This is not an improvement given the fact that the DCOH decreased by one full day. This would not be good information for the management or financial teams as the cash flow is decreasing by one day. In addition the quick ratio dropped a few points showing that the organization is becoming less able to pay for the debt it is incurring. Relationship between Revenue Sources and Expenses The revenue sources relationship with the expenses go hand in hand. The net patient revenue increase discussed in the report by the chief financial officer showed with the
Unemployment also shows a slow growth in economy. So an increase in unemployment rate will decrease the demand and the affect will be better in case of lowering rate in unemployment. The following picture shows it very
The company is over-liquid and has no debt, from which the shareholders are suffering because all acquisitions and investments are with high costs and low risks. BKI needs to create leverage by borrowing more, thus increase its ROI and ROE of its acquisitions and investments. At the moment Blain shows the lowest ROE in its sector (by far) while increasing its cost of capital, in other words the cash held remains unutilized and thus reduces the value of the company. Companies with low ROE are less attractive to investors. On the other hand, debt has a much lower cost of capita and provides a good opportunity to take on more
Not wanting to compromise work quality and ethic this option not exercisable. (See appendices 2&3 ranking this option last in financial return on investment) Lawrence Facility places NB in a catchment area to augment its labor shortage with experienced quality workers at a lower wage rate (10%) compared to Everett. This was due to the closure of several local shoe factories and depressed labor market. NB will have local government financial and administrative Aid to ameliorate the cost of opening the facility. Overall operating cost would be lower due to the lower wage bill while overhead and operating cost would be about the same as Everett.
The decrease in staff costs of €10,199 from 2009 to 2010 could be a possible cause for the increase. Lease rentals and other hire charges decreased by €196. Restructuring costs also decreased by€13,584. 12. Identify three efforts made by the Group to emerge from the economic downturn.
Explain the circumstances of the LTCM’s collapse, and why the strategies presented in part a) failed. The strategies mentioned before could only generate tiny profits. Because after all the biases between similar bonds or derivative instruments are small, the profit made from their convergence is also small. Therefore leverage has to be used to create attractive returns. The risk control of LTCM’s was set to the volatility of an unleveraged position in U.S. equities.
What is most revealing about this analysis is that the impact of decrease in GDP seems to be decreasing over time. In Chart 2 the scatter plot shows the output growth and the change in unemployment from 1949 to 2006. The points for 2003 through 2006 all reside far beneath lie the estimated regression line. Across this time period, the relationship between unemployment and GDP growth was nearly zero. This fact contradicts the normal functioning of Okun’s law that would normally display a negative correlation between unemployment and GDP.
Results Y0: ROA = 5.2%, Gross return = 9.3% Targets for Y1 & Y2: Gross return = 12% (Low return investment due to regulatory reasons + 15% Gross return from) other investments Y1: ROA = 5.7% Gross Return = 9.5% IP division’s return on investment too low. The division manager responded: if we had a lot of old machines the way CP does. Y2: ROA = 5.4% Gross return = 5.5% However, return on sales rose fro; 5.1% to 5.5%, ROE rose from 9.1% to 9.2% PS division exceeded the 12% target, CP = 10.8%, IP=6.9% Questions. 1. a. Here for each division, NI = DIBT – share of corporate administrative expenses – share of income tax expenses.
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.
Therefore, the company faces to problems with turning assets into cash. Moreover a low ratio of receivables turnover implies the company should re-assess its credit policies in order to ensure the timely collection of imparted credit that is not earning interest for the firm. As for a low quick ration relatively to a current ratio tells us, that the inventory is high, meaning there are troubles with selling. They, in turn lead to a low profit margin. 2) Calculate the operating cycle.