Business risk of GSAP they are going to buy: that it will not fail o Business risk= more business risk means more variability in operating profit which means a higher beta so adjust the Beta coefficient to match it with the level of financial risk incurred by the company. • Beta: Sterling’s proposed acquisition is 0.99 (beta is leveraged on the debt/equity ratio) [Exhibit 7] • Growth opportunities were limited and its business was under constant pressure • The company’s annual sales volume (in units) had increased by less than 1% per year, because of weak growth in overall demand and other company competition, which gives consumers the ability to choose other products • Business risk of buying at $265 million: relevantly low (where there
Such strong revenue visibility should allow the firm to adjust production rates and ride out economic downturns (Boeing website 2012). The current ratio takes Boeing’s current assets and divides it by their current liabilities. Boeing has seen an increase in their current ratio over the last three years. In 2009, Boeing’s current ratio was 1.07. Essentially
Despite a decline in the ratio for the past two years, the company’s current ratio has increased in 2016 by 0.03. The data for Quick Ratio was extracted from the Gurufocus.com and is represented in the excel graph below. The Quick Ratio shows the company’s ability to cover its current liabilities with its most liquid assets. For the past five years, the ratio has been fluctuating under 1, which means that the company cannot currently pay its liabilities and would not be attractive investors as a potential company to invest in. Return on Equity ratio points at the company’s efficiency and earnings performance.
The target market of louis Vuitton in divided into two key segments, the wealthy middle aged women from 35 to 54 years old is the first segment while the fashionable young female adults from the age 18 to 34 years old who have income saved to buy one wishes. Average customer of Louis Vuitton are high level & social class people who are into fashion and very conscious as well. High social status is achieved by owning such products from Louis Vuitton. Demographic Segmentation Louis Vuitton has used Demographic segmentation to segment the market. It divides the market on different groups of life stages based on age, sex and income.
Lower debt levels will encourage the private sector to invest. Cutting budget deficits will give investors greater confidence about the long term performance of the economy. If budget deficits are not cut, it will lead to higher bond yields (e.g. as in case of Spain, Greece & Ireland). Higher deficit also increases the cost of financing the deficit which implies that the future generations will be paying interest on the current levels of debt.
Ignore young generation and their preferences. LV pay attention only on adults with high income. Louis Vuitton company opportunities Declines in the luxury market tend to rebound. “Luxury has to reinvent itself every few years, and … it will return to the traditional meaning of something unique and exclusive.” Prices of lines of luxury products will always fluctuate but the luxury market prices are inevitably level
However, the country faces high competition in international market, Denim production from neighboring countries such as, Pakistan ,Bangladesh and Indonesia. According to KG Denim and LNJ data, The total worldwide denim fabric capacity from main 300 manufacturing units production will be approx. 7.5 billion yards and is expected to increase to 10.5 billion yards by year 2021. The leading denim fabric production and supply is from China having a capacity of approximately 2-2.5 billion yards per annum . Other major manufacturers are India, Pakistan, Turkey, Bangladesh and Brazil .
Brand loyal consumers reduce the marketing cost of the firm as the cost of attracting a new customer (Levins, 2009) . Brand loyal consumers are willing to pay higher prices and are less price sensitive (Reichheld and Sasser, 1990) .Brand loyal also provides the firm with trade leverage and valuable time to respond to competitive moves (Aaker,1991) . The following are the most common benefits from brand loyalty. 3.6.1 Higher sales Volume The average company loses half of its customers every five years, equating to a 13% annual loss of customers. This statistic illustrates the challenges companies face when trying to grow in competitive environments.
5.0 FINDINGS, SUGGESTIONS AND CONCLUSIONS: 5.1 FINDINGS: The current ratio shows that the company is having sufficient fund to meet its short term obligations. The current ratio has been increased during the year 2013-14 as compared to the previous year. The company’s liquidity ratio shows a satisfactory trend in the year 2013-14, it is 1.7 times more than the previous year. The current assets to total assets ratio implies that the company is maintaining a considerable level of current assets in proportion to total assets. The cash to current asset is having decreased trend from year to year, this situation is not good for company in every year.
Disposable personal income is often monitored as one of the many key economic indicators used to gauge the overall state of the economy. Disposable income is one of the strongest and most followed indicators for economic growth. We analyze the Disposable Income trends from the last 10 years of United States and India. As can be seen, disposable incomes plummeted following the financial crisis of 2008 in the US, while the condition was relatively better in India. Seen as gradually improving signs, both the countries are seen increasing values of Disposable incomes from the year of 2010.