Professor P. Savor Intermediate Corporate Finance 3504 Section 002 Case Analysis#1 Alliance Concrete Alliance Concrete is a ready-mix concrete producer who has had tremendous success and revenue growth in its previous years of operation. Potential economic slowdown, overdue capital improvements, and debt repayment obligations pose serious threats to the financial health of this firm. Despite Alliance Concrete’s success and growth the economy in which Alliance Concrete operates may undergo an economic slowdown, which will decrease demand for its services and products. Alliance’s industry costs for materials are steadily increasing by 2.3% and are projected in 2006 to increase on average by 9%. In 2004, delays and stoppages to the firm’s production due to the collapse of equipment cost Alliance $2.6 million in repairs and a two-week shutdown.
Firstly, he emphasizes the economic suffering that GM (and the German population) had to endure during the few years after the 1929 stock market crash. He describes Germany as completely desolate, with unemployment staggeringly high. GM does do its part as a business to strengthen the German economy, and some, although not Turner directly, see GM as aiding the Nazis in their rise to power. He states in an earlier study that “The auto industry spearheaded the remarkable recovery of the German economy that boosted the popularity of the Nazi Regime by virtually eliminating within a few years the mass unemployment that had idled a quarter of the workforce and contributed so importantly to Hitler’s rise.” After GM suffered through those economically strife years, they eventually overcame the depression and went on to make an absurd amount of profits. However, the profits that they did make were locked into Germany, as Hitler would not release them for
Several years later, Kozlowski lobbied to the board members over a large acquisition that Fort felt was too risky. Having dollar signs in their eyes, the board sided with Kozlowski. Fort resigned as the CEO but remained on the board of directors for many years after. Kozlowski became the new CEO of Tyco, continuing their ongoing expansion and take-overs. He was rewarded by the board with an increased salary to 2.1 million and stock.
Though Mondavi was presented with the threat of industry consolidation among their main rival wineries, the company was initially persistent to remain independent, relying on the U.S. market for boosted sales. While their main competitors pursued other acquisitions, Mondavi focused on the growth of its popular premier brands. At the turn of the twenty-first century, the global wine industry reports that retail sales have ranged from $130 billion to $180 billion. There were three categories of wine that vineyards produced and sold: table, dessert (or fortified), and sparkling (champagne). Table wine possessed the largest share of the market.
There are several parallels that lead us to believe that history may be repeating itself. Today’s U.S. economy is producing 2.2% more goods output then before the economic recession started in the late 2000’s, but with 3.8% fewer workers. This can be attributed to our modern day recession stimulating huge productivity and efficiency gains as business let mediocre employees go to save on labor costs. They have learned to do more with less. Unemployment rates were steadily on the rise just a few months ago and corporate profits are at all time highs.
Although Coach has seen their profit margins and market share grow exponentially, there are a few issues that should be addressed in order to sustain profitability in the long term. 1) Reliance on U.S. Sales In 2007, 76% percent of Coach Inc.’s sales came from the United States. Louis Vuitton, one of Coach’s main competitors, has a better distribution of their revenues geographically with only 26% coming from the U.S. market, 37% from Europe and 30% from Asia. With most of company sales concentrated in the U.S., Coach will have to depend on the domestic economy to remain stable, as a downturn could lead to American consumers
The early 1920’s, also known as the “Roaring Twenties” was a time of peace and prosperity in America after World War I. Consequently, the average consumer had more money to spend and therefore invest. However, this era of economic optimism came to a screeching halt in 1929 on Black Tuesday, when the Stock Market crashed and fiscal chaos began in the United States. A nationwide panic ensued when stock prices plunged beyond the point of recovery and there was no one willing to buy the shares that investors were so desperate to sell. However, the Stock Market crash of 1929 was just the beginning of a deep economic depression. Since so many banks had invested their client’s money in the stock market, they were forced to close once the market crashed and the client’s money had vanished.
The board also needs to determine if this rapid sales growth in Ukraine actually translates into higher profits or dividends. Analysis When looking at the financial information provided by Oleg Pinchuk, Deutsche Brauerei seems to be in relatively good financial standings. Sales have been increasing modestly in Germany since 1997 and are projected to continue this trend into 2007. In 1998, the brewery began its expansion into Ukraine. In 2000, Ukrainian sales grew 47% and were project to grow 45% and 30% the following two years.
British Airways faced recession in 2009/2010 where business faced a decline. This was bad for British Airways as it caused majority of problems however the problems were faced appropriately by the business. Although there was a large revenue decline, the business ensured to make quick and permanent changes to reduce the cost base. Recession is measured as to when there is a negative economic growth three months, and then six months in a row makes it two negative quarters of negative economic growth. http://www.britishairways.com/cms/global/microsites/ba_reports0910/overview/cfo2.html [Accessed: 16th February 2014].
By 2009, L’Occitane had 1517 retail locations in more than 85 countries, of which 753 were self-owned. By 2015, it aimed to almost double its number of stores to 1,428, and needed €130 million for the same, €40 million for manufacturing facilities and €20 million for R&D. So to achieve its objectives, it needed to raise capital through IPOs like UC Rusal raised $21.5 billion in its IPO in 2010. Costs and disadvantages of doing IPO for L’Occitane: - Going public will lessen ownership share and thus, control of the owners. - L’Occitane will have to pay Underwriting fees for doing IPO. - It will have to incur legal, accounting, and marketing costs including costs associated with auditing, reporting and complying with exchange regulations.