Today, and for the past few decades, Wal-Mart and Proctor and Gamble (P&G) have had a successful and healthy relationship. However, value pricing as it is today, had not yet taken into effect until the early 1990s that which Wal-Mart and P&G achieved together. Following a sharp drop in earning in 1985, P&G executives made an effort to reinvigorate their company and increase sales. In 1987, through relations with Wal-Mart, the company gained a preferred supplier by reducing stock-outs and inventory levels. This was a strategic in cost reduction and increased profit, in response to recession driven growth of private label brands (Figure 1).
Even though the acid-test ratio is less than 1 which rates in the lower third quartile in the industry of 1.6, 0.9 to 0.6, it indicates a concern with repaying current liabilities. This could be due to quick expansion of inventory with the intention of increasing sales. While this is currently considered a weakness and is concerning, a rise in the ratio should be seen by 2013 due to the increase of suggested sales. 3. I calculated an “inventory turnover ratio” which measures the number of times a company sells its inventory during a year.
While this is a bit aggressive, we feel that as expansion wanes same store sales will increase marginally from the projected 3.5% growth primarily due to the strength of the brand. As the new store openings will begin to wind down, 2006’s projected ROIC of 25% is expected to decline steadily until reaching approximately 16% by 2011. We also assumed that the WACC would be stable at 10% since we did not foresee any material changes in the capital structure. We also believe the explicit period should be longer than 5 years, but due to the lack of concrete information, we decided not to forecast past 5 years. This assumption has most likely reduced our estimated valuation by neglecting some years with potential growth rates of more than 5%.
The percentage of watches being rejected during certification by the SOCC has increased dramatically year over year. In 2003 it has reached 67%. This does not bode well with the positive consumer sentiment towards reliable and certified chronometers that consumers appreciate to the point that they are willing to pay more for them. In order to improve the quality of the mechanical watches and tremendously decrease the percentage of rejected units by the SOCC and push more certified watches into the market, Aquine should make an investment by upgrading timing machine which would enhance the precision of the watches. Additionally the company should buy customized movement holders and upgrade the poising machine.
It is a growth company but not consistently. First, from Exhibit 4 we can see that analysts highly recommend buying at the beginning, but the percentage decrease sharply from 2004. Second, from Exhibit 5 we can see that the EPS increasing constantly from $ 0.38 to $ 1.00, but after that it start decreasing. Last, from the Exhibit 6, from Apr-01 to Aug-03, when the S&P 500 composite index decreasing the stock price of Krispy Kreme increasing as a whole. It grew faster than the overall market.
That time, the company lost revenue around $2,144,000 per year. In December 2009, the company began to charge fee after sales, 1.5% of sale price and no higher than $5. After 3 months, the company could recover from loss and get the profit. Although eBay’s new CEO encourages entrepreneurship, we suggest eBay continue joint venture instead of acquisition in Taiwan because of two reasons. First, the e-commerce market in Taiwan is mature with many competitors.
PPG anticipated its full-year share repurchases to be at the high end of what they had originally projected. They also reported earnings per share from continuing operations to be $1.52, which included previously announced charges from restricting and nonrecurring costs. (About PPG, 2013) The health of the economy is critical for the company because its products are not primary products; so during a recession, people will choose to purchase items of more importance than maintenance products. This explains the big decline in revenues for 2012; this equates to a 14% drop compared to the previous year. Also, it can be seen the earnings per share were down by 12% and the return on average capital was down by 10%.
Of all the competitors, acquiring Red Dragon seems to be the most likely investment. Finally, it should also be mentioned Private Labeled Soups, that have been increasing their sales by 5% over the past several years as retailers decrease Brannigans’ shelf space by 3% yearly in order to provide extra space for their own private labeled products. Company: Brannigan is a food centennial company. Although being a cash cow, representing 40% of total sales, its soups division experienced a decrease in profits, sales and market share which need to be reversed through a new marketing strategy. Even though the division has several other products such as Dry Soups, Healthier
The weaker economy resulted in sponsorship cutbacks for professional riders. The company expects the market will improve moderately in the upcoming year and has indicated it will not take any pricing actions to increase sales. However, the 3.2% increase forecasted for units sold and revenue in year 9 over year 8 is a concern since the company is not planning on any specific actions to spur sales or product awareness in the weakened economy. The next concern is the amount of components and frame materials budgeted in the raw materials budget. Each bicycle requires 42
Western Governors University JET 2 Task #2 May 11, 2014 A1: Budget Planning Areas of Concern Sales Budget: 1. Competition Bikes, Inc., has budgeted a conservative increase in sales in units. In 2008, they sold 3,400 units and in 2009 they are budgeted for 3,510 units to be sold, a modest 3% increase. In addition, they have kept their price per unit the same at $1,495, with overall expenses increasing 5%. This is a concern, if it is costing more to manufacture the bikes, then the price of the bike should increase and the company should also consider a more aggressive “sales in units” budget.