Efficiency Ratios The efficiency ratio is used to measure how the company uses its assets and liabilities internally, these ratios to measure the performance in short term. • Accounts Receivable Turnover This ratio used to measure the firm's effectiveness in extending credit and in collecting debts. The receivables turnover ratio is an activity ratio measuring how successfully a In collecting its AR during the year, if the company has AR turnover 2 that means the AR turned over two times during the year. Accounts Receivable Turnover= Credit sales AR average (assume that 75% sales are credit) AVON= 9.1 ULTA= 41.1 REVLON= 4.12 • Fixed Asset Turnover, Reflecting how efficiently a company has used its assets to generate revenue, a higher ratio indicate of greater efficiency in managing and investing fixed-asset. Fixed Asset Turnover= Net sales/ net assets EVON= 1.63 ULTA= 1.9 REVLON= .77 • Inventory turnover Inventory turnover is a ratio showing how many times a company's inventory is replaced over a specific period of time, the higher ratio the more success is the company in selling its inventory.
By finding new markets for its existing products, Coach can restore its revenue performance because it will have increased its market volume. The company can achieve this bit utilizing the opportunity of the emerging markets. However, Coach should not focus too much on China because it is becoming a very concentrated red ocean market because of the rapid inflow of foreign direct investment. As mentioned prior, Coach can also pursue innovation in order to become more adaptive to the volatility of the market conditions (Cassiman & Vuegelers 73). Innovation would be of great use to Coach now that its industry is becoming saturated courtesy of the traditional and haute couture luxury fashion brands.
Also 85%-90% of the information in the accounting income numbers is already captured in the stock prices. This is done by interim reports to reveal the profitability and performance of the company before the end of financial year when the financial statements are issued. The market has then turned to these interim reports and other sources rather than waiting on announcements from the company; with that being said the importance of income numbers on stock prices is not based on timeliness. However Ball and Brown’s research showed that the content of accounting numbers is considerable. About 50% or more of the information from the firm specific component of the stock price is captured in the income numbers.
pg 17 PART A 1.) SMITHSON PLC Computation of varios ratios for interpretation : i.) Profitability Ratios: Gross Profit Ratio: Formula 2012 2013 Gross profit ×100 Sales 7300 ×100 12500 = 58.40% 7045 ×100 13850 = 50.87% Profit before interest and tax (PBIT): Formula 2012 2013 PBIT ×100 Sales
This is one of the greatest marketing machines of the wine world (Liv-Ex, 2012). It helps merchants and experts to have an early opinion of the vintage and the particular wines and with the publication of the experts’ ratings and comments helps consumers to make their decisions. One can argue that this transparency helps to make the fine wine market more efficient since releasing the wines in tranches can help to gauge market reactions and price the wine well (Supple, n.d.). Secondly, selling the wine en primeur provides the cash flow for the chateaux to cover their production costs almost immediately after the harvest. There are evidences especially on the Left Bank that a producer can see up to 75% or more of annual turnover in 24 hours (Swann, 2012).
That rate represents how much we are on average paying interest for the money we have borrowed from various sources. Next, we use that rate for calculation of ENPV (Expected Net Present Value ) or rNPV (Risk-adjusted Net Present Value). The ENPV uses the rate which we fot calculating WACC and uses it to calculate the expected return on an investment. ENPV method consists out of possibilities for each scenario that we have. In beggining, we have Cash Flows for each of the scenarios, there should be minimum of three scenarios: best, normal and
1. Using the Consolidated Balance Sheets for Logitech International S.A. (Logitech) for March 31, 2010 and 2009, prepare a common-size balance sheet. Statement of financial position 2010 2009 Assets Total % of total assets Total % of total asset Current assets Cash and equivalents $319,944.00 20.00% $492,759.00 34.66% Short-term investments $1,637.00 0.12% Account receivable $195,247.00 12.21% $213,929.00 15.05% Inventories $219,593.00 13.73% $233,467.00 16.42% Other current assets $58,877.00 3.68% $56,884.00 4.00% Total current assets $793,661.00 49.61% $998,676.00 70.25% Property plant and equiptment $91,229.00 5.70% $104,132.00 7.33% Goodwill $553,462.00 34.60% $242,909.00 17.09% Other intangible assets $95,396.00
The Importance of a Company’s Culture The culture of a company is one of the most important and sometimes overlooked factors in an organization. The culture can increase employee engagement and increase productivity which will allow a company to reach its goals, “From productivity and engagement in the organization’s day-to-day, to an employer brand that naturally fuels recruiting efforts, to creating a lasting brand that customers immediately recognize, there’s no escaping it – culture radiates outward into the marketplace” (Straz 2015). The culture can have a great impact on the employees. Employees thrive in a positive working environment and the ability to engage with their managers without fear of retaliation. When a company creates a
To sustain organizational growth in today’s market it is important to keep investing in your employees and understand the job market intensively. They also started keeping talent data of top 100 employees. By this they derived next 500 employees who are at a very high stage of getting into top 100. The approach was effective and quite helpful for people and the organization grow
(Whitelock, 2003). 2.5 Trained employee and increased productivity: Horizontal labor flow is very important for any retail company. When a firm has well organised and motivated employee to work, they can easily get some benefit from the competitive market place. It also important to make these employees motivated for a long time. For this purpose HR manager of Tesco provides a good environment for working, a good lifestyle, and recognition so that they can give maximum output (Sims, 1990).