The Australian mining company, Fortescue Metals, is a company whose economic standing has fluctuated greatly within the last decade of its lifetime. This mining company is one that mines only for iron-ore, a commodity used to produce steel, which is very bountiful in Australia. Fortescue Metals is the world’s 4th largest exporter of iron-ore and is one of many iron-ore mining companies based in Australia. Their main competitors in Australia include Vale SA, Rio Tinto PLC, and BHP Billiton Ltd. (Hoyle)
Over the span of its existence Fortescue Metals has accumulated a large amount of debt, though they are making strong efforts towards enabling their company to run effectively enough to accumulate as little debt as possible in future years along with efforts to pay off the debt. Their net debt in September of 2015 was $6.6 billion, while may be more
…show more content…
This purchase was an attempt at company growth by Fortescue Metals to help ensure that it can stay ahead of its competitors. With this land they built a large network of landholdings with power and water infrastructure along with port and railway facilities for the region(Hoyle). This new region and new facilities for production allowed their company to export more iron-ore more effectively and faster than before. With more facilities there were a larger number of mines outputting iron-ore for Fortescue Metals. Along with skyrocketing production, the increased amount of facilities Fortescue could now send and export steel from more convenient locations. All of these advancements would have caused a shift in the supply cure towards the left. The specific determinants of supply changing in this situation to cause this shift would have been an increase in the productivity of this company. In situations like this the company will have an easier time meeting the demand for its product, or in this case
Debt - Equity ratio was included to show that both companies are financed with a large portion of debt, yet remain
They didn’t sell as well as our competitors’ products, we lost a lot of market shares and had less profit. Inventory Management – Baldwin frequently had too much stock in inventory which incurred higher inventory
So in essence the business model changed forcing new companies to grow and the older ones that focused on the old structure
The exploration of gold and steel mining was also another great business in that past period of time named “The Gilded Age” and it was important to make the country expand itself through the rural exodus combined with the construction of railroads that helped not only the commerce development but it also influenced the arise of new industries on its way
“Formerly, most textiles and metalworking industries had been situated in areas where water power was available and distances were small. With the growing network of railroads, coal as fuel became a real alternative to water power, and railroads provided transportation of the finished products of the mills. ”17 This happened because transporting goods have become easier with the help of railroads. The time taken to move the goods from one place to another did not take too much time anymore as it were before. The cost to transfer the goods also were lower than before.
Lumber and shipbuilding was also a large facet too. Providing a bustling economy that was successful for many years to
(3) Technological breakthroughs, a wealth of technical improvements further added to the increase of influential industry. The demand for meat and transport it to feed the Union troops urged the development of the refrigerated railroad
As trains moved the good from rich resources from west to east, Railroad development boomed. Steel and oil were highly in demand. As a result of this industry, a number of businessmen earned wealth.
From 1740-1900, the production of iron in Britain increased exponentially from only 17,350 tons in 1740 to over 9 million tons in 1900. (Document 8) The job of mining this iron out of the earth opened up to many more people because of the high demand of this natural resource. This increasing amount of iron was used to build machines. Now there were jobs that opened up to build these machines.
The pumps that the Wilkerson company produces are the “bread and butter” of this company. These products are produced at a high rate with a high price competition. As stated earlier, due to the severe price cutting by the competitors, the pre- tax margin of the company dropped extremely low to 3% percent and gross margin to 19.5%. Another product that the company produces are valves. The valves have remained steady around its planned gross margin of 35% with actual of 34.9%; these products are sold and shipped in huge bulk.
The extreme success of this business was only made possible as a result of
Overall, the increased debt is justifiable as they are producing a lot more, but it does hinder their liquidity and ability to take on more debt. In 2015 the company had a gross margin at 30.8% which was higher than the industry. This is a good indication that the
Technology and optimization ensures that the supply curve moves towards the left. 3. NUMBER OF
The vice president of Sartorian company is having a view that 5 years ago they were having difficulty obtaining reliable supplies of high-quality wool and so they stopped production of the popular alpaca overcoat, but now they can again produce alpaca overcoat as they now have a new fabric supplier. The vice president gives certain reasons of the prediction that the new overcoats will also have many customers and they will definitely have more profit scale than ever before. Albeit the argument sounds good at a cursory glance, there are many flaws in the argument which makes the argument unconvincing. Firstly, the vice president mentions that they now have a new fabric supplier and so they can again produce alpaca overcoats.