The 33% increase showed the strength of the company, but the huge drop in sales demonstrated how Competition Bikes, Inc. (CB) struggled to attain a surge in its revenue which is the result of the 15% decline in sales caused by economic situations. The rise of cost of goods sold (COGS) by almost 32% contributed to the rise in net sales for Years 6 and 7. During Year 7 and 8, CB had an almost 15% drop in COGS which resulted in a bad year for the company. However, COGS remained less than the company’s net sales which is always a financial plus. Overall, a rise in revenue and reduction in cost adds to CB’s profitability in Years 6 and 7.
First I had to find the break-even points for units and dollars and see how the margin of safety had changed and what caused that change. In Exhibit 1, 2, and 3 you can see my data for the break-even points and how I found them. After calculating the break even points I found that each year they were increasing. This happened because the fixed cost increased each year while the contribution margin decreased except for 2006. In 2006 the fixed cost was at its highest due to a new rent that was larger and more employees.
Waitrose Supermarkets: The John Lewis PartnershipWaitrose Limited operates nearly 185 Waitrose supermarkets in London, southern England, the Midlands, East Anglia, and Wales it was acquired in 1937 by John Lewis Partnership, one of the UK's largest retailers. The supermarket deals in fresh foods, clothing and house-ware (waitrose.com, 2007). TABLE SHOWING THE FINANCIAL RATIO ANALYSIS FOR MARKS AND SPENCER GROUP. PROFITABILITY RATIOS unit 2007 2006 2005 Return on capital employed (ROCE) % 27.7 26.2 16.5 Return on shareholders' funds (ROSF) % 46 49 31 Net Profit Margin (NPM) % 12 10.9 8 Gross Profit Margin (GPM) % 38.9 38.3 35 EFFICIENCY RATIOS Average stock turnover period days 27 27 26 Sales revenue to capital employed times 2.3 2.4 2.1 Sales revenue per employee £ 113,193 110,904 106,172 LIQUIDITY RATIOS Operating cash flows to maturing obligation times 0.8 0.5 1.2 Current ratio times 0.5 0.6 0.7 Quick (Acid Test) ratio times 0.26 0.38 0.4 Gearing ratio % 56 64 75 Interest cover ratio times 9.3 6 4.9 INVESTMENT RATIO Dividend payout ratio % 39 39 41 Earnings per share (EPS)
Organizational Analysis of the Longaberger Basket Company November 7, 2009 BSAD F5WW 312 Jacqueline Hagerott Franklin University Organizational Analysis of the Longaberger Basket Company The Longaberger Basket Company is a privately-held, direct-sales marketing company specializing in baskets and traditional home decorative accessories. The company's manufacturing and administrative facilities are located in Newark and Dresden, Ohio. The Dresden, Ohio location has been developed into a tourist destination. The company's products are sold directly to customers at home through a sales force of 70,000 Independent Sales Associates. The most prominent of the company's attractions is the corporate headquarters, where 500 people work within a seven-story building shaped like one of the company's products.
During the early years, Target was stocked with a full grocery assortment, for the 1960’s discount stores was a whole new concept. Today, Target differentiates itself from other retailers by combining the best department store features like fashion, quality and service, with the low prices of a discounter. Target’s offers large, general merchandise and food discount stores, and a fully integrated online business called Target.com where people can purchase from the comfort of their homes. The Company currently operates 1,767 Target stores in 49 states. Target is #38 on the Fortune 500’s annual ranking of America’s largest corporations.
Shortterm debt increased from 0.3 percent in 1984 to 16.8 percent in 1987. Accrued expenses went from 16.6 percent in 1984 to 1.9 percent in 1987. In addition, the inventory turnover decreased from 4.6 in 1984 to 3.2 in 1987 while the age of inventory increased from 79.7 days in 1984 to 113.2 days in 1987. This is a miserable sign because the electronics innovate day by day but Crazy Eddie needed more time to sell the products. The accounts receivable turnover decreased from 135.4 in 1984 to 53.9 in 1987 while the age of accounts receivable increased from 2.7 days in 1984 to 6.8 days in 1987 indicate that Crazy Eddie had some problems on realizing accounts receivable.
Total current liabilities have decreased within the year. This shows that the company is paying off some of their debt and gaining more assets. Although it every business requires debt to get started and continue, a company never wants to be overwhelmed with debt that they cannot pay, because this will lead to bankruptcy. Their long term debt has increased over the year, but the total debt has decreased. The shareowner’s deficit has decreased over the year substantially.
All profitability ratios are showing decline in the year 2008 as compared to 2007. The assets turnover went down by 1.92 times, the profit margin went down by 4.58%, the return on assets turnover went down by 46.57% and return on shareholders’ equity went down by 67.09%, they all went down due to decline in revenues in 2008 as compared to 2007. The solvency ratio has shown improvement in the year 2008 as it down to 15.88% from 24.47% in 2007, which shows a decline of 8.59%. It shows that company has less relied on debt financing against its total assets in 2008 as compared to 2007. Horizontal Analysis The net income in the year 2008 went down by around 35.87%; it was due to decline in revenues by 16.53%.
In measuring the company’s cash and cash equivalent, it was clearly seen that their entire assets decreased by 24% in 2003 and almost 20% in 2004. The total debt structure of Lucent Technologies significantly decreased between 2003 and 2004. Lucent Technologies current liability decreased from 25.6% in 2003 to 24.3% in 2004, but their debt could be thought to be more as long term because these debts rose from 23% of total liabilities to 26.4% a year later. When considering the equity section of Lucent Technologies, it was shown that they had a negative representation of their shareholder equity and total liabilities in 2003 when compared to the numbers in 2004; this makes their company look more like a deficit; although it is likely that improvements will happen and the company’s current situation can improve and become less of an issue as the years progress. After evaluating Lucent Technologies balance sheet, it’s more than likely that the creditors and investors would more than likely be concerned that even though the cash and cash equivalents are decreasing, the assets are accelerating steadily.
These are the first losses reported by their commercial insurance business in the last three years. Next, not only is the frequency of policy renewal requests being processed late steadily increasing but they have also experienced an uptick in lost renewals as a result. The culprit is Fruitvale’s turnaround time (TAT). The calculated TAT for the week ending 9/6/1991 is 8.2 days which, when compared to the 1-day TAT promised by their largest competitor, Golden Gate, is exceptionally high. Their backlog of policy requests (WIPs) for said week is 82 and the number of new policies and endorsements do not seem to be generating as much revenue as in the past.