negative 2500 $.The company needs to raise about 40,000 $ as the ending cash balance for the month of July is negative 40,000 $. The Company can get a short term loan for 40,000 $ which can be repaid in October. 2. Even though the Company started with a Capital of 250,000 $ it still ends up with a zero bank balance. 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).
After discussing the pricing problem, Magers want to keep the 100 series price for $2.45, which is right. Even though the sales volume would increase to 1,000,000 from 750,000 by reducing the selling price from $2.45 to $2.25 per 100 pieces, the company would not make profit. Since the cost per 100 pieces for 100 series is $2.29, which bigger than $2.25. If the company sold at $2.25, the company lost money. Also, in the short run,
Average turnaround time (TAT) has grown from about three days in 1989 to more than five days in 1991 while its main competitor, Golden Gate, has achieved two-day TATs and is now promising one day. As a percent of revenues, branch profits in 1989 were 20.2%; in 1991, the branch suffered a 1.7% loss (Exhibit 1). Analysis There are five fundamental problems with the current process: 1. The relative value of new policies and renewals is not clear to the underwriting teams. While new policies are important for Fruitvale’s long-run viability, they are more risky (Exhibit 1) and require more labor to process (Exhibit 2a).
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.
Increase the sales. -Cons: People choose store first then brand. 75% of audiences is not buying paint. Will double the expense with no benefit. (3) Price reduction of 20% -Pros: competitive the price with other company.
4) Good luck! Part I (45 points): Short questions. Either fill in the blanks or mark something as True or False (no need to show calculations here). (1) The two main reasons why acquiring firms’ shareholders do not benefit much from acquisitions are that the acquirer: (2 points) The synergy benefit is over estimated during acquisition process Underestimate importance of “culture compatibility” (2) Suppose during a particular year a firm has a NOPAT of $400, increase in Net Fixed Assets of $50, increase in cash balances during the year of $20, and an increase in noncash net working capital of $45. What is this firm’s free cash flow for the year?
Dollar General in owned by Koldberg Kravis Roberts & Co. L.P (KKR) who own more than 79% of all shares in Dollar General. Some argue that part of the reason Dollar General has been so successful as of late is attributed to the economic crisis the United States experience during the second half of the 2000s. Economist believe that consumers will not shop at the Dollar General as much as the economy improves. In an effort to retain their existing customers and recruit new ones as the economy strengthens, Dollar General has begun to stock name brand items. Some analysts also believe that even when the economy improves, your average consumer will still look for ways to save money and continue to frequent the dollar discount stores.
The company knew that these customers’ usage was inconsistent and that they did not like the confusion current rates created. Customers wanted clear, flexible plans. They were unable to predict their own usage so they usually ended up paying more than they wanted to. Peak hour’s rates, extra minutes and one-time costs increased monthly bills unexpectedly. Pre paid plans were unusual because of prohibitive pricing (starting at 35 and as high as 75 cents) In 2001 mobile entertainment represented $10 billion and was projected to increase steadily over the next few years.
The retailing recession was what the company believed caused this decline in sales. A company’s ability to pay off a short-term loan relies heavily on the company’s sales and profit. If these are declining then there is no way the company would be able to pay off the loan at the original forecasted time. Along with the downturn in sales SureCut Shears did not accurately forecast its financial needs. The company’s proforma statements did not take into account any external factors such as a retail recession taking place.
Let’s first look at the repercussions of FPL maintaining their 47 year streak, increasing the dividend as usual. This is the most unlikely scenario given that FPL’s current payout ratio is 1.07 while the industry average is 0.8. By tying up its cash flows in dividend payouts, FPL is currently unprepared to face the increased competition that is sure to come from industry deregulation. This would not bode well for future profitability and value to investors. Recommendation Kate Stark should change her previous “hold” recommendation to “sell”.