BUS 245-03 Assignment 1 Fall 2013 Finance/Business in the news Elizabeth Johnson Bailout of the Auto Industry-Toyota There have been so many incidents of large corporations needing bailouts within the auto industry and Toyota is just one of the many that have needed government assistance because of financial troubles. Some people may wonder if it was or is ethically right to do something like this because of all the controversy behind it like the CEO's and the higher ups misusing the money the government gave them to bailout and help their companies. The government can not predict that so in their own way it is justified to keep the economy up and running. With the economic troubles in the US still at a high, the auto industry has taken
SciTronics had $ 75,000 of owners’ equity and earned $ 14,000 after taxes in 2008. Its return on equity was 18.67% an improvement from the 8.2% earned in 2005. Activity Ratios: How well does the company employ its assets? 1. Total asset turnover for SciTronics in 2008 can be calculated by dividing $ 244,000 into $ 159,000.
Because of the failed IPO TRX’s president and CEO Trip Davis found strategic investors to raise $20 million in a note convertible into equity at $11 per share. Davis had hoped to reach certain synergies with these business partners but they just never worked out. The IPO was done in order to raise capital and to allow some of its investors a way out of the firm. It is currently difficult to gauge investor’s interest in technology IPOs. TRX’s road show produces some bad news for the IPO.
Taking into thought the long run of the company instead of the losses that the company would inquire in the short-term. By taking appropriate steps to continue the consumer’s trust in the company; first, correcting the items not properly working within the cars’ equipment; second, recalling the automobiles that had been already purchased by the public. Once the consumers would have noticed that the company is doing something to improve their past mistakes, those investments would have helped them with the future of the company as well as the growth of the Pinto model. At the time I believe that the investors of the company made a bad business decision by selling the remaining cars with their defects and everything at a
This was caused partly by the high self-confidence of the top management which was too ensured that the position of GM is everlasting. This assumption was proven as incorrect. The market position of General Motors before 2009 was dominant in many, but after 2000 GM’s vehicle production was stagnating globally. Together with the fact that the automotive market was stably growing it implies that General Motors was losing its positions on all important markets relatively to other automakers. In U.S., traditionally known as the core market, GM was selling less and less cars even since 2000 (The New York Times, 2009) and lost one third of its position, covering 28,1% share in 2000 and only 19,8% in 2009 (figures for cars and light trucks sales in U.S., Canis et al.
2) The sales budget calculates how much the company will spend to produce the required number of units. The president should do further consideration in terms of capital and labor costs. Does company have an adequate capital to produce the required number of units? And if the answer is no, they should look for other alternatives such as borrowing and others. 3) The sales budget is to estimate the profitability.
If the sales outlook for the coming three years was only 20,000,000 and B.E. continued producing at the rate of 30,000,000 units, a total of 10,000,000 units would be dumped into ending inventory at the end of each year once again reducing costs of goods sold and falsely increasing income. By the end of year 2013, B.E. Company would have 35,000,000 units sitting in ending inventory taking up space and costing money to store. Once again if the president’s bonus is based off of net income, this situation is the most favorable for a high paying bonus and encourages stockpiling inventory to inflate net income.
In the reconciliation of total reportable segments, the total corporate eliminations were $912 million. By looking at these numbers and policies of Verizon Communications Inc, the reader gets an inside look at how these intercompany transactions are vital for proper reporting. In Verizon’s case, if these were not done, there will be an increase in Income for 2013 of $912 million which is a significant
Geely’s acquisition of Volvo 1.0 Abstract Geely’s acquisition of Volvo Company is an enormous financial affair to China and the global. On March 28,2010, Zhejiang Geely Holding Group, China's No 10 automaker, sealed a deal to buy ailing Swedish luxury car brand Volvo from US giant Ford for $1.8 billion, including intellectual property. Some one think acquisition of Volvo will improve Geely’s competitive power, and some people believe that in the time of the economic crisis, acquisition of Volvo is high risky. The deal have arisen great interest around the globe as the two companies incorporate two different cultures and operate within different national backgrounds. This report aims to assess whether Geely can make two companies win-win.
LAMAR SWIMWEAR CASE Introduction Ed Lamar has come up with a proposal to offer his cousin Bob Adkins to buy a 15 percent interest in Lamar Swimwear. The company manufactures stylish bathing suits and sunscreen products. Mr. Lamar shows the increase in sale in the income statement from the last three years by pointed to the annual growth rate at 25 percent per year Lamar Swimwear (2013). Moreover, the annual growth in sales is double from the industry average which only 10 to 12 percent per year Lamar Swimwear (2013). He also implied that the stock in the corporation has become available because the financial problem of a current stockholder, who is in need have cash.