Sunflower Nutraceuticals Case Study

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.

The ROE is often seen as the primary measure of a company’s performance as it measures the profitability of shareholder equity by measuring how much the shareholders earned for their investment in the company and this tells common shareholders to know how effectively their money is being employed. The higher the ratio percentage, the more efficient management is in utilizing its equity base and the better return is to investors. However, the higher ROE does not necessarily mean better financial performance of the company. But rather, the higher ROE can be the result of high financial leverage, but too high financial leverage is dangerous for a company 's

Thus, they are in a position to cover any debt obligations that may come up quickly. Their inventory turnover has been relatively steady over the five years of data. In year 7 their inventory turnover reached 3.2 which means inventory is moving through to customers at an increased rate over the year which correlates with their increased sales. This statement is supported by the fact that the days inventory held for stoves has dropped over the past five years from 146 days in year 3 to 114 days in year 7. These reductions have allowed for the reduction of their days in accounts payable from 51 all the way down to 11.

In 2012, Costco’s net income is $1.709 billion USD; then it is increased to $2.039 billion USD in 2013, $2.058 billion USD in 2014, and $2.377 billion USD in 2015. Overall, Costco’s net income increased by 39%, and these increases occurred through out the four fiscal years. This is a strong indication that Costco is becoming more profitable. Costco Wholesale Corporation has two parts of revenue, one is its sales of merchandises, and another one is the membership fee consumers has to pay in order to enjoy its service. During the 2015 fiscal year, Costco’s membership base grew by six percent and has more than 81 million members worldwide.

Their portfolios held a lower percentage of subprime loans than that of commercial and investment banks. Nonetheless, they did increase their acquisition of these loans to keep their shareholders happy in what had become a very competitive marketplace. Before the financial crisis, they owned or guaranteed $1.4 trillion, or 40 percent, of all United Stated mortgages. Of that, only $168 billion was in subprime mortgages, They are Now Owned by the Government: What It Means

Costco, regardless of external pressures from other wholesalers such as BJ’s Wholesale and Sam’s Club has distinguished itself and experienced tremendous success as a result. In 2010, Costco brought in a net income of 1.3 billion whereas its competitor BJ’s Wholesale drew in only 132 million. The following year, Costco’s net income grew to 1.46 billion while BJ’s’ fell to 95 million. Ever since the mid-2000’s, Costco’s profit has steadily increased while it’s competitors have struggled to simply keep their profits from plummeting. Part of the reason Costco’s profits remain so high is because they outnumber their competitors in terms of store locations.

The productivity growth of the United States since the late seventies has not influenced the majority of workers (Howell). Minimum wage in America has collapsed from the year nineteen-sixtyeight to nineteen-eighty-nine by a dollar fifty six. We have recently had the longest period in time without a raise in the minimum wage between the years of 1997 to 2007(“The”). The higher wages the minimum wage can provide can increase consumer purchasing, raising productivity, improving product quality, and improving company reputation. All of these reasons contribute to the improvement of the economy.

Benefits were $151k over for the month and $132k over YTD, primarily the result of three covered members at or approaching the stop-loss level. Chargeable supplies were $141k over budget for June, a by-product of strong Orthopedic volumes in the OR. The Medicaid Enhancement Tax finished the year $308k over budget due to higher taxable revenue than

It is used to measure a company's pricing strategy and operating efficiency of a firm .During the last four years Operating profit ratio is highest in FY 2015-16 at 21.06% and the Company has posted highest profit in that year . Thus, this financial year can be termed as the best year for the company in terms of operating profit ratio for the last four years .This ratio has increased gradually in the years thereby indicating increased operating profit Company’s operating margins increased from 18 to 21% margin during the same period. Operating EBITDA increased by 17.5% At 22.4% of net sales and other operating income, the operating EBITDA margin.

In the span of the past few years, shareholder litigation is a core source of conservatism (Sohn, 2011). It should also be noted that shareholder litigation is a strong source of conservatism. Litigation also results in the production of asymmetric payoffs. Keeping these assertions into focus, it can be said that understating the assets of a company results in the reduction of expected costs of litigation (Givoly, Hayn & Natarajan,

During this time there were several bills going around that could increase the state fuel tax by 25 cents per gallon. People were arguing that the transportation trust fund isn’t able to pay the debts and the state infrastructure is crumbling. Two democratic lawmakers were trying to freeze the gas tax, knowing that higher gas prices would reduce the number of tourists. This was putting New Jersey in a situation that they couldn’t win, high gas prices would mean lower tourism, but they need to make the infrastructure safe for the tourists to make the trip. From a 2013 report by the American Society of Civil Engineers, they found that 66 percent of the roads were poor and that 36 percent of the bridges were structurally

For the past decade, the growth of global markets has caused the bond of the economy and America 's largest corporations to decline/fallen short. According to Harold, in 2001 thirty-two percent of the revenues of the S&P 500 came from abroad. And, by 08, the figure had increased by 48 percent, as the growing middle classes of nations such as China, Mexico, and Brazil began purchasing more. According to the article, with the growth of markets abroad, the companies can afford to be less concerned with maintaining the purchasing power of consumers. (Meyerson, 2012)

Operating margin/Return on sales (ROS) is the ratio of operating income divided by net sales or revenue, usually presented in percent. According to gurufocus’ statistics (October, 2015), Costco’s operating margins (3.12%) ranked higher than 53% of the 359 Companies in the Global Discount Stores industry (2.99%). Just like Gross Margin, it is important to see a company maintains its operating margin over time. Among the same industry, a company with higher operating margin is more efficient in its operation. It is also more stable during industry slowdown or recessions.