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Assessing the long-term financial health of a company is an important task for management in its formulation of goals and strategies and for outsiders as they consider the extension of credit, long-

1. In the last five years the growth in sales for the company has been around 10% per annum, except for the 1997, the growth was 18.78%. In the case, nothing is mentioned that company has made any drastic changes in its strategy to grow faster. In such a scenario, projected a consistent growth of 20% per annum for the next 5 years is too optimistic.

A. Stability: the firm should focus on incremental improvement of functional performance. The firm can also increase efficiency and reduce costs in order to counter the current economic slump they are in.

A. Factors that Drive Profitability (as defined in the Interim Report) and an analysis of how they apply to Safeway and their industry leadership:

A company must express all of these points in order to succeed in the long run. If they do not they have a higher risk

The remainder of this note discusses each of the steps in the process and then provides an exercise on the various financial measures that are useful as part of the analysis. The final section of the note demonstrates the relationship between a firm’s strategy and operating characteristics; and its financial characteristics.

Constantly growing firm with increasing revenue (15.5% in 2005), net profit, total assets and high returns on equity (5.1% in 2005)

1. What was Chem-Med 's rate of sales growth in 2003? What is it forecasted to be in 2004, 2005, and 2006?

Adaptation is essential to survival. Humans as a species share this primal knowledge of Social Darwinism and have applied it fittingly to our societal interactions and business endeavors. People, as well as companies are subject to its whims and as such must either adapt or fail. However, a company cannot know its standing or how to better its chances of survival in a cutthroat, profit-oriented business world without a thorough understanding of its own abilities and evolutionary advantages (or lack thereof). Therefore, it is necessary to periodically analyze the financial strengths and weaknesses of a company in order to ensure that it is doing

In this specific Case, that has asked the Sale growth for the four-year period, can be calculated ‎as bellow;‎

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.

3. Shareholders expectation: After 10 years of poor performance, shareholder must be putting pressure on management for profitability.

d) Do a brief analysis of your competitors, the prospects of their future cash flows, and

3. Suitability of segment: Is there enough spending power within the segment for the company to sustain itself.?

Some of the gathered data such as the firm’s historical financial statements are adjusted so as to prepare the inputs required for the firm’s valuation methods and hence it leads us to the second step. The main financial statements required for the firm’s valuation are the income statement and the balance sheet that are produced by the accounting process. This further shows the relationship between firm valuation and accounting. The best way to value a firm with a historical approach would be looking at the historical statements, income statement and balance sheet. Smaller firms should be looked at the last three to five years while larger firms should have a longer period to check. Due to the fact that, business owners have considerable discretion in how they use the firm’s assets and also what expenses and income they recognize, this rise the need to adjust the firm’s historical records. Constructing an accurate relationship between the required firm’s assets and