Introduction Financial statements provide vital statistics about business’s internal accounts. Albeit these figures are useful they carry less weight, than performing accurate analysis using accounting ratios and comparing it with either the previous year’s ratios, or with the same averages of industry competitors. Section 1 For this the assignment, ratio analysis was performed evaluating BCX’s performance during the past 5 years, focusing on the following ratios: Profit margin Asset Turnover Return on Asset Return on Equity Debt to Equity Ratio Equity Multiplier Figure 2: Ratio Results Section 2 Identifying five external factors that impacted on BCX’s performance the previous five years. 2.1 Profit margin Simply defined as …show more content…
Total Asset Turnover Measures the efficiency of a company's use of its assets in generating sales revenue. 2.2.1 On average BCX the asset turnover ratio for the 5 years, proves that BCX generally utilises its assets efficiently for revenue generation. The proof on this, is in the consistency, which proves that there is a working business formula for the BCX operations. 2.2.2 It is fitting to point out that the average BCX asset turnover is very low, but 2011 was one of the worst. What is meant, when taking the 2011 as the casing point, in the BCX business for every R1 spent, BCX makes back R1.70 cents. 2.2.3 One of the further contributing factors for the low asset turnover is that, BCX as an integrator, also drives its business through commodity hardware and software sales, which are low margin whilst the costs of procuring are high and some of the Original Equipment Manufactures’ (OEM) terms of payment are not always favourable. 2.2.4 It is also possible that in the year 2011 BCX was overly invested in assets. This could also be attributed to the investment made for the 2010 World Cup that had not been flushed out the system and/or acquisitions not properly consolidated, for optimum profitability …show more content…
2.3.2 This could be attributed to a number of factors, one of which could be the low profit margins that may not be understood by the public or investor community. As is generally known that the average common stockholder is mainly interested in the bottom line. 2.3.3 The benefit of low ROEs comes from reinvesting earnings to aid company growth. The benefit can also come as a dividend on common shares or as a combination of dividends and company reinvestment. ROE is less relevant if earnings are not reinvested. In the case of BCX in the period in question, BCX has always issued new shares and acquisition of non-controlling interest per year whilst retaining or reinvesting some and paying dividends in the same year to maintain a balance in the capital outlay through shares for operations vis a vis the Shareholder value. 2.4 Debt to Equity
Speaker The speaker is Annie Dillard, who is also the author of the book. In Holy the Firm, the author expresses her thoughts in regard to questions such as the reason that humans are created by God; the meaning and essence of God’s work; and the relationship between the believers and God. Dillard encounters great conflicts in her belief in God when she saw that a girl in her neighbour’s farm was burned by a plane crash. She starts to question whether every act of God has any real meaning in it and if it does, why would God let a innocent girl be burned by excruciating fire at such a young age when she has done nothing wrong. She even wonders if God is just a powerless creator who has no power to save those who suffer from atrocities.
A whole section in the website dedicated to information about shares, investors, financial reports and investors FAQ. Investors can find any information about past years and different type of charts and graphs. 6c) Air Canada management decided to make some managerial changes in the system. On June, 2015 Air Canada announced a three years financial plan (2015-2018) that include: delivering permanently lower cost structure, profitably growing our business and expanded margins, increased adjusted net income, improved ROIC and achieved objectives restructuring our pension plans.
Introduction Homer Stryker, an orthopedic surgeon, founded Stryker Corporation after World War II. Stryker Corporation was established to create new medical tools and improved medical procedures for patients to help them heal faster and more efficiently. In order to sustain their twenty percent rate of return, and to generate continuous growth and innovation, Stryker relies heavily on acquisitions. One of Stryker’s more notable and largest acquisitions was Howmedica worth $1.65 billion. Large acquisitions can be risky, so we will access Stryker Corporations industry factors and explain why their detailed capital expenditure process works.
Case Study #1 Andrew Gonzalez Saint Leo University MGT 417 Case Study #1 The Meridian water pump case is about a small company that produces small water pumps. There was a meeting held within the department managers that pertained to making medium size pumps for the next 6months. Arguments were recorded between the marketing and sales manager, production manager, HR manager and finance manager. It seems to me that all were pointing the finger at one another on why things couldn’t get done and each department was slowing the other down by not efficiently running their departments.
Metro’s profit margin is also about double the percentage of Loblaws which demonstrates that Metro is better at taking revenue and turning it into profit than Loblaws. This company’s net earnings had a large increase of 12.9% from the previous year. The profit margin is important for shareholders because it shows them that the company is efficient and profitable. In addition, food deflation should ease in the next quarters so this will help grocery retailers, like Metro, to increase their profits and
Cost of equity was calculated using the 10 year UST rate, 5.02%, because it is a good measurement of the risk free rate, plus the firm’s beta, 0.56, multiplied by the risk premium, which we concluded to be 5%. This gave Blaine, when unlevered, a WACC of 7.82%. When taking the $40 million debt and $100 million cash buyout of stocks into account, cost of debt is now a factor. Cost of debt was 5.88%, the bond rating of a AAA rated company like we assume Blaine
Traditionally, pro forma earnings are lampooned as “earnings before the bad stuff”, which are lower than the figure according the GAAP. Companies may present to the public their earnings and results of operations on the basis of methodologies other than GAAP. And this presentation in the earnings release is often referred to as “pro forma” financial information. Many companies were thought to be using pro forma figures not only to exclude one-time charges, but also to strip put recurrent costs and other elements that they claimed concealed their “true” performance. “Pro forma” financial information can serve useful purposes.
ROE- Is the return on equity which is the amount of NI(Net Income) returned as a percentage of equity. EPS- is the portion of profits that’s allocated to each share of common stock. DY- refers to the dividend yield which represents the amount of dividends paid in relation to its share price. P/E- Price to earnings ratio is the ration of the share market price relative to is per share earnings. Market Capitalization-(k) is the total market value of all of a companies outstanding shares.
However, this strategy is highly risky because the asset turnover rate of the company is relatively low. In order for the strategy to
TABLE OF CONTENTS INTRODUCTION 3 1. KEY ISSUES: PROBLEM STATEMENT 5 GREYWELL’S ALTERNATIVE OPTIONS 6 a. ALTERNATIVE 1: ACCEPT RASCALS OFFER 6 b. ALTERNATIVE 2: FOCUS ON ADVENTURE DIVING 6 c. ALTERNATIVE 3: RELOCATE 6 PREVIOUS STRATEGIES: 7 a. RESORT DEVELOPMENT 7 b. PRODUCT DEVELOPMENT 7 c. JOINT VENTURE 7 d. MARKET PENETRATION 7 2. WHAT DID THE MANAGEMENT DO/CURRENT STRATEGIES 7 a. SWOT Analysis 8 3. RECOMMENDATIONS 9 CONCLUSION 10 REFERENCES 11 INTRODUCTION Coral Divers Resort is a family owned business by Jonathon Greywell. It has been in operation for ten years.
Growth and Value Creation at Sunflower Nutraceuticals Sunflower Nutraceuticals (SNC) is a nutraceuticals distributor based in Miami, Florida. Prior to 2012, SNC had flat annual sales growth with total revenues of $10 million and had been experiencing financing issues due to its thin margins and high working capital intensity. Miami Dade Merchant’s Bank (MDM) was SNC’s previous financier, but refused to increase SNC’s line of credit of $3.2 million, which was limiting SNC’s ability to grow because of the working capital constraints. In 2012, SNC decided to accept an alternative financing option from Averell & Tuttle (AT), an investment bank. AT provided SNC with a line of credit of $3.7 million at a 10% interest rate for a 10% equity stake.
Analysis of Financial Statements Student number: 10221450 Word count: 2993 words Excluding Bibliography Course code: B9AC106 Course title: Financial Analysis Lecturer: Mr. Enda Murphy Company: Whitbread PLC Table of Contents 1. Whitbread plc 3 Financial Ratio Comparison 6 1.1 Profitability Ratio 6 1.2 Liquidity Ratio 9 1.3 Efficiency Ratio 11 2. Intercontinental hotels group plc and Ratio Comparison with Whitbread 12 3. 10% Stake in Intercontinental Hotels Group PLC 13 Conclusion 16 Market Value and Book Value
(1) Primary ways companies raise common equity: A company can raise common equity in following two ways: i. By retaining earnings and ii. By issuing new common stock. d. (2) Cost associated with reinvested earnings or not: The companies may either pay out the earnings in the form of dividends or else retain earnings for reinvestment in business. If part of the earnings is retained, opportunity cost is incurred, stockholders may had received those earnings as dividends and then invested that money in stocks, bonds, real estate and others.
1. What we know about profit pools is that: ‘Profits don’t necessarily follow revenues’ and that ‘Today’s deep revenue pool may become tomorrow’s dry hole’. In this article we are focusing on Apple and the way how it managed to recognize the variability of profit, and along with it, could find out the best way of realizing it. Apple has three main businesses as top priority: Macintosh, iPod-iTunes and iPhone. These are the pioneers of superior improvement in PC, music and smartphone industries.
Porter’s five forces model To analyse the microenvironment facing United Biscuits in China, Porter’s five forces model is selected to provide an understanding of the competitive forces, to determine the competitive position of the company and profitability within the biscuit industry whilst offering a framework for predicting and influencing competition over time (Porter, 2008, p.80). The findings are explained below: Threat of new entrants • The high capital cost required for investing in developing distribution, sales network and acquiring production equipment could deter new entrants. The barriers are high when capital is necessary for unrecoverable expenditures such as marketing and product development capability which is difficult for new entrants to succeed in the short-term (Euromonitor, 2014; Porter, 2008, p.81).