• A financial asset is considered to have value if it has the ability to generate positive cash flows. • A financial asset is considered to have value if it is acquired at its market value • A financial asset is considered to have value if it is acquired a its book price. When determing the value of a firm, which of the following statements is true? • The timing of cash flows a firm can generate is very important in determing the value of a firm. All else being equal, cash received sooner is better.
A portfolio analysis help a company with making decisions on what products that they must considered to be the main focused and which one they should get rid of. The portfolio analysis raises the issue of cash flow availability for use in expansion and growth for products in the organization. The BCG Matrix and the portfolio analysis would benefit a company to see where they stand with their products and where they should put more focus on to bring that particular product up in the market. Even though there are products that are doing well for the organization they can also become problems. The economy is going through some tough times now and it could be hard to keep the stars the stars and the cash cow the cash cows (Portfolio Analysis,
These scenarios made it possible for the company to enjoy high profit margins. The situation here and the purpose of the paper is to explore alternative ways that the Guillermo Company can use some financial concepts to improve the chances of the company surviving is predicament. For the Guillermo Company to be able to weather these new forces of competition and resist extinction, the company must improve their profitability, match competitors on wages scales and, also eliminate any wasteful operation process. Solutions
Running head: GUILLERMOS FINANCIAL REASONING Guillermo’s Financial Reasoning Dulce K. Parra Corporate Finance FIN/571 Joseph Olson September 14, 2009 Abstract Guillermo’s Furniture Store focuses on the finance concepts and issues leading to better understanding and addressing problems. Guillermo’s Financial Reasoning Guillermo fears the fact that his furniture store will be acquired by a larger competitor forcing him to retire as the new company takes every peso it could out of Guillermo’s Furniture Store causing an overhead costs. However, Guillermo is not looking at expanding his management responsibility by acquiring another organization either. For the reason being that this will
Pro forma financial information is generally used to illustrate the effects of transactions such as business combination, and change in capitalization. There are countless reasons on why companies use pro forma statement in their business, the most significant is the planning and control received when using pro forma. The process of using pro forma statements are less time consuming, they help businesses evaluate and make a better distinction between business plans (Scarborough, Wilson, & Zimmerer, 2009, p. 196). Pro forma statements are an excellent outlet for resources that will help a business forecast expected earnings should the company chose to merge with another company or even if the company wanted to sell off part of it operations (Scarborough, Wilson, & Zimmerer, 2009, p. 196). The pro forma statements are commonly used when applying for a business loan.
The purpose of CMI purchasing CTS is to fulfill the MetroNet’s approved and proposed vision. Osgood has many concerns, which include long-term viability and health of MetroNet. Because of the uncertainties in the housing industries and monetary system, and Merrill Lynch’s introduction into the market it had made the realtors reluctant and as per Randall’s views it was sufficient for CMI to present some familiar and comforting alternative. CTS's management can be seen as eager to be acquired by CMI. And vice versa CMI was eager to acquire CTS.
A firm’s cash flow statements provides very useful data to help investors understand how a company’s operating activities produce cash for the firm. Perhaps more importantly, investors can use a cash flow statement to determine the possibility of a firm generating new cash flows, otherwise known as future cash flows. Two common ways to analyze a cash flow statements, and other financial statements, is to common size the financial statement and to use various financial ratios. Wal-Mart’s positive cash flow comes from the firms operating activities, with this segment being the only segment of the three; operating, investing, and financing, that has positive cash flow. It is crucial that Wal-Mart keeps the firms operating activities cash flows largely positive.
Investors investing in an IPO are aware that it takes time to see a solid return/profit when a company is expanding into new ventures and that risks are involved. Most importantly, investors know that a risk has to be taken for continued growth and for the health of the company. CanGo needs to offer an IPO so that they have the funding to expand and grow. Issue 4 Hidden costs The team at CanGo hasn’t even considered what the hidden costs to the business might be if they branch out into the new projects they are currently exploring. They are not adding additional staff, equipment, or software so spreading the resources out could cause the quality of the existing products to suffer.
Research competitors and industry trends to create new ideas and incentives. Compete with competitors – Price matching. With accurate information and efficient communication within the business will ensure business continuance despite possible problems. 4.0 Reports: Identify the types of reports you would be required to review regularly in order to monitor business performance, why is it important to create and use this report and who would the report be written for. 4.1: Performance Report: This report shows how well/poorly a business is doing based on a current revenue, and can identify performance areas that may need improvement.
One of the marketing strategies that ensure the company of long-term profitability is the personal relationship built with the customer base. Customers will not have the same shopping experience with large grocery stores. If there are items that customers would like to have available in Kudler stores they are able to communicate that to management. Management can then relay the data to Kathy Kudler who will search the world for the best available items to satisfy the customer. People will not have the loyalty they get from Kudler at other grocery marts.