I calculated an “inventory turnover ratio” which measures the number of times a company sells its inventory during a year. A high rate of turnover indicates easiness in selling inventory; a low rate indicates difficulty. In 2011, the inventory turnover was 6.1. By 2012 the ratio decreased to 5.2. The decrease may be due to a slow ability to turn around merchandise in sales and potentially due to paying a higher cost for goods.
Assume that (i) if the trial proceeds it is expected to last less than a month and result in two possible outcomes in terms of the price per share established in court: the $273,000 claimed by the plaintiffs, or the $55,400 being defended by Herbert Kohler; (ii) Kohler estimates the probabilities of these outcomes at 30% and 70%, respectively. 5. How would your answer to question 4 change if you also assume that (i) the inheritance tax owed on Frederic Kohler’s estate was 50.2% of its holdings in Kohler Co. (equivalent to 489 shares of the 975 he owned); (ii) the taxes paid by the estate amounted to $27 million (489 shares at $55,400 each); (iii) were the settlement or the trial to result in a revised share price in excess of $55,400, the IRS would likely demand a similar valuation for its claim on Frederic’s estate; and (iv) Herbert Kohler estimates the probability of the IRS’s demand at 100% if he proceeds to trial, and 50% if he
Regarding operating gains and losses, in 2005 Tiffany realized gains of 33.8 million versus 150.7 million in losses in 2004. However, more importantly, Tiffany & Co. decreased inventories in fiscal 2005 from 175.4 million to 43.6 million. This significant reduction in inventory expense within its cash flow operations aided in Tiffany’s substantial increase in cash reserves for fiscal 2005. Increased Inventories and Operating Losses in 2006 In comparison, Tiffany’s net cash reserves in 2006 decreased to 176.5 million from 393.6 in the prior year. The company’s net cash from operations also decreased from 262.69 million to 233.58 million in 2005, a difference of 29.1 million.
Margin of Safety (DOLLARS) Budgeted – break even = 100,000-62500= 37500 (Percentage) 37.500/100.000= 37.5% (Units) 37500/250= 150 3.Compute the company’s margin of safety in units assuming the proposal is accepted. Margin of Safety (Dollars) 137500-58929= 78571 (Units) 78571/275= 286 4. Compute the increase or decrease in profit assuming the proposal is accepted, show the contribution Income Statement for current and proposed. Present Proposed Sales 100,000 137500 Variable expense 64000 80000 CM 36000 57500 Fixed cost 22500 244750 Net income 13500 32750 difference: 19250 4a. What is the operating leverage for the current and proposed?
The author of this article, Jeannine Aversa, is stating that key economic indicators point to the likelihood of a recession. Aversa supports her thoughts by noting the real GDP; “crawled at a 1.3 percent pace in the opening quarter of 2007…even weaker than the sluggish 2.5 percent rate in the closing quarter of last year.” The author suggests the main cause of the economic slowdown is due to “the housing slump.” Consumer expenditures are driving the economy, but Aversa worries about a “fallout from risky mortgages and rising energy prices.” Uncertainty of the Feds actions concerning the interest rates is leading to lower investment spending. The author also states that the Feds decision on raising or lowering the interest is due to the
An instantaneous examination of income statements reads that there were strong sales figures with a worth around $70 billion sales per year. Nonetheless, there was something that caught my eye in 2009, which was the critical drop in sales paralleled to previous years. In 2009 Home Depot net sales plummeted approximately 7.8% compared to the net earnings that were dejected in 48.5% in 2009. In the 2009, dividends were declared quarterly at $0.22500 per share while in July the market price was roughly $28.51 per share. 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.
| Company A | Company B | Company C | Market Average | Price/Earnings | 23.6 | 24.6 | 22.8 | 23.67 | Price/Book | 7.7 | 12.1 | 4.2 | 8.0 | Price/Sales | 2.9 | 2.8 | 2.9 | 2.87 | Price/Cash Flow | 13 | 16.7 | 14.7 | 14.8 | In the next step we use the market average to compute the value of the firm in 2005. Afterwards we discount it and divide it by the numbers of share to receive the stock price according to each of the four
Total asset turnover for SciTronics in 2008 can be calculated by dividing $ 244,000 into $ 159,000. The turnover deteriorated from 1.58 times in 2005 to 1.53 times in 2008. 2. SciTronics had $ 66,000 in accounts receivables at year/end 2008. Its average sales per day were $ 668.49 during 2008 and its average collection period was 99 days.
Net initial investment outlay is $302,040. (Cost of new system + Installation) + (Proceeds from old equipment + Tax on proceeds + Removal cost) = Total cost + NCF (old) = 303,000 +-960 2. Tax depreciation savings = (36% tax rate) x (depreciation of each year) Depreciation for each year based on MACRS 5-year (Wikipedia) 3. Incremental cash flows = (Deprn. Tax savings + A.T. cost savings) each year [pic]2.
In 2003 Jeffrey Immelt received a total of 7403435 in annual compensation as well as 4176576 worth of exercised SAR’s, totaling 11580011 of cash. Out of that, 4.325 million (cash bonus) came as subjective compensation. Both, subjective award and a prespecified performance-based award schemes have their upsides and downsides. But in one particular aspect, a subjective award has an advantage. Imagine a manager, who knows that things are not going to be good this year for the company.