Overall, a rise in revenue and reduction in cost adds to CB’s profitability in Years 6 and 7. In reviewing Competition Bikes total selling expense, it was able to ascertain a huge 33% increase from Years 6 and 7 then managed to decrease that spending in Years 7 and 8 for about 14.9% (approximately $59,000) which is a strength for CB because they were managing their spending. For the Total General and Admin Expenses, Years 6 and 7 had a 20.4 % increase while the following years, 7
LB160 LB160 TMA 1 17 May 2012 Summary Brompton Bicycle (BB) plans effective productivity and performance in a bid to keeping one step ahead of competition by not compromising the uniqueness of its folding bicycles. Butler-Adams, managing director of BB understands the need for innovation and is currently working on a £1m revamp, spearheaded by new management. BB estimates they will sell 19,000 bicycles generating an income of £7m and a pre-tax profit of £925,000. Bikes Bicycles in the UK sell for between £550 and £1,200. Competition among key players is rife on the global market with some competitors manufacturing up to 350,000 bicycles.
This upward trend for Competition Bikes continues from year 6 through year 8, giving the company ample cash on hand to meet their current liabilities. For every dollar they spend, they have over $5 on hand. This indicates that Competition Bikes is able to quickly turnover their short term debt and has less financial strain. However, a high amount of working capital may mean that management has not found a more beneficial way to utilize their cash on hand and is not making the most return on investment possible. Examining year 7 and year 8, higher accounts receivables is seen $717,600 for year 7 from $271,503 in year 6, and $609,960.
Problem 18-4 Suppose Goodyear Tire and Rubber Company is considering divesting one of its manufacturing plants. The plant is expected to generate free cash flows of $1.5 million per year, growing at a rate of 2.5% per year. Goodyear has an equity cost of capital of 8.5%, a debt cost of capital of 7%, a marginal corporate tax rate of 35%, and a debt-equity ratio of 2.6. If the plant has average risk and Goodyear plans to maintain a constant debt-equity ratio, what after-tax amount must it receive for the plant for the divestiture to be profitable? We can compute the levered value of the plant using the WACC method.
Describe the significance of these numbers- what do they indicate? Explain your report relates to our course and to practicing managers. http://investing.businessweek.com/research/stocks/financials/financials.asp?ticker=GM&dataset=balanceSheet&period=A&currency=native http://investing.businessweek.com/research/stocks/financials/financials.asp?ticker=HMC&dataset=cashFlow&period=A&currency=native According to Bloomberg Business Week some of the major difference in the finances of General Motors (GM) and Honda Motor Company come down to the way they handle their Inventory costs and their cost of goods sold. The following information will reveal in detail these differences. Year over year, General Motors Company has seen net income shrink from $9.2B USD to $6.2B USD despite relatively flat revenues.
Explain how fiscal policy might be used to bring about supply-side improvements to an economy.  K2 K2 K2 K2 Fiscal policy is the manipulation of public spending, taxation and borrowing to achieve the government’s macroeconomic objectives. For example an increase in government expenditure or a reduction in income tax should increase aggregate demand and real output. Fiscal policy is also used to improve the supply-side performance of the economy by affecting incentives to work and incentives to invest. Such policies aim to increase the capacity of the economy to produce more goods and services by increasing the quantity or quality of the factors of production.
How does the current year compare to industry? Does the ratio represent a strength, weakness or no concern for Competition Bikes? If a weakness, what steps can the company take to improve the ratio? Working Capital: What is working capital? How do you calculate working capital?
Over the past year the company sold 40,000 skateboards, with the following operating results: Management is anxious to maintain and perhaps even improve its present level of income from the skateboards. Required: * 1. Compute (a) the CM ratio and the break-even point in skateboards, and (b) the degree of operating leverage at last year's level of sales. * 2. Due to an increase in labor rates, the company estimates that variable costs will increase by $3 per skateboard next year.
In this case, not only is time and workmanship to be taken into consideration but also information systems cost as well. Cost for software, hardware, workspace and so forth. Quality is measured by the goals set and achieved specified by management. It results in better organizational performance and making decisions. I believe with new hardware and the CRM solution fully employed increase in business, increase in revenue, better reporting and data access will help the business significantly.
HPL products are part of a $21.6 billion personal care products market in the United States. The market grew approximately 1 percent per year by volume and 1.7 percent by sales due to modest price increases. Private label products in personal care account for approximately 19 percent, $4 billion in retail sales which equal with $2.4 billion in wholesale sales from the manufactures. HPL has a 28 percent share of that market. 2.