Further it increased both sales and net income by 54% and 28% vs. 1993, but the company has a problem of a liquidity and a shortage of cash. One of the biggest indicators of this problem is almost double decrease in quick ratio in 2 years (Exhibit 1). This means that the company has a decrement of current assets (not considering inventory) comparing to current liabilities by 0.66. Another factor which helps us understand the reason for shortage is Cash Cycle, which consists of Average Collection days and Average Inventory days subtracted by Average Payment days. 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).
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
Net income for Jan 2000 --$5956 Feb 2004--$57,087 Then discontinued Montana Mills resulting in a loss But was able to come back in Aug 2004 $5764 The balance sheets show current ratio (current assets to dollars in liabilities) Krispy Kreme had more cash assets available 2004 compared to 2000. This is why the company was able to recover from the loss of Montana Mills. The steady growth and quick recovery shows the Krispy Kreme is a financially healthy company. 2. How can financial ratios extend your understanding of financial statements?
Main factors that contributed to this trend are the increased smoking bans and consumers’ perception of moist smokeless tobacco as less risky than cigarettes for health. In 1997-1998 UST was one of the most profitable US companies with a five-year return on capital of 92.1% that was about 20% higher than the 2nd ranked firm. Financial figures for the 11-year period from 1988 to 1998 show a continuous increase in sales, earnings and cash flow with CAGR of 9%, 11% and 12% respectively (HBR 2001). To have a deeper insight in UST business risks and assessment, SWOT analysis (McGee et al. 2010) is provided below.
surecut 1.Describe SureCut Shears in terms of its market, competitive and operating characteristics? How risky is SureCut in operating and competitive terms? SureCut Shears, Inc., which manufactures a complete line of household scissors and industrial shears, had made profits in every year since 1958 – sales and profits grew steadily over the years. While it has met competition from overseas companies, whose products were cheaper due to, among other things, possibly lower labor costs abroad, has been able to generate annual profits and issue dividends because possibly of its brand name or existing sales channels. On competitive terms, SureCut is not risky at all – it has been on the market for more than three decades, and based on its historical results, it is expected to continue its financial growth, notwithstanding competition from companies providing for cheaper scissors and shears.
iii)There is very little increase in SG&A as not much was spend in terms of sales effort. iv)AR increased significantly with some of the promissory notes are payable in June 1994 (6 months after sale) v)Probably increase marketing, promotional and expenses related to discounts in the subsequent year due to “Premier Vision” plan. This impact is significant. From the statements, B&L reported a 13% YoY increase in sales revenue. However, exhibit 6 showed that there was a decline in market demand for conventional lenses, but an increase in both planned replacement and disposal lenses.
The current ratio was 3.6 on February 29, 1988which mean that it has plenty of cash to cover any of its current liabilities. Moreover, Interco’s capitalized leases were 19.3%. The company was financially “overcapitalized”. When looking at the company collectively, Interco also looks healthy, with sales increasing 4.04% in 1987 and 13.4% in 1988.Growth in earnings moved Interco further toward its goal of a 14-15% return on equity: 1988’s ROE of 11.7% was up from 9.7% in fiscal 1987. However, if closer examination is undertaken, it is clear to see that the general retail and apparel businesses are struggling while footwear and furniture have been flourishing.
1. Does the Audi division of Volkswagen appear to be achieving economies of scale, constant economies of scale, or diseconomies of scale? At first glance it would appear that Audi is experiencing diseconomies of scale. As diseconomies of scale occurs when a company experiences an increase in marginal cost when output is increased. Audi's global sales rose 8.3% to 1.58 million vehicles in 2013 however despite the increase in revenue, the net profit fell 7.7% ($5.57billion) and the operating profit margin fell to 10.1% from 11% the previous year.
Coke Zero continued double-digit volume growth in North America for the 20th consecutive quarter. Sprite grew 3%, while Fanta was up 5% this past quarter. Reiterating that using the right strategies and course of actions to sustainably drive long-term growth across our entire North America was in effect and reflective in the portfolio. 3. Discuss the Earnings per Share results for the quarter in comparison to historic results and long-term growth targets.
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