer of polypropylene, a polymer that is used in a variety of products around the globe. Polypropylene is known for its strength and malleability and was priced as a commodity. The company operates two plants that produce polypropylene, one at Merseyside, England and the other at Rotterdam, Holland. Both plants were identical in scale, design, and age. However, Morris Greystock, the manager for the Merseyside plant saw a decline in the company’s stock, and decided to improve the position of the company. To do that, she came up with a project to increase production efficiency, rationalize the

The Polyethylene industry is driven by demand in innovation of new packaging, raising living standards and growing populations in emerging markets. The demand in end user markets for products that are produced for commercial use by Polyethylene. Polyethylene represented approximately 15% of Dow’s total sales and 35% of its operating profit. Dow was the worldwide leader in production accounting for 7% of the global capacity for the production of ethylene and polyethylene.