An offer to open a satellite bakery at a grocery store location is a great business incentive for a small cake company as trends indicate that 10 percent of all manufacturing shipments are attributed to in store bakery chains. Sara’s Cake Company has a unique opportunity to increase revenues based on the trends reported by the U.S. Department of Commerce for the food industry. “Successful in-store bakery chains have to be skillful in adjusting production techniques to be more efficient and cost effective without affecting the quality of the product” (Khaled & Mapa, 2012). Robust analytical measures help to determine the feasibility of investments by calculating the time value of money. Money available now is worth more than the same amount …show more content…
Within the capital budgeting scope, net present value is used to analyze projected investments and projects to determine profitability. Financial consulting for Sara’s Cake Company will require the measurement of projected earnings generated by the cake company in an effort to determine if the investment is profitable one. Investments in which conclude a positive net present value are deemed profitable in which dictate the investment can be made. Many challenges consist when evaluating a future investment so different levels of measurement are typically required, as net present value becomes the additional tool used in the analysis. Net present value has the component of discount rate in which can determine the expected rates of returns by identifying costs related to financing the investment. The method of valuation is calculated by discounting future net cash flows from the investment of the projects required rate of return. The initial amount of the investment and then subtracted in the calculation. The formula is expressed below: The internal rate of return (IRR) is a vital resource within the capital budgeting process as it is an important phase in the evaluation scope. The internal rate of return is used in the assessment of potential investment profitability. Financial consulting for Sara’s Cake Company will include …show more content…
= -$25,000 + 18000/0.06 + 18000/0.06 + 18000/0.06 + 18000/0.06 +18000/0.06 = $50,822.55 NPV Pursuing this project would be optimal with a positive NPV of $50,822.55. PV Expected Cash Flows $75,822.55 Calculate Internal Rate of Return 0= -$25,000 +($18,000)/(1+.6635)+(18,000)/(1+.6635)+($18,000)/(1+.6635)+($18,000)/(1+.6635/ ($18,000) = 66.35% Internal Rate of Return is 66.35% This investment opportunity for Sara’s Cake Company is positive as cash flow and net present values indicate a return greater than the initial investment of $25,000. Although the project offers a positive NPV, the cash flows are still estimates. The accuracy of these projected figures also depends on experience and skills of the financial
= 2,000; Intersecting cell of 28 and 6% is 0.461297; Multiply number in cell by 2,000 = 922.59= There is 922.59 Interest Earned. $200,000 + $33,600 = $233,600; 200,000+922.59 = 200,922.5925x 1 = 25 6% divided by 1 = 6%; corresponding cell= 0.23300 Multiplied by 500,000 = 116,500 PV= Future Value / 1 + Annual Interest
Corporate Finance Casey’s General Store Financial Analysis Report Kimberly Daily Summary Casey’s General Store is a convenience store who takes pride in serving their made-from-scratch pizza, sandwiches, appetizers, and more for delivery or pickup. Casey’s also provides its customers with fuel including diesel, premium and regular gas. Casey’s General Store has been around since 1968, after opening their first store in Boone, Iowa. After twenty years in the business it became a publicly traded company in 1983 and started making their infamous made-from-scratch pizzas in 1984. This is where the company began expanding more and there are currently 2,315 Casey’s General Stores that reside in 16 states.
This land was purchased by the Gulf Shrimp Processing Division. If this current site is used for the catfish project, then Gulf Shrimp would need to find a different site. The best option would be for the Gulf Shrimp Processing Division to take advantage of buying an option for $100,000 to buy the site in five years for $1,300,000 compared to having no option and the price being $1,500,000. Table 1 shows the present value of these options. By purchasing the land with the $100,000 option, the present value is $907,198 with a 10% interest rate, discounted five years.
Strengths • Decades of Experience: Capital Buns Bakery is known for being one of the main suppliers of bakery needs for the past two decades. • No Preservatives Policy: Capital Buns Bakery has a prestige for not using preservatives on their products and offer very fresh products. • Content Price: the cost of retail bakery products and wholesale orders offers the best deals for the best quality possible. Weaknesses • Cost of content: the cost of content is moderate but not as preferable in compare to other local food retailers • Big retailer’s loyal clientele: loyal clientele’s trust the big retailers that they concur often to.
Introduction Sears Holdings Corporation and Macy’s Incorporated are parent companies of two of the most popular chains of department stores in the United States. Both have numerous store throughout the country and have expanded their services online as well. Regardless of their popularity, there are many other retails stores that offer similar products which increases the competition. Competition, competitive offers, merchandise availability and many others are some of the main concerns these companies face. Technology and increase in popularity of competitor’s store has affected Sears and lowered the stock price of the company.
The total value of the firm has been calculated with the help of PV of cash flows and the continuing value and it shows an amount of
A Financial analysis determines how well an organization is performing financially and whether improvement is needed by reviewing the organization’s financial statements and calculating ratios. I have reviewed Robertwood Johnson University Hospital’s, Saint Peter’s Healthcare System’s (Saint Peter’s University Hospital), Catholic Health East’s (Saint Michael’s Medical Center) financial statements and determined the following calculated ratios. The current ratio using the balance sheet will determine whether Robertwood Johnson University Hospital’s, Saint Peter’s Healthcare Systems, (Saint Peter’s University Hospital), Catholic Health East’s
To analyze important factors approximating profitability, liquidity, long-term solvency, efficiency, and value financial ratios can be calculated. Financial ratios communicate relationships between the different figures on financial statement. Based on historical data and industry averages, ratios can be used to estimate future financial performance, as well as provide observations
Ulta Beauty, Incorporated was founded in 1990 as a beauty retailer by Richard George, a former Osco drug Inc. president. In 1990, it was difficult for a consumer to purchase beauty products without shopping at various retail locations. Comparatively, Ulta Beauty offered a concept of All Things Beauty, All in One Place™. It is currently the largest retailer in the United States offering 200,000 products from 500 beauty brands through brick and mortar stores and e-commerce. The company offers fragrances, hair care products, skin care products, full service salons, and cosmetics.
Kroger Company SEC 10-K Analysis The Kroger Company was founded in 1883 and incorporated in 1902 and is now headquartered in Cincinnati, Ohio. As of January 30, 2016, Kroger is one of the largest retailers in the world based on annual retail sales; they also manufacture some of their own food for sale in company supermarkets. Their primary revenues are earned at point of sale to customers in Kroger stores and fuel centers. As of January 30, 2016, Kroger operated, either directly or through its satellite companies, 2,778 retail food stores under a variety of local companies, 1,387 of which had fuel centers.
Two college dropouts borrowed money from family and friends to open a small business called Saferway in Texas. This occurred in 1978 by John Mackey and Renee Lawson (Hardy). In 1980 the two joined forces with Craig Weller and Mark Skiles and created Whole Foods Market. Seven months later Texas got hit with the worst flood in history.
Assignment: Portfolio Income & costs and profit measures of performance Alibaba.com is a China’s B2B e-commerce company which owns a U.S. IPO that worth $25 billion has become the largest B2B e-commerce company in the world in just a few years and barely anyone expect the company can achieve this results so successful. Referring to the Appendix A, the income of Alibaba has been increasing from year 2010 to 2014. This is because of there has a few key factors of success that carried out by the founder of Alibaba.com, Jack Ma to operate the e-commerce business in the global marketplace.
What insight is provided by the new profitability analysis? What should Alice, Inc. do to enhance its profitability? In order to increase profitability we would advise Alice, Inc. to focus more on production and realization of Regular model faucets, i.e. spend more direct and indirect expenses on Regular model.
We used arithmetic average to determine the annual rate of return. As rate of return calculated using arithmetic average gives higher return compared to geometric average, investors are more likely to estimate their future return based on arithmetic average measure. Hence we use arithmetic average to measure the rate of return to match the expected rate of return required by investors. What type of investments would you value using Marriott’s WACC?
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