This project will need $3.4 million less than the P04 project and the only component in the investment, which will be more, compared to P04 is the building cost (378 K$). Cannibalization of other store’s sales As the nearest target store closest to the project is 80 miles away, no cannibalization of sales is expected. And this store will generate a sale of $30.5 million in 5 years, which will be almost 2.7 million dollars above expected sales from P04. This store is assumed to take it’s a maximum market share from Walmart in 2008. Store Sensitivities Even if this store has 18.1% lower sales than the forecasted level by R&P, it can achieve the accepted NPV of prototype, besides, construction cost can increase to near $10 million and still the project can achieve the expected NPV of the P04.
An analysis of Costco’s financial data from 2000 to 2008 demonstrates that Costco’s performance is nothing short of average. Table 1.1 contains a few financial ratios that demonstrates their position. Even though sales over the years have more than doubled, costs have had a parallel rise. Gross profit margin has remained steady, which signifies that revenues needed to cover operating expenses have remained consistent. Ideally, an upward trend in GPM would be achieved.
If the sales outlook for the coming three years was only 20,000,000 and B.E. continued producing at the rate of 30,000,000 units, a total of 10,000,000 units would be dumped into ending inventory at the end of each year once again reducing costs of goods sold and falsely increasing income. By the end of year 2013, B.E. Company would have 35,000,000 units sitting in ending inventory taking up space and costing money to store. Once again if the president’s bonus is based off of net income, this situation is the most favorable for a high paying bonus and encourages stockpiling inventory to inflate net income.
A positive trend shows that total liabilities have dropped $1.7 million, which is accounted for by a $2 million, or 42%, decrease in long-term debt. Total stockholder’s equity has increased over $600,000 to $22.1 million, which represents a 3% improvement (“University of Phoenix,” 2006). Riordan has made significant strides in paying off debt and reducing liabilities by 12% and increasing stockholder’s equity in these 3 years. These positives continue to make Riordan Manufacturing a valued company to be sought after by investors. Income Statement Analysis Table
The difference in Net income between 2011 and 2013 was $2.18B. The trend for Cash Flow from Operating Activities is as follows 2013 25.86B, 2012 17.17B, and 2011 67.73B. There was a huge dip from 2011 to 2013 the 41.87B to me that’s a ton of money to make back up. I would give Citi group a C. Due to the fact that they have less money to pay out there debts. Ford Motor Company The total amount of cash available for Ford to pay their current debts is 26.75 billion dollars in favor of assets.
Professor P. Savor Intermediate Corporate Finance 3504 Section 002 Case Analysis#1 Alliance Concrete Alliance Concrete is a ready-mix concrete producer who has had tremendous success and revenue growth in its previous years of operation. Potential economic slowdown, overdue capital improvements, and debt repayment obligations pose serious threats to the financial health of this firm. Despite Alliance Concrete’s success and growth the economy in which Alliance Concrete operates may undergo an economic slowdown, which will decrease demand for its services and products. Alliance’s industry costs for materials are steadily increasing by 2.3% and are projected in 2006 to increase on average by 9%. In 2004, delays and stoppages to the firm’s production due to the collapse of equipment cost Alliance $2.6 million in repairs and a two-week shutdown.
2. Why does a business that has a profit of $30,000 per year need a bank loan? They have a shortage of cash since they are usually taking advantage of the trade discounts. They also have a lot of money tied up in inventory and they are collecting their accounts receivable much later (about 43 days) then they are paying their accounts payable (about 10 days). – ratios in excel spreadsheet 3.
Compare this to its main rival’s trade prices, Apple currently trading at $ 587 per share, Oracle at $28 per share while Google is trading at $582 per share. It makes Microsoft an affordable stock with their stability, we expect the price to continue to rise in the future given their stable revenues and continued innovation. The table below shows Microsoft’s price movement for the past 10 years. Microsoft's Stock analysis 60 50 40 30 PRICE(IN USD) 20 10 0 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 [Microsoft’s end year share price for ten years] Courtesy :( www.nasdaq.com/symbol/msft/stock-chart) Microsoft Corporation has also had great financial results over the past ten years even though the share prices tell a different story. This can be shown by illustration in the table below which shows its annual revenues against the income.
Notwithstanding increasing dividends and a moderately stable share price, the home improvement retail industry remains to struggle due to the fragmentary world wide economic complications. Throughout 2009 Home Depot recorded expenses as much higher as well as the drop in sales. While Home Depot the company is very strong, the drop in sales and net earnings brought fourth some restraints until the economy shows signs of improvement. With this in mind The Home Depot, Inc. initiated strategies in the fiscal year 2008, to help minimize losses while maintaining a strong customer base. Which in turn may have the company to increase their credit programs for consumers with the intention to increase sales.
One of them is connected with oil prices, in 2011 the price of gasoline was triple as high as it was in 2000 (1,25$ vs. 3,713$ per gallon of regular gasoline including tax, see dshort.com, 2009) and cars made by GM are traditionally not of those with low gasoline 5 consumption. This could be highlighted as another example of rigidity of GM and unwillingness to accept new trends and to respond to market needs. Furthermore the macroeconomic development after the crisis in 2008 squeezed the demand for new cars, so that not only GM was facing troubles with lowering sales. Conclusion; We will see if the on-going procedures will be sufficient to get back the lost positions of General Motors Company. What we know is that the process of restructuring is not finished yet, but by now it can be labelled as successful, most important steps leading to eliminating inefficiencies were at least launched.