Once we have calculated our D/E ratio we can then use the asset betas from comparable companies included in exhibit 5 to find the beta of equity for each line of business. Step three involves calculating the cost of capital for each line of business. Where the change takes place is the fact that we will be including the beta of equity of each line of business, which has factored in the outstanding debt the company has taken on. This new beta will alter the cost of capital for each business line. Lastly we will need to calculate the weighted average cost of capital for each division pertaining to its size relatively
* What is their portfolio? Targeted companies would have enterprise value of $200mn to$2bn Invested $50mn to $500mn of equity in a company and borrowed the rest Generalist equity investor and not separated by sector or region 40% in retail, 26% industrial sector, 25%business service * How do they choose investments? Berkshire adopted a conservative approach in choose investment. ; Consensus method of deal analysis (Mondaymorning Firm Meetings); Multiple MDs worked on the same deals to seize it; and Majority voting by the staff before acquiring accompany. * How does its culture help or hinder investment choices?
Customer Profitability and Customer Relationship Management at RBC Financial Group Case Assignment The first page of the case discusses Richard McLaughlin’s challenge to interpret the RBC customer profitability data and define an actionable strategy for managing the various market segments. Following are representative data for RBC Financial Group’s three major customer segments; Key, Growth, and Prime, described in the case. The first plot is customer lifetime value (CLTV) calculated over 5 years for different percentiles of customers. The second plot is customer value calculated just for the next one year for different percentiles of customers: This is the current customer profitability. The above calculations have been performed using the CLTV method described in the case.
3 – Evaluate the competitive strategy of Sainsbury over the last decade This question requires you to look at how Sainsbury’s have attempted to achieve a competitive advantage over their rivals. Firstly, you must identify what their strategy is and secondly, the question asks you to “evaluate” it. This means justifying, in relation to the theory, what is strong about its strategy and what is weak. This will also be related to the issue of sustainability. A classification of competitive strategies is provided Porter (1985).
Merck & Co., Inc. – Economic Business Analysis Lola Bryant Management/521 September 20, 2012 Dr. Gary Harris Merck & Co., Inc. – Economic Business Analysis The economic business analysis of Merck & Co., Inc. will review the strategic initiatives taken to be organizationally and operationally adaptive in changing markets. It will provide an overview of the economic downturns experienced in the past five years. Demonstrating the company’s adaptive strategies, the analysis will present examples of effective initiatives the company adopted during these periods. In addition the analysis will discuss future implementation strategies to manage the effects of current economic trends on the company. Merck & Co., Inc. is a publically traded pharmaceutical company.
Finally, a benchmarking analysis with a comparison to the same two companies mentioned above will be presented. Financial Statements Each statement gives the reader important information about the company, but the reader must also look at how the information flows from one statement to another through a ratio analysis. The Inernational Financial Reporting Standards and International Accounting Standards Board (2008) have proposed the use of the same section names and categories in each of the statements. Figure A shows details of their proposal, which is currently under consideration by the Financial Accounting Standard Board (FASB). This section will look at each statement and then an analysis between them using ratios.
Recruitment and Retention Case Study In order to keep up with company growth and meet staffing needs to effectively run the business, Doiturself Home Improvement Supply Store needs to see how the current compensation and benefits package is impacting our recruiting and retention. Currently the compensation and benefits package include base salary, 401k with a 5-year vesting cycle, two weeks vacation and insurance. The initial step I would take, is talk to the compensation team and determine what the going rate is for specific jobs are. This would be determined through salary surveys and doing some research of our competitors. I would then speak with HR Generalist and determine what kind of feedback they have received from others that have left the company as well as employees within the company.
The reports she used included Nike's Consolidated Income Statements for the years 1995-2001, its Consolidated Balance Sheets for the years 2000 and 2001, the current Capital market and Financial Information provided by Bloomberg Financial Services, and her manager Kimi's Discounted Cash Flow and Sensitivity Analysis report showing growth assumptions for the next 10 years. By the end of the day, she submitted her cost of capital estimate and a memo explaining her assumptions to Kimi. The following paragraphs discuss Joanna's report, giving an analysis of her assumptions and her choice of data and method in calculating an estimate of Nike's cost of capital. 1. Selection of Single Cost of Capital Considering that Nike has multiple business segments, it would seem appropriate to estimate costs of capital for each segment individually.
Paper 1 bus 375 Assignment 1: Creating a Methodology Due Week 2 and worth 100 points Read the Chapter Case titled “Creating a Methodology.” Upon reading the case study below (Creating a Methodology) Write a one to two (1-2) page paper in which you: 1. Discuss factors about the corporate culture that were at play and suggest central reasons why the executive staff waited as long as they had to consider the development of an enterprise Project management methodology (EPM). 2. Recommend to both the senior executives (i.e., the company) and John Compton (i.e., the president) whether the project management office (PMO) should report to the chief information officer (CIO) or to someone else. Justify the response.
Ratio Analysis enables managers to compare its performance and condition with the average performance of similar businesses in the same industry. This is done by comparing the ratios of the company with the average of other similar businesses for several years, concentrating on any unsuccessful changes that may be beginning. Ratio analysis may also provide the early warning factors that could resolve problems before they increase and completely destroy the business. (Harold, 2009) Ratio analysis detailed calculations are shown below: Rate of Return on Net Sales: Is Net Income ÷ Net Sales Rate of Return on Total Assets: Net Income + Interest Expense ÷ Average Total Assets Return on Stockholders Equity: Net Income – Preferred Dividends ÷ Average Common Stockholders’ Equity (Horngren, Harrison, 2008) Working Capital: Current Assets – Current