When Mr. Kay calculated the financial ratios, he realized that the debt ratio of Huggy Bear Toys was different than the industry average. Therefore, he wants to know what the growth rate of the company would be if the debt ratio of Huggy Bear Toys were equal to the debt ratio of the industry (45%). To be able to calculate that growth rate, you need to find the new income statement and balance sheet items by taking into account the information provided below. If no information is given about an income statement or balance sheet item, assume that this item is not going to change. i. The interest rate on the short term debt (notes payable) will still be 6.5% and long term debt is 11%. ii. The ratio of notes payable to long-term debt will stay
In 2005, the Vermont Teddy Bear Company produced a controversial bear for the Valentine holiday. The bear that was made was called “Crazy for You” and wore a straitjacket. It became an issue when the company was confronted for offending the mentally ill. After the problem became apparent to the organization, it responded by saying that it would continue selling the toy until the inventory was empty. It was put out for the public in January and was sold out by February 3. The ethical issue in this case is whether or not Vermont Teddy Bear Company handled the situation ethically correct.
The EAR (6.6%) can deal with debts of different payment frequencies. Nonetheless, nominal rates should be used because the total costs, which are naturally small on public debt issues, decrease the net proceeds from the sale.
Irwin Toy Limited was a Canadian distributor and manufacturer of toys. His toy company was of Canada’s oldest toy company and remained independent and family owned until 2001. Sam Irwin and Beatrice Irwin were the two founders of the company during 2001 in Toronto. Irwin Toy Ltd. v. Quebec, 1984 was a case was taken all the way to the Supreme Court of Canada, where the case was addressed whether or not the prohibition of commercial advertising directed at children under the age of thirteen in Quebec, Canada is constitutional. In the 1980’s Irwin Toy Ltd. decided to broadcast a commercial for children under the age of thirteen, which happen to violate the prohibition of commercial advertising directed at children under the age of thirteen,
a. The cost of debt is the money company has to pay for using the funds. In our case, annual cost of debt is kd: kd/2 = r = 5.0%. kd/2 = (47.5 + [1000-891] / 30) / ((2*891 + 1000) / 3) = 5.5% We have to multiply t...
The first method we will review is the accounting method. Through this accounting approach we will analyze specific ratios and their possible impact on the company's performance. The specific ratios we will review include the return on total assets, return on equity, gross profit margin, earnings per share, price earnings ratio, debt to assets, debt to equity, accounts receivable turnover, total asset turnover, fixed asset turnover, and average collection period. I will explain each ratio in greater detail, and why I have included it in this analysis, when I give the results of each specific ratio calculation.
OBJECTIVE : To evaluate present organizational structure and management control system of Birch Paper Company particularly on the decentralized operations of its divisions with respect to its overall performance.
In 2007, the international toy manufacturer, Mattel, Inc. issued several recalls for millions of their products. These recalls were for safety reasons in that testing at the manufacturing sites and special test laboratories showed that millions of their toys were coated with dangerous amounts of lead in the paint. This lead based paint contains a potent neurotoxin that if ingested can cause serious harm to children. Mattel assured the public that the problem would be solved, the recalled products would be collected and replaced, and that the company would never let this type of incident happen again.
What does the phrase toy safety mean? What are the aspects of the toy safety? Toy safety is ensuring that toys are safe for children according to specific safety standards. Therefore, before manufactures sell their toys to the public, the toys must pass safety tests to prevent injuries. For instance, from a consumer perspective, when choosing toys for their children, there are certain characteristics to observe such as, buying toys large enough to avoid choking, making sure toys like stuff animals seams are reinforced, and checking if any paint is peeling. Unfortunately, there have been times when certain toy products are recalled due to safety issues. This is why toy safety should be the manufacturers’ top priority and must comply with specific safety regulations. Although toy safety concerns continue to occur, toy testing is an essential step for improvements and for satisfying the consumers’ needs, which should be every toy firm’s main goal
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.
The company's financial growth is very important to both the company and to your salary requirements. You may not want to crunch the numbers yourself, but you will want to understand the balance sheet, the status of the company's finances at a given date. On the left are the assets, all of the organization's valuables. Current assets are those that the company can convert quickly to cash. On the right are the company's liabilities-what they owe. Current liabilities are the company's debts due in one year, paid out of current assets.
ii. A company borrows £2,000,000 in 1998, with a fixed interest rate of 8%, payable annually for a 5 year period.
Financial ratio analysis can be an invaluable resource to investors and external users who must determine the financial stability of an organization. This is important, because financial stability represents the soundness, dependability, and efficiency of the business. Understanding how to calculate and interpret financial ratios is an important step in analyzing the financial health of an organization.
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.
As a consultant for Toys, Inc., I have been called in for my advice by the company’s president, Marybeth Corbella; on which of the two proposed options would be best for the company and for the customers as well. Toys, Inc. is a 20-year-old company that produces toys and board games, our company has a reputation built on quality and innovation. Although we have been the market leader in our field, the sales have become stagnant in recent years, and sales have begun to decline when comparing them to the sales in the past. With the company’s managers attributing the decline of sales on the economy, the company was forced to reduce production costs and layoffs in the design and product development departments; this action will hopefully increase
The debt ratios increased by 2.7% to 57% more than double the industry standard of 24.5%. The long term debt increased from $700,000 to $ 1,165,250 an increment of 66.5% in the year 2002. The company is currently highly leveraged thus it needs to work on reducing long term debts and continue to increase assets. The times interest earned ratio dropped by 0.3 to 1.6 in the year 2003. The company could face difficulties making interest payments in case of a sales slump.