Case 1-2 Henley Manufacturing Inc. on page 49 of your text. Required A: What are the potential costs and benefits to Henley Manufacturing of announcing its sales and earnings goals at the shareholders meeting? Potential costs There are various underlying factors that are to be considered if Hanley Manufacturing is contemplating announcing the company’s earnings and sale goals during their upcoming meeting with shareholders. As indicated by the financial manager, disclosing sales and earnings goals is not a normal practice for Hanley Manufacturing and also indicated that only information that is requested by shareholders are discussed. Hence, some potential costs that the company could incur as a result of their inability to meet the sales …show more content…
With renewed interest this creates the possibility of lowering Henley Manufacturing costs associated with debts and their ownership or shareholder financing. Additionally, there is a likelihood that if shareholders are aware of the goals that are set forth by Henley Manufacturing they would better understand the threats and rewards associated with their investment (Iatridis, 2016). This disclosure could be a benefit because shareholder’s and the company’s relationship could improve due to the open lines of …show more content…
Shareholders are more concerned with the company’s financial stability, productivity and cash flow projections versus other internal financial facets of Henley Manufacturing. Hence, it would be within reason to make recommendations based upon the information presented. Goals to be recommend incudes annual sales growth which is expected to increase by 15% in the next year, and the earning potential which is expected to grow by 20%. Additionally, shareholders would also be interested in the return on net tangible assets which is anticipated to increase by 16% and the return on common equity which is projected to increase by 20%. Furthermore, importantly, shareholders are also very interested in the company minimum profit margin which is expected to be 5% (Revsine, Collins, Johnson, Mittelstaedt, & Soffer, 2015). The profit margin informs shareholders how much proceeds earned from sales exceeds costs incurred in the
Speedster Athletics Company has been able to generate favourable gross margins over the last three years consistently over the industry average of 26%. Gross margin is in a declining trend over 2010 to 2011 where 2011 gross margin is 27% (1371/5075*100%) which is 1% lower than 2011, however this is above the industry average level, proving that Speedster company is capable of generating better margins.
Employee motivation and rewards are effective means to retain employees. When an employee is motivated, his or her needs are being met. When an employee is unmotivated, his or her needs are not being met which results in a high employee attrition rate. Riordan Manufacturing is experiencing a high attrition rate. Riordan Manufacturing has 3 plants and employs 550 people. Recently, Riordan hired Human Capital Consulting to perform an analysis on the underlying issues that are causing the decreasing employee satisfaction and to recommend courses of action that will address the underlying issues. Research has been done to identify the issues and opportunities, the stakeholders and ethical dilemmas, and the end state vision. A gap analysis has also been performed to determine the gap between the current situation and the end state goals. Riordan Manufacturing will use this information to determine the best way to proceed towards improving its working environment for the employees.
Rocket-Blast, LLC, a beverage maker, has seen its profit margins reduced which presents a real problem for the company going forward (Precord & Macdonald, nd). Management has decided that operating costs must be reduced in order to increase profit margins to
Corporations keep various types of financial records and it is the responsibility of managers to make sure that the records are maintained and resolved at the end of the fiscal year. Most company has shareholders that want a year-end account on how the company has done and with a projection of what the company is capable of doing in the future. The shareholders have a vested interest and want to be kept informed on how the company is doing financially. Financial records for major corporations are public knowledge and this paper is comparing Target and Wal-Mart and their financial standings.
WMC’s accounting practices incorrectly attribute fixed manufacturing costs to the three Detroit groups in a proportional manner, leading to Group 3’s lack of profitability. Discontinuation of Group 3 pushes a greater percentage of the fixed costs to the other groups impacting their ability to be profitable. Additionally, WMC does not consider the degree to which production at the Detroit plant contributes to the operations and profitability of the other plants. Presently, each plant is accounted for individually. WMC should reevaluate and consider the...
A strategic plan will maximize Riordan’s resources to achieve its business objectives and maximize its value. For Riordan to have a successful strategic plan it is best for the company to perform a SWOT analysis. The first step is to identify Riordan’s strengths. Riordan Manufacturing has three operating entities located in Georgia, Michigan and California, plus a joint venture in the People's Republic of China. This allows for them to expand their reach into new markets in both domestic and foreign markets. Riordan has secured fifteen major customers, twelve minor customers, and a government contract for fans. Riordan Manufacturing has weaknesses within the company. It needs to consolidate customer information within all of its locations in order to deliver better value to the customer. Riordan needs to consolidate the close of the general ledger and the income statement and balance sheet in a more efficient and timely manner than is currently being conducted. Riordan has weaknesses in finding an inexpensive and labor friendly way in which to conduct audits. Riordan manufacturing has great potential for opportunity and growth. Riordan can reduce operating expenses, which will lead t...
This analysis will identify the current value of the company at a stand-alone value and explain why Nestle Food would want to buy this company and the synergies involved for their reasoning. We will also discuss who will benefit if Reynolds Metals were to sell to Nestle or were to create an IPO. Finally we will provide a recommendation for Reynolds Metals that will be most beneficial to the company financial needs.
1. Context: In early September’08 Giant Consumer Products, Inc. (GCP) realized that Frozen food division, which had been growing at 2.8% (compounded annual growth) rate since 2003 to 2007 and accounted for almost 33% of GCP’s overall business volume, is not doing well now. The sales as well revenue volume is around 3.9% behind the target. Most specifically marketing margin (key parameter for GCP business) was also under plan by 4.1%. GCP had been doing well in wall-street but performance of past couple of quarters has increased the worries of GCP i.e. whether GCP will able to maintain its profitable growth.
In mid September 2005, Ashley Swenson, the chief financial officer of this large CAD/CAM equipment manufacturer must decide whether to pay out dividends to the firm¡¦s shareholders or repurchase stock. If Swenson chooses to pay out dividends, she must also decide on the magnitude of the payout. A subsidiary question is whether the firm should embark on a campaign of corporate-image advertising and change its corporate name to reflect its new outlook. The case serves a review of the many practical aspects of the dividend and share buyback decisions, including(1) signaling effects, (2) clientele effects, and (3) finance and investment implications of increasing dividend payout and share repurchase decisions.
This financial ratio analysis will help to identify Rolls-Royce’s strength and weaknesses during three years period from 2011 until the end of 2013. While it is a helpful tool for investors to make investment decisions base on profitability of the company, managers can make strategic decisions of the company. However, there are some limitations in using financial ratio analysis alone when make decisions. Comparing ratios with the industry norm and with the company’s rivals, the user of the financial ratio analysis will be able to anticipate future prospects. Rolls-Royce’s nearest rivals are General Electric (GE) and Pratt & Whitney, owned by United Technologies Corporation (UTC). These world 's top three companies are investing massively in R&D to satisfy demand of a booming global market for environmentally cleaner, energy efficient power engines that result in a huge number of orders of commercial airliners. All top
While analyzing the data for The Body Shop International case, I noticed some trends and have compiled my assumptions for the next three years. I have compiled pro-forma statements for the fiscal years 2002, 2003 & 2004. These figures are based on the percentage of sales method for pro-forma financial modeling. Simply put, I used the sales figures from the past three years 1999, 2000 & 2001 and applied a growth rate of 13% increase to sales. Below are some additional assumptions that I have created to illustrate how the firm can become profitable while increasing market share and maintaining stockholder interest within the firm over the next three years.
Finally, I have suggested some recommendations for the issues that I have mentioned above. In reference to the first issue, it will be profitable for the company to change to level monthly production.
Any successful business owner or investor is constantly evaluating the performance of the companies they are involved with, comparing historical figures with its industry competitors, and even with successful businesses from other industries. To complete a thorough examination of any company's effectiveness, however, more needs to be looked at than the easily attainable numbers like sales, profits, and total assets. Luckily, there are many well-tested ratios out there that make the task a bit less daunting. Financial ratio analysis helps identify and quantify a company's strengths and weaknesses, evaluate its financial position, and shows potential risks. As with any other form of analysis, financial ratios aren't definitive and their results shouldn't be viewed as the only possibilities. However, when used in conjuncture with various other business evaluation processes, financial ratios are invaluable. By examining Ford Motor Company's financial ratios, along with a few other company factors, this report will give a clear picture of how the company is doing now and should do in the future.
Hennes & Mauritz AB (H&M) is a well-known fashion retailing firm that sells fast-fashion clothing for women and youngsters. It is based in Stockholm, Sweden. As of 2013, H&M operates around 2,600 stores in over 55 countries and employed around 116,000 work forces.
The purpose of this report is to determine if it is profitable for Great Central Bank to invest in the shares of F & N long-term, and we can do this by analyzing the financial statements of the Group, and also through information that we have obtained from other sources. We will look at the trends of their financial ratios for the past 5 years, and from there, project the future trends of the share prices. Using Porter's 5 Forces of Industry Attractiveness, we will also evaluate the prospects of the industries that F&N is in. We will then look at their competitive strategy, their value chain and other non financial measures.