Case Study Analysis Desert Palms Hotel and Casino has a great potential in growing and expanding. Having Robert Hoffman as its general manager gives the company edge over other competitors due to his management abilities and skills that he gained through years of hard work. The plan of establishing a water park can increase revenues but it can also create cost in terms of investment. Capital and cost should be taken into consideration when making decisions because these two factors can affect the overall profit of the company in the long run. The lure of gambling to young people should also be taken into consideration since the water park will most likely cater families with children (Pearce and Robinson 2008).
The company is currently experiencing losses and this is causing shareholders and suppliers to become wary of D’Leon. This report presents a financial ratio analysis of the firm to determine the impact of the expansion and provides the company recommendations as to how to proceed. D’Leon needs to increase its current ratio at 1.2 and quick ratio at 0.4 to at least the current industry average. This can be done by holding less inventory. This would also help improve the company’s inventory turnover ratio from 4.7 to the industry average of 6.1.
The final project is convenient for the entire family and is good for entertaining and relaxing. The inground pool project will greatly increase the value of the Tibbs family home. The Tibbs family will receive a loan from the credit union. The credit union will be a stakeholder in the project because the credit union is responsible for financing the project and is at risk of a loss if the project does not go as projected. Project Goals: Triple Constraints Triple
• Due to the economic crises and to the changes of people behaviours the resort starting to be confronted with loss in financial performance, but even when it was a good time for the diving industry they had rich a profit only in a range of 2%. • The company should reassess the strategy and to take immediately action in order to became a successful business and to generate a good return of investment (10%). • The management should choose if the strategy will be focused on a business more family-oriented or adventure oriented, or if they can combine both. Options: 1. Selling Coral Divers Resort The most significant reason to sell the business is the declining revenues.
b. Invest in projects that increase shareholder value: Marriott can increase shareholder value by making wise investment decisions and generating healthy returns on invested capital i.e. by investing in projects with positive net present value (NPV). Such projects will increase its sales as well as its cash flows and consequently result in increasing the EPS. c. Optimize the use of debt in the capital structure: Relying heavily on equity would increase the cost to investors whereas relying too much on debt would put the business in a precarious position.
The larger expenses coming along with high quality and services render salespeople a disadvantage when talking to their clients for business. The standards of performance (SOP) set for extra compensation seem unrealistic, with 75% of salespeople earning no commission in the first half of 1992, and so conceivably, fail to motivate them. This makes the result control less effective as they failed to evoke the desired behaviors – achieving sales targets. Together with other offers by competitors, this resulted in high turnover rate. Profit Sharing - Result controls may serve well with congruence between employees’ and company’s objectives, but employees take for granted the law-required 10% profit sharing of the company’s income and so their motivational effect seems little.
• Would need to reduce working capital by $260M • Would need to increase gross margins by 328bps • If growth is so important, then a price raise would likely slow that. The DPO change needed to self-finance is likely too aggressive. I would try to get half through DPO improvements and the other half through debt. This roughly doubles their debt. (But
This is unlikely to be the case in the UK at the moment as low interest rates and a large budget deficit has not cause significant inflation. A further conflict with loose demand side policies might the effect on the current account. With higher economic growth and consumption, we might expect an increase in the demand for imports and a worsening of the current account. This is likely to be a fairly significant effect for the UK because it has a high marginal propensity to import – especially for manufactured goods. Furthermore, if there is inflation from the demand side policies then there will be a fall in UK competitiveness and a
Buyers of Fiji are buying much more than just water. Consumers are buying what they believe to be the highest quality water, filtered naturally and containing key minerals. This water is hyped to be better for the consumer and to have a better taste than competing waters. Fiji markets health benefits to the drinker along with the imagery of an instant tropical vacations to the Fiji Islands. By partnering with many prominent resorts and restaurants, Fiji strives to isolate the brand from other more ordinary waters.
With these factors taken into consideration, a decrease in consumer expenditure would be a direct causation to a lowering of both organisations activity. For example, due to recession unemployment will rise as the companies can’t afford to pay employees, and therefor people as a whole have less money to spend, and so donating to causes such as Oxfam would come more unlikely as there will be less money revolving them. This could cause a cut on their government funding as more money will need to be invested to government funding for those out of employment. With a low flow of money inward to the company it means they wont afford the expenditure necessary to fund projects for helping those, therefore lowering the activity of the charity. The same rule may apply to Arsenal FC.