Harold Holmes, the new banker in charge of the Reed account requests to see company books and after examining what Reed presented, decided to deny the increase in the Reed credit line. Additionally, Reed owes the bank in excess of $100,000 which Holmes has requested payment within 30 days. Holmes suggested changes Reed could make to make his business profitable again and be able to stay on top of debt. These changes included hiring a consultant to overlook the financial and inventory aspects of the business, and reducing inventory and account receivables to the industry average. Upon reviewing the balancer sheet, Holmes suggested accounts receivable being considerably reduced, since this was an area which was controllable.
* Based on the analysis of the tables and data purchased from Manson and Associates, we recommend that Larry not open a Coors distributorship in South Delaware. Rationale Table A “The National and Delaware Resident Consumption Per Capita” shows how much beer in gallons was consumed by Delaware residents from 1998 to 2002. Table B shows the population for the two counties in Larry’s territory and is required to analyze the data in table A. The information from both tables A and B is crucial in determining the size of the potential market for Coors within the two counties. Table C contains data which shows the expected Coors market share over the next few years.
As an initial step of the mitigating the financial exposures, the management defined the corporate philosophy and objectives. Among the planned objectives were, reducing purchasing costs by 20%, displacing 20,000 –odd workers via layoffs and attrition, closing five plants and reduce capacity by 30 percent. After identifying the exposures, the management were expected to quantify the level of effect to the company’s operations. Among the categories of exposures in the company were, translational, transactional and operating exposure. However, the financial stagnation was an operational exposure which was economic in nature and arose from foreign competition.
Add $31.50/50 gal/bbl = $0.63 to $0.52 cost to get bulk whiskey inventory of (8,665,585.62 * $1.15) = $9,965,192.31. Next, you must add the value of Bottled and Cased Whiskey by the costs of aging barrels. For this account, there are only 35 gallons/bbl (due to evaporation), so the cost increase would be $31.5 / 35 = $0.90. Applying this increase gives $1,969,000 / (11.20 + 0.90) = $2,127,223.21. Total change in whiskey inventories would be 9,965,192.31 – 4,506,000 = $5,459,192.31 for bulk whiskey and $158,223.21 for a grand total increase in inventories of $5,617,415.52.
9/18/13 Alliance Concrete Executive Summary: Based on available financial data and forecasts, Alliance Concrete should pay the $3million dividend to National as well as invest the full $16million in new fixed assets to assure that there are not shutdowns, as there were in 2004. By paying the dividend and purchasing new equipment Alliance will need to renegotiate with its bank in order to delay any scheduled debt retirement and instead acquire additional debt financing. Doing so will ensure that Alliance maximizes its Return on Equity as well as continue its trend of increasing earnings, which is especially important considering the slowdown in the real estate market. 1. A reduction in the dividend would decrease the need for long-term debt in multiple ways.
This is because the increase in the collections of Accounts Receivable from customers is not sufficient to recover the total disbursements (variable production cost and the fixed cost). The disbursements are more than the accounts receivable from April onwards. This leads to a negative cash balance in April. This is the reason why the Medieval Company needed money in April. If the company had prepared a Profit Plan which included the cash budget at the beginning of the year itself, then the fact that money will run out by April could have been foreseen.
TEXAS A&M UNIVERSITY CORPUS CHRISTI MARKETING 5320 CASE NO. 10 GOODYEAR TIRE AND RUBBER PRESENTED BY STUDENT CORPUS CHRISTI, TEXAS. Definition of the problem Goodyear the worldwide renowned brad for tires has been considering a new strategy or proposal to enhance profit margins and market share since the timeline between 1987 and 1991 represented a market share loss of 3.2 percent. Mainly as consequence of not being available on mass merchandisers like Sears losing approximately 2 million tires units sold in the replacement market, the strongest in the tire and rubber industry. Now, the main concern rests upon the decision of open this new market channel that actually was once active in 1920 but since then Goodyear has worked all the way independently.
An Apple share of stock is merely a claim on a portion of their future cash flow. Shareholders expect that Apple either profitably invest the cash they acquire or return it to the shareholders via dividends or by buying back shares. Apple CEO Tim Cook and his board of directors in November 2011 shelled out around $400 million worth of restricted stock units to their top talent [3]. When employees exercise stock grants or options, shareholders suffer dilution, as these
Historically, December sales represented only 3% of yearly sales, but this year they mushroomed to over 25% of yearly sales. CCL would like to defer the profit on what they consider to be "excess" sales generated as the result of the looming price increase. CCL believes that 2001 sales will be lower because of the bottlers' overstocking to beat the January price increase. Management of CCL is convinced that bottlers are overstocking due to the frank and open discussions that they have had with the bottlers. If deferring this revenue will not be acceptable to the company's auditors, management would prefer to treat these "excess" sales as consignment sales, with the recognition of revenue taking place in 2001 or when the bottler eventually sells this product.
Previously, there was a singular focus on earnings per share. Védrine believed that EVA was a comprehensive performance measure that would remove focus from earnings per share to thinking more long term, and introduces it to the company in 1999. CFO Sanders and Controller Myers also see it as a solution to conflicting management priorities caused by competing financial measures such as cash flow (for valuing acquisitions) and return on sales (for paying bonuses). The EVA program consists of three elements: EVA centers (business units), EVA drivers (operational practices that improve EVA results), and an EVA-based incentive program for bonus-eligible managers. Over the next two years, the implementation of the program runs into several stumbling blocks, including resistance from regional managers, who push for "line of sight" EVA drivers; the difficulty of managing a large number of EVA centers; and unexpected bonus adjustments due to poor EVA performance.