Our company reported a net loss of $30,000 due mainly to operating expenses and product costs that exceeded our projections. We are currently working on several initiatives that we believe will significantly reduce our costs relative to our sales. Despite negative net income which reflected a negative free cash flow, our company was able to generate $420,000 through investing activities from supporters such as you. This allowed us to make necessary purchases of essential equipment and fixtures that will be used to create a production line that will allow us the needed production capacity to support our anticipated increased sales. Corporate Actions We have successfully completed the initial set-up of our company and can now focus on achieving profitable operations and sustainable growth.
Notwithstanding increasing dividends and a moderately stable share price, the home improvement retail industry remains to struggle due to the fragmentary world wide economic complications. Throughout 2009 Home Depot recorded expenses as much higher as well as the drop in sales. While Home Depot the company is very strong, the drop in sales and net earnings brought fourth some restraints until the economy shows signs of improvement. With this in mind The Home Depot, Inc. initiated strategies in the fiscal year 2008, to help minimize losses while maintaining a strong customer base. Which in turn may have the company to increase their credit programs for consumers with the intention to increase sales.
They gave a good estimate of how my decisions would affect business performance for the upcoming quarter. I was able to look at the pro-forma statements and make adjustments in my decisions before moving into the next quarter. For example, in quarter 2, I had decided to not add another sales site due to not having enough cash on hand. After looking over the pro-forma statements, I realized that I would have enough money to add another location for the next quarter and still have more than $300,000 cash left over at the end of the quarter. Operating efficiency was improved using just-in-time and lean operations techniques.
Also, your company was asked for donations of day old products by the food bank. Your management declined and chose to throw the products away. Management worries over lost revenue due to fraud and stealing by employees who might say they were donating food. In doing my evaluation of the given facts, I see areas in your company that could be improved in regards to the attitude toward social responsibility. Economic: maximizing stockholders wealth and value In regards to evaluating your company on their attitude toward economic social responsibility, I have found that your company has made some good moves, although there could be some improvements made in this area.
This reduces the carrying costs of the inventory that is ordered as well as insuring that unused items are not held from month to month. A third way to increase working capital is to realign the billing and payment schedules for the company. Currently products are invoiced to customers at the end of the month with terms of net30. Suppliers invoice the company at the end of the month with terms of net15. This disparity of terms can impact working capital as money flows out in the middle of the month but does not flow in until the end of the month.
The fact the company is throwing food out instead of donating it makes the company appear heartless in the eyes of the public. Although company Q has logical financial reasons for disposing of the food, the public does not see this. The public’s perception is that company Q only cares about profit and not the people of the community. Company Q Needs to seek methods to remedy the public perception that it does not care about the community. One solution could be that company Q can set up a program to closely monitor the surplus of inventory in order to make donations to local food banks.
(REFERENCE TOOL ONLY) Assessed Discussion Question Concentration Consideration October 12, 2008 As I review Kudler Fine Foods and the areas of business covered this week and last week, the concentration of Finance seems more and more appealing because it helps to predict and analyze short-term and long-term money flows to and from the business. Optimization creates profit and helps the business overall to make good use of that money that is acquired. Control and acquisition both interest me because as a business manager it is important to be top of the game and realize what comes and out of the business. The financial planning analysis is interesting to consider which consists of three steps:
So, after business is operating, you will need to compare your actual performance (from your current financial statements) against your planned performance (from your pro forma financial statements). This financial statement analysis should be performed line item by line item. If lemonade stand had fewer sales than planned … I should know or find out why. If any costs were greater than planned again, I should know or find out why. Ever dollar received, and every dollar spent shows up on financial statements, and every dollar that is different than what you planned should be analyzed.
HILL COUNTRY SNACK FOODS CO. March 30 2013 This report analyses and estimates the effects of a recommended leveraged of 20%, 40%, and 60% debt-to-capital recapitalization for Hill Country Snack Foods Co. Fundamental conclusions include: • Relevant theories infer that by incorporating debt to a firm’s capital structure, significant tax savings can be made, but financial distress and signaling factors need to be considered. • Hill Country’s Weighted Average Cost in Capital is estimated to decrease after recapitalization. • It revealed that 20% debt-to-capital result is the optimal (lowest) WACC and maximizes the company’s value. • Significant debt issue is a concern as it is risky and in conflict with the company’s culture and managerial of low-risk attitude.
Per the data food service manager salaries are down by 8.9% from last year this time therefore to open a new pizza operation would be a good capitalize managerial decision at this time other cost factors remain the same. 3. Test the statistical significance of the variables and the regression equation indicating how it will impact your decision to open the pizza business. Per the data collected the independent variables price and wages are statistical significant of the dependent variable sales.