How can financial ratios extend your understanding of financial statements? What questions do the time series of ratios in case Exhibit 7 raise? What questions do the ratios on peer firms in case Exhibits 8 and 9 raise? Financial ratios show a company’s financial performance, strengths and problem areas. The time series ratios shows successive times, sales forecast, and I think that Krispy Kreme was a financially healthy company the last 5 years according to Exhibit 7.
Assignment #3: Foreign Market Entry and Diversification NAME Professor BUS 499, (5/13/2012) 1. Identify and discuss the trends in the global beer markets. In markets where beer consumption is often tied to disposable income, there has been significant growth in the global beer market that is comparable to the overall economic recovery in that region. “The international beer market staged something of a recovery in 2010 with global beer consumption increasing by 2.4%. This marks a dramatic improvement on the 0.5% growth seen in 2009, but is still well below the 5%+ growth rates seen earlier in the decade” ("Global Beer Trends Report 2011", 2011).
This was positive growth in North America and Coca-Cola seemed to have been on an upswing, being the fourth consecutive quarter of growth. More importantly, North America increased in volume and value when it came to nonalcoholic beverages (The Coca Cola Company, 2011). The results for North America were a testament to how well Coke’s new leadership and operation team were working. Placing focus on integration efforts reflected the greater plan, while executing strong marketing and sales capabilities to accelerate leadership position within North America delivered profit and substantial growth (The Coca-Cola's CEO Discusses Q1 2011 Results - Earnings Call Transcript , 2011). 2.
This indicator is increasing dramatically by almost 11 days in two years, because of increase of Collection and Inventory days by 16 and minor increase of Payables days by 5 (Exhibit 2 and 3). The change in Working Capital (Exhibit 4) very clearly presents the greater increase of receivables than payables, which means that the company pays faster than its customers pays to the company. Therefore, additional source of financing should be found. Further, it is worth mentioning that debt-to-equity ratio increased in this period from 0.82 to 2.65. As a result, it is very easy to understand that the main source of financing the operations of the company are loans and other type of debts (Exhibit 5 and 6).
There is an increase in the consistent growth in the sales though the increase is low in the fourth year this shows stability. There is a steady increase in the profitability ratios for example the gross profit margin thus one can draw the assumption that there is an increase in the profitability. The interest coverage is reducing steadily, the company from 2009 is paying its interest in less than 3years hence it’s a durable competitive
Operating income moved along the same path for the period albeit at a lower rate. The company’s invest ment in its self-insurance fund and interest income contributed significantly to the difference between operating income and net income. Revenue fell off by 12% in 2009 however; it increased by 22% in 2010. The company was able to increase it domestic and commercial rate after an application was made to the Fair Trading Commission. Fuel expenses grew at a faster rate than sales, fuel costs although seeing a fall off in 2009 by 20.52% rose by 29% in 2010.
These benefits are often referred to as arising from synergy which accrues to the shareholders of the target as well as to those of the bidder. VF Corporation is offered something in excess of what they perceive to be the current value of those shares. In spite of the eurozone financial crisis, VF’s revenues rose by 20 per cent in constant dollar terms in Europe, while sales in Asia surged 43 per cent. This is the right time to take the Timberland to the next level, with expected 2011 revenues of $1.6bn, over half of which are generated internationally. For the full-year 2010, Timberland reported revenue of $1.4bn, an increase of 11.2% over the prior year and up 11.7% on a constant dollar basis.
The increase was 17.25%. This is quite high gearing and has gone higher in last year. The total debt for 2007/8 rose about 39% which increased the gearing. Company’s huge capital expenditure is a reason for this. 3.
China sustained an average annual rate of growth in real GDP of 10.1% between 2003 and 2009. Investment and international trade have been the source of China’s industrialisation and consequently its rapid growth. This economic growth has lead to economic development with its citizens enjoying rising per capita incomes, growing by an average of 8.2% per annum between 1975 and 2005, and improvements in quality of life, rising from a HDI of 0.530 in 1975 to 0.777 in 2005. The World Bank estimates that over the last 25 year poverty
The average daily number of vehicles on motorways has increased by 47 000 since 1971. This shows that more people can afford motor vehicles and in that sense, their living standards have improved. Also, in 2006, more people could afford housing goods such as washing machines, telephones and televisions than in 1971. When thinking of living standards, sometimes some statistics that affect the society in certain ways are forgotten or not considered enough. For example the number of abortions in U.K. has almost quadrupled from 63 400 abortions per year, to 199 019 abortions per year.