Investment Bankers use ratios as a very important tool in assisting clients in the buy/sell side advisory. • Companies in identifying gaps in the operation or departments and devising corrective steps to fill the gaps also use identifying Gaps and Finding Solutions- Ratios. Limitation of Ratios • Effect of external business environment – Sometimes external factors such as inflation etc. can have effect on the company’s performance and the use of ratios can be limited in such scenarios. • Diversified Products/Industries- It is difficult to use ratios to evaluate big companies that work across different industries or location as it is difficult to find a common ratio/parameter to perform such analysis.
The company has been affected by the political landscape in the UK. The major one is the continuous changes to government law especially with regard to different regimes that have existed. For example, there has been an increased legislation on food and hygiene. The European Union passed laws that have come because of political changes and environmental pressure. At some points, Greggs has been affected by other serious factors like war and terrorism.
The negative ramifications of Costco’s strategy execution exist because of weak profitableness, low dividend yield, and moderate liquidity compared with the wholesale discount selection store trade. Once reviewing the positives and negatives of Jim’s ability to execute strategy with success, I’d award Jim a grade of a “B”. 4. What are Jim Sinegal’s core values or business principles for Costco? There square measure essentially five operational principles that focus around moral business practices and treating all stakeholders with the utmost respect.
Bargaining Power of Buyers The level of bargaining power of buyers is moderate because one of the reason is Coles does not have much competitors to compete with.Their Consumers can switch brand easily because they are very sensitive to price and will compare and choose the cheapest alternative. However, the Federal Government and ACCC has set a restriction to lower down the competition barriers to allow new competitors to enter the market which will widen consumers choice and lead to increase of bargaining power of buyer level to high. Threat of Substitutes The level of threat of substitutes is high, this means that Coles has a lot of indirect competitors such as farmers’ markets, specialist grocery stores and convenience stores. These indirect competitors posed a serious threat to Coles. If a farmers’ markets were to expand in offering more variety of products, they would be able to compete directly with supermarkets.
In Costco’s macro-environment, a variety of factors could affect the company’s economic viability. External factors such as inflation, foreign currency exchange rates, levels of unemployment, reduced consumer confidence, and changes in tax policies could unfavorably affect the demand for Costco’s products and services. Prices of some goods and services including food products, are often variant and subject to fluctuations deriving from changes in domestic and foreign supply and demand, competition, taxes, labor costs, or delays in delivery which could significantly affect Costco’s sales. Therefore, the product’s costs and selling could also increase affecting financial results. Other important economic factors include the increasing international
b) unique process of creating increasingly innovative products. c) it is hard for competitors to emulate in terms of its diverse product lines. v. Financial Analysis • The GSC has led to a strong performance post the telecom crash, which means the top management were making decisions on the right things, capitalizing on Corning’s competitive advantages as analysed above. Net sales increased 90% from $3.1 billion in 2003 to $5.9 billion in 2007, demonstrating great growth and improving revenue. Net income rose by 1,064% during the period, from a negative $223 million to $2.2 billion.
The argument is that if firms expect to be bailed out, they will be more inclined to engage in risky business behaviors. In the financial world, one of the primary methods of doing so is to over-leverage the business. Companies will continue to borrow money to grow their businesses expecting that if they are in a liquidity bind, the government will come in to save them. Another type of risky business behavior is failing to oversee or properly assess business risks. The moral hazard of too big to fail institutions also applies to creditors.
Question one Ratio plays important role in analysing company’s performances, whether the company made improvement from previous year or to compare against other company similar industry. It also shows investor especially for creditors such as bank to know their financial performances. From the question, the bank manager told that ABC Limited has too low working capital and too high gearing ratio. Working capital relates the company’s current assets and current liabilities. It measures the ability of the company to pay their current liabilities with their current assets.
However, despite the advantages of ratio analysis, certain limitations will make it less meaningful. Even though it is good for evaluate the continuous past finance performance of the company, people more tend to interest in current and future performances. Ratio analysis can be misleading sometimes as the comparison of different industries and situations is not successful. Moreover, misinterpretation can be occurred as human factor and external factors are not considered in the ratio
Ok, the reader thought that it was okay for me to get money from the old lady because the reader was being “nice” to the lady. Then the reader saw the last sentence. It threw me into embarrassment because when the reader saw the phrase “Sweet—sweet vision!”, the reader was like “oh yes, it was totally an amazing vision.” Then the reader saw the second phrase, “Foolish—foolish dream!”, then the reader was like “oh….” Ok the phrases the reader told you about, they are the paradox. The first phrase is good, and the last phrase is terrible. They made a huge contrast to each other, We thought it was a perfect vision when we get the money, but the last phrase snapped us out of it.