BMG Inc The music industry has experienced dramatic shocks that will ultimately transform its structure. The transformations have been sparked by new technologies and Internet use distributing music as a digital good. The MP3 audio format and the wide distribution network that has become available via the Internet are driving changes in the recorded music market structure and, thus, are simultaneously having significant impacts on the players in the traditional recorded music value chain. Global retail sales of recorded music dropped from $39.8Bn in 1996 to $38.5Bn in 1999 while the popularity of digital music has grown. This reflects digital music’s new role as a “strategic necessity” of the music industry. It is obvious that the digital music format is here to stay and, indeed, is quickly becoming the preferred product choice of music customers. Our group will examine the internal and external factors responsible for shaping this new marketplace and analyze BMG’s roles in the move to distribution of digital music. Financial Analysis BMG Entertainment, a subsidiary of Bertelsmann media, is a privately held company; therefore we can not study its market performance. However they do release financial statements to the public allowing industry performance to be measured (See Figure 1). To measure BMG’s financial health and profitability three tests were performed. These tests were also applied to the other major players in the music industry. An excellent way to determine BMG’s financial health is a quick ratio, also known as the acid test ratio which was calculated and compared to it rivals. The quick ratio is calculated by taking a firm’s current assets minus inventory divided by current liabilities; this allows you see how well the firm can pay back its debts in a timely matter. BMG, with a ratio of 2.39, only trails Sony, and along with Sony they are the only ones to have a ratio over one, meaning the other three firms have more debt than cash and cash equivalents. This is good sign of financial health because BMG has more than twice the amount of liquid assets to cover its immediate debts; unlike its competitors who find themselves quite short. The final two tests net profit margin (net profits over sales) and return on assets (net profit before taxes over sales), measure firms profitability. Net profit margin measures how much profit is generat... ... middle of paper ... ...68 DEM 8,652 £1,143 £1,013 JPY 210,516 JPY 176,191 $6,971 $8,881 $8,769 $9,861 Inventory DEM 1,278 DEM 1,569 JPY 16,274 JPY 12,918 $2,627 $2,555 $2,258 $2,182 Current Liabilities DEM 2,317 DEM 3,100 £2,255 £2,098 JPY 56,749 JPY 54,361 $4,709 $8,146 $9,070 $9,670 Net Profit DEM 1,122 DEM 910 £210 £132 JPY 36,264 JPY 31,863 $946 $686 $168 $1,960 Taxes DEM 520 DEM 845 £97 £72 JPY 9,038 JPY 3,929 $702 $343 $418 $1,540 Sales DEM 22,985 DEM 25,991 £3,309 £2,374 JPY 226,575 JPY 226,656 $9,474 $12,312 $26,244 $27,333 *note: Inventory level not available for EMI due to differences in British accounting practices. All figures obtained from the consolidated financial reports contained inside the parents annual report. Table 1: Financial Results for BMG
Although Vietnam is rapidly developing, the poverty percentage of the particular country is still high. Topman is considered to offer midrange prices to its customers but the currency of Vietnam is gradually low and unstable compared to the currency of United Kingdom. Therefore, Topman’s product might be considered expensive for most of the Vietnamese when products are converted to Vietnam Dong, which is the currency of Vietnam. As the price of fuel is increasing rapidly, same goes with the logistic expenses. Topman varies each of its collection every two weeks. Therefore, there will be frequent shipment of its products to Vietnam from United Kingdom. The price of Topman’s product will be slightly higher as logistics expenses are added in the cost of the products.
After analyzing the financial statement, I was able to determine several interesting aspects: a .52 debt ratio shows appeal to lenders; a current ratio of 6.31 is very impressive. Seeing that inventory is so unstable and subject to many natural extraordinary events, the more important acid test shows Mondavi has a comfortable, but less impressive ratio of 1.54.
Ratio of profitability is distinct to examine a firm’s ability to produce cash flow which is comparative to some metric. This is to establish the amount invested in the company. This ratio analyses and a...
In order to forecast free cash flow, the first assumptions that had to be made were in regards to sales growth for RMAG;s products. As information regarding diagnostics and agriculture related products is limited and comparable companies are scarce, it was assumed that RMAG’s forecasts were slightly optimistic as to push firm value up therefore an average sales revenue was determined from RMAG and Big Sur’s forecasts. To forecast beyond 2005, sales growth per year was analysed historically and then used to extrapolate future sales until 2010. As the products will originally experience extremely high sales growth due to the unique nature of products, the growth will need to eventually slow to an industry average therefore this is demonstrated in the forecast proforma. Sales growth is expected to slow to 2.5-5%, the range of industry average to economy growth.
To collect relevant data, the annual percentage change in net income per common share diluted, net income/net revenues, the major income statement accounts to net revenues, return on stockholders’ equity, the price/earnings (P/E) ratio, and the book values per share for each year numbers were examined. In order for Sun Microsystems to see a greater return in its bottom line assets, it must consider an alternative approach in operating its organization.
The Financial Review/5 Year Summary for both Woolworths and Tesco were analysed. This analysis included the calculations of the dollar change from 2014 to 2015 for Tesco and 2014 to 2013 for Woolworths. The percentage change was calculated determining an increase or decrease within the period due to the dollar change. This was demonstrated throughout appendix one and two.
Pension Deficit; Halcrow came in 2011 with a significant underfunded pension scheme. Ch2m plan obligations/deficit grew from $188/$49mm (2010) to $1,132/$367mm (2011) to $1,505/$367mm (2014). $225mm of this due to actuarial (pension) losses booked to in AOIC in 2011 ($27mm), 2012 ($83mm) and 2014 ($112mm).
Therefore, IPG’s debt to equity ratio is above industry average (“Financial Strength Information & Trends”, n.d.). In the future, IPG should be equipped to continue to effectively manage the money it borrows. Measures of profitability enable a company to evaluate its profits with respect to a given level of sales, a certain level of assets, or the owners’ investment (Gitman et al., 2015). Companies use the price/earnings (P/E) ratio to assess the owner’s appraisal of share value since it measures the amount that investors are willing to pay for each dollar of a company’s earnings (Gitman et al., 2015).
1. The product, country to export and the size of the market is $ terms.
Music is universally known as an expression of emotion, rebellion against the man, a way of life, a random collection of sounds, an annoying thing kids listen to, or even a vacation from everything, but in reality music is free of all definition. The industry involved in buying, selling and recording of music has grown so old, treacherous, and ignorant that it can not figure out the steps it needs to evolve with the rapidly expanding music industry. Musicians and fans alike are screaming about the dire need of some modern day innovation in the market. Sadly the monstrous corporations that dominate the market have put a lid on the competitive edge, stopped the innovative changes any smaller companies can make.
If the IDR/CNY exchange rate will follow the fixed rate baseline assumptions the profitability of the company will increase and this will favor business. This means that the return on sales of China’s Noah would significantly increase on a yearly basis.
An “analyst” was quoted in the case (in 2002) as saying that “people will pay for music on the Internet, eventually.” This person was skeptical of the willingness of consumers to pay for
Ratio analysis are useful tools when judging the performance of a company by weighing and evaluating the operating performance (Block-Hirt). There are 13 significant ratios that can separate by four main categories, profitability, asset utilization, liquidity and debt utilization ratios. The ratio analysis covered here consists of eight various ratios with at least one from each of these main categories. These ratios were used to compare and contrast the performance of Verizon versus AT& T over the years 2005 and 2006.
As the cumulative cost percentage of the items 1, 2, 3, 5, 6, 9, 10, 11, 14, 18 and 19 worked out to be only 6.06% and that is very small, they are classified under category ‘C’.
The music industry started in the mid 18th century with Wolfgang Amadeus Mozart. Through the decades there has been a great increase in this industry; however, the revenues for this industry have declined by half in the last 10 years. This has been caused by music piracy, which “is the copying and distributing of copies of a piece of music for which the composer, recording artist, or copyright-holding record company did not give consent” . After 1980’s, when the Internet was released to public, people started to develop programs and websites in which they could share music, videos, and information with...