In fiscal year 2008, the return on invested capital of continuing operations was 9.5% compared to fiscal year 2007’s 13.9%. The decrease reflects the decrease in operating profit that also impacts the rationalization charges. If the rationalization charges are excluded the return on invested capital for continuing operations would have been 11.4% (Phillips, Libby, Libby, 2011). The cash flow statement shows the movement of cash within a company. The cash flow statement is split into three categories: operating activities, investing activities, and financing activities.
I calculated an “inventory turnover ratio” which measures the number of times a company sells its inventory during a year. A high rate of turnover indicates easiness in selling inventory; a low rate indicates difficulty. In 2011, the inventory turnover was 6.1. By 2012 the ratio decreased to 5.2. The decrease may be due to a slow ability to turn around merchandise in sales and potentially due to paying a higher cost for goods.
This is not an improvement given the fact that the DCOH decreased by one full day. This would not be good information for the management or financial teams as the cash flow is decreasing by one day. In addition the quick ratio dropped a few points showing that the organization is becoming less able to pay for the debt it is incurring. Relationship between Revenue Sources and Expenses The revenue sources relationship with the expenses go hand in hand. The net patient revenue increase discussed in the report by the chief financial officer showed with the
Productive efficiency is absent in the monopolistic competition. This exists because the price the company would have to set is above the average cost of that product, product efficiency is not achieved (The McGraw-Hill Companies, Inc.,
However, the company was not able to sustain the growth in sales between years 7 and 8, which resulted in a decrease in net sales of -15% or $897,000. The company’s loss in net sales in year 8 is a weakness due to overall sales being down. Cost of goods sold (COGS) between years 6 and 7 show an increase of 31.8% or $1,048M. The increase in COGS corresponds closely with the increase in net sales for the same time period, which illustrates the company’s ability to effectively control its inventory levels and material costs. For years 7 and 8, the cost of goods sold decreased by -14.5% or $630,400, which again corresponds to the change in net sales for the same period.
* Wages, advertising and rent total %23.1 of sales in the average business, leaving %1.9 of sales for property taxes, interest, utilities, depreciation and other expenses. While Rhodes saves 7.8% in rent due to his ownership of his property, these expenses total 9.8% of sales compared with the %1.9 industry average. Even if half the property tax can be expunged through sale of the unused lot, these expenses would still be %8.8 of sales. * Even with the relatively high expenses, Rhodes seems to be harmed most by his lackadaisical inventory management. His 2008 gross profit is 3.67% lower than the industry average (or 1.1% of sales).
Another financial strength is their low management and general expenses which are only 5.5% of their total expenses and 5.4% of their total revenue. This is much lower than those of the opera which are 14% of total expenses and 12% of total revenue. Yet another financial strength is their endowment fund, which was $10 million in January of 2002. Additionally, the symphony only draws 5% from its endowment fund to cover expenses. A financial weakness of the Utah Symphony is its performance and contribution revenues.
Mantkelow (2014) explains lean manufacturing as based on "finding inefficiencies and removing wasteful steps that don't add value to the end product." Lean operations helps to reduce waste in production by using resources to only produce what the customer is demanding. A company that is using lean operations has measurable throughput. “Every minute that a product is not sold the cost accumulates and the competitive advantage is lost, this is the manufacturing cycle time” (Heizer and Render, 2010) this analysis could have been used to scale down production in the third and fourth quarter when it became obvious there was excess inventory. For starters, there is no value in holding 60 days' worth of inventory, to adopting lean principles would immediately help us to commit to inventory reduction and better alignment between production and demand.
The adjustments for 2010, 3rd quarter earnings will reduce to $98 million, down from $101.5 million, and 4th quarter will be reduced to $43 million from $114.2 million (Savitz, 2011). AMSC also stated that cash and equivalents were at $240 million quarter end, down from $260.5 million on quarter earlier (Savitz, 2011). Sinovel has no intentions of paying AMSC. This is AMSC biggest client because this client contributes to 80% of its revenues. Not good news for investors or anyone with interest in
In the U.S. Bureau of Labor Statistics, from February 2008 to November 2009 the unemployment rate went from a low 4.9% to a high 9.9%. As of November 2012, the unemployment rate went down to 7.7%, which are about 12.2 million individuals. The unemployment rate is still high compared to previous years even with the 2.2% decrease in unemployment. Many Americans have become unemployed during the past few years. When people are unemployed it means that they have less money which in returns means that there is a less of a demand in the economy.