Solvency Ratios This ratio used to measure the company’s ability to pay its debt indicates The lower a company's solvency ratio, the greater the probability that it will default on its debt obligations. • Debt to Equity = Total debt Total equity AVON= -4.5 ULTA= .65 REVLON= -5.9 This ratio represent the financial efficiency being used by the company and including both short term and long term debt. A Debt to Equity ratio of 2 indicates that the company gets two-thirds of its capital financing from debt and one-third from shareholder equity, so it borrows twice funding as it owns, this ratio as benchmark shouldn’t be more than 2 to avoid higher interest expense, and in some cases could affect the company credit score. • Debt to assets = Total debt Total assets This ratio indicate that the company gets all its capital finance from debt with negative equity This ratio is comparing between the total debt and the total assets to show the company’s ability to cover its debt using its assets, ratio greater than 1 shows that a big portion of debt is funded by assets, which means, the company has more liabilities than assets AVON= = 1.12 ULTA= .39 REVLON= 1.2 Avon products company has debt more than its
VigRX Plus is made with only natural ingredients. It has the endorsement of Dr. Steven Lamm. So in most cases, it should be safe to use. That said, on the study report, it was noted that some of the participants experience fever of a mild severity. That aside no serious side effects were recorded.
For example, they would discontinue some of Allergan’s earlier stage programs and spend on research on the new company largely for their own benefit. Allergan declined the bid offered as they felt that their company could be valued more and also felt that the merger was not in the best interests of the company and stockholders. They also showed proof that they were better off being an independent company. However, Valeant did not relent and they raised their bid to USD $53 billion for Allergan. This saga went on for another few months until Actavis became the white knight for
Current ratio = Current assets/current liabilities = $1,085 million / $450 million = 2.41 2. Total Debt to equity = Total liabilities / Stockholder’s equity Total liabilities for 2009 = $1003 million Stockholder’s equity for 2009 = $1,845 million Ratio of total debt to stockholders’ equity for 2009 = $1,003/$1,845 = 54.36% 3. Gross profit rate = Gross profit / Sales Gross profit for 2009 = $2,362 million Gross margin percentage for 2009 = $2,362 / $3,540 = 66.72% 4. Return on sales = Net income / Sales Net income for 2009 = $272 million Sales for 2009 = $3,540 million Return on sales for 2009 = $272 / $3540 = 7.68% 5. Return on stockholders’ equity = Net income / Average stockholders’ equity Net income for 2009 = $272 million Average stockholders’ equity for 2009 = $1,732 million Return on stockholders’ equity for 2009 = $272 / $1,732 = 15.70% 6.
The acquisition The reason for the acquisition is different for both Obagi and Valeant. Valeant Pharmaceuticals use acquisitions and mergers as a growth strategy and have acquired many companies throughout the years. J. Micheal Pearson, Valeant Pharmaceutical’s CEO and Chairman, mentioned several reasons of why the acquisition of Obagi took place. These include: • Adding, strengthening and diversifying Valeant’s current dermatology portfolio • Building upon growing aesthetics franchise • Expand market presence with dermatologists and plastic surgeons Adding, Strengthening and diversifying Valeant’s dermatology portfolio: Before the acquisition with Obagi Valeant’s dermatology portfolio consisted of mainly 16 principal products including
EFFECTIVENESS OF THE SYSTEM The system has been implemented from the year 2004-05 have been giving positive results. A comparison of same important financial parameters over the years summarized below: RS IN CRORES Year Turnover Profit after tax Value added 2001-02 6348 469 3074 2002-03 7492 444 3248 2003-04 8662 657 3680 2004-05 10338 953 4254 2005-06 14525 1679 5683 2006-07 18739 2415 7182 2007-08 21401 2859 8323 From the above it is seen that : 1. Turnover has increased from 6348 Crores in 2001-02 to 10338 Crores in 2004-05 where as T.O. has increased to 21401 Crores in 2007-08 2. Profit after Tax has been increased from 469 to 963 Crores from 2001-02 to 2004-05 and 2859 Crores in 2007-08.
She reasons that if the company had recorded more depreciation during the assets’ lives when they were in use, the losses would not be so great. Since depreciation is included among the company’s operating expenses, she wants to report the losses in the income statement along with the company’s expenses, where she hopes it will not be noticed. Instructions: (a)What are the ethical issues involved? (b)Who are the stakeholders? (c) What are the possible alternatives for reporting the losses?
Contrarily to the defensive, in the attractive CVR the bidder tries to encourage shareholders of the target company to tender their shares. Therefore, Allianz, by using the CVR, was trying to keep a part of total AGF’s shares as free float without incurring in the cost of purchasing a massive amount of stocks. In this CVR, Allianz was combining two exotic put options: a down-and-in and a down-and-out puts. This combination would guarantee the target shareholder with a minimum payoff at the exercise date, and the bidder Allianz with the advantage of limiting its cash outlay at the time of the
Current liabilities are those liabilities which are needed to be paid in ordinary course of business within a short period of normally one accounting year out of current assets or income of the business. Examples of current liabilities are:- Bills payable. Sundry creditors or accounts payable. Accrued or outstanding expenses. Short term loans, advances and deposits.
Depreciation is the loss in value of an asset over time until the value becomes zero or negligible. A company can deduct the cost of the fixed assets by making sure they are in compliance with the relevant tax laws. When a company makes large purchases, they will record the items as assets. Examples of fixed assets are buildings, computers, and furniture or in the construction industry machinery etc. The only asset that cannot be depreciated is Land.