Judging the economic conditions of the time, I would suspect that the company lowered its prices in order to maintain customers since consumer spending was in a down slope. In regards to asset turnover, it grew slightly over the three year period. This indicates that the company is increasing its efficiency in its use of assets to increase revenues. The primary attribute that contributed to the change in ROA would have to be the change in total assets from year to year. When looking at the balance sheet we see that the assets had a major increase from 2005 6o 2006.
The Home Depot Company wants to expand their business in a global arrange. Actually, this situation is not able to happening every year; therefore, I considered it as a extraordinary item. 2. As we know from the fiscal 2007, the value of treasury stock was negative $16,383 million, but when it comes in the fiscal the value of treasury stock was negative $314 million, which means The Home Depot Company may sell their treasury stock for some money, the factor is that the sales of Home Depot Company decreased $13,488 million, therefore, they need money to run the company, so they sell some of the treasury stock for some money. This is the second extraordinary item.
Lucent Technologies Case By: Scarlett Gremard ACC 230 Professor: Craig Hanson After reading the Case Review and reviewing the common size balance sheet, Lucent Technologies has experienced a slight increase in total assets of $1052 from 2003 to 2004. The cash and cash equivalents has decreased from 24% in 2003 to 20% in 2004. Marketable securities had a slight increase from 4.3% in 2003 to 5.1% in 2004. Accounts Receivable has experienced a decrease from 9.5% to 8%. Inventory had a slight increase from 4% to 4.8% in 2004.
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. In terms of cash and short-term investments, the cash and restricted cash account for 44.8 percent in 1985 and 3.2 percent in 1987. This change was related to the short-term investments, a drastically increase occurred from zero to 41.4 percent in 1987. This might resulted from the big explosion of opening branches. The convertible subordinated debentures increased
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.
Financial Analysis In comparing The Hershey Company with one of its closest competitor, Nestlé, we find that The Hershey Company is financially healthier and stronger. Table 1 shows some financial ratios of both companies. In analyzing both the current and quick ratios, Hershey’s ratios are higher; therefore the company has more capability to pay off its financial obligations. The debt-to-equity ratio is also higher for The Hershey Company; this is good news for its shareholders because the greater earnings are shared among the same amount of shareholders. However, the company must be careful because a too big of a ratio can eventually lead to bankruptcy (Investopedia).
Stock is up by +115% on last year, but a 20% rise in sales due to new machinery speeding up production is expected and planned for. The high levels of finished stock need to be available for immediate delivery with a +7 rise in orders on last year. Maintenance and cleaning is up by +135% on last year, with the increase in large machinery, this will be an expense that will have to factored in to ensure smooth production. Overall net profit is down, but machinery is a long term investment and will decrease in expense and generate profit in the next few years. Question 2 (A) The balance sheet will indicate the financial position of a business at any one point of time.
I. Market Ratios: First of all, looking at the market ratios, we can see an unstable performance of the company between June 2008 and March 2010. The stock price is about half of the industry’s average stock prices. Both of them fell dramatically in December 2008 and March 2009, but they went up and have had an upward trend until now. Below is the price chart of Garmin from June 2008 to March 2010: (Source: Msn Moneycentral) The company pays an annual dividend of 0.750, which is much higher than the industry’s average.
If we look at table C-4, total debt/EBITDA ratio is 3.9 in 2001, which is relatively high compare to 1.6 for Kellogg Co., and 1.5 for Keebler in 2000. The merged company is planning to reduce its debt leverage from 3.9 of total debt/EBITDA ratio to 2.4 from 2001 to 2004 based on a cash flow of $200 to $400 million per year available for debt reduction. Since Kellogg’s U.S. share in cereal was mid 30s and 40% globally by 1996, the merged company would grow its noncereal business from roughly 20% to around 35% of sales. Overall, the market share would have a dramatic increase. Based on the recent customer survey, people are more tend to eat breakfast away from their home.
For example, companies that offered a higher discount rate, such as Ross Stores with 70% discounts, were ranked lower in terms of quality. Strategic Implications The strategic map, along with the case facts, displays how businesses that offer discounted products, such as Ross Stores and TJX Companies, are beginning to rise and dominate the industry. This is evident, as both of these companies have gained over 2% in market shares since 2009, while Gap has been losing market shares, down 3.6% since 2006. The growing market of discount buyers means that companies, such as Gap and American Eagle, will have to soon decide whether they want to enter this emerging market or turn to offering higher quality products and attempt to compete with stores like Abercrombie and Fitch, whose market share is small but has remained consistent. It has become evident that remaining in the middle of these two markets, the