Nortel Networks, the largest telecom gear maker, last week reported first-quarter losses in line with an earlier warning, but said earnings could improve next quarter as it cuts 5,000 more jobs and trims costs. Including the charges and other costs, Lucent reported a second-quarter net loss of $3.7 billion, or $1.
Profitability: According to the income statement, the profit margin ratio decreases as well with 2.5%. However, the sale revenue has a rise in this period actually and it means the company spends more money on operating expense. Therefore this increase on operating expense indicates a worse control of expense. On the positive side, the ROCE of 2014 and 2015 maintains approximately 30%, it exceeds the industry average (25%). The high ROCE can be caused by the high asset turnover.
Entities, despite profitability level, may become bankrupt if it cannot cover obligations with short-term creditors. Liquidity ratios can be calculated from a company’s financial statements to determine their ability to meet short-term credit responsibilities. In most cases, the higher the resulting ratio, the more apt the firm is to pay their duties to creditors in the short-run (Gibson, 2011, p. 210. Vail Resorts days’ sales in receivables was 22.5 in 2010, compared with 21.7 days in the 2009 fiscal year (MSN Money, 2011). This suggests that the number of average days it requires to collect receivables has consistently risen, conveying a negative trend in the degree of control over credit collection.
EBITDA, the critical measurement of cashflow profit, jumped 38% to £15.6m where as in year 2005, it was £11.3million. In addition, it has adjusted operating profit (before prior year goodwill write off) grew by 38% to £8.2million. Adjusted pre-tax profit (before prior year goodwill write off) rose by 44% to £7.3million from £5.1million in year 2005. Profit after tax climbed to £4.5m, representing a 28% increase. Basic earnings per share rose from 5.26p in 2005 to 6.60p in 2006, a 25% uplift.
As the relative role of the private sector increased in the economy, the importance of enterprise management and performance correspondingly increased. Looking more deeply at Thailand’s performance, manufactured exports grew by about 23% per year between 1980 and 1995, almost doubling during 1992-1995. However, in 1996 export growth fell practically to 0 per cent, with labor-intensive exports usually identified as the main culprit. Certain factors are generally cited as responsible for this abrupt and dramatic decline: · External factors cited included the emergence of new competitors, with the coming on stream of new production facilities in lower income/lower wage countries such as China, Indochina, Philippines, further complicated by the30% devaluation of the Chinese yen in 1994; · Domestic factors cited generally relate to rising wage rates and overvalued exchange rates. Domestic wage rates during 1991-95 rose about 11%, on average or about 5% increase in real wages per year, cited as the key factor in the slowdown in growth of labor intensive exports.
According to the Commerce Department, the total value of goods and services slowed to 2.3% with a previous rate of 1.8% last year. The gradual decrease in growth indicates that the economy may be reducing to a more sustainable pace, and avoid another intererst rate increase from the Fed. The increase in employment costs may yet sway the Fed to to raise interest rates, but July will be decisive. Consumer consumption has fallen from 6% in increase in 1998 to 4% in 1999. The fall in consumer consumption has had its toll on the GDP as it too has slowed.
These facts indicate that Amazon’s cost of goods sold grew faster than its revenue. The income statement in figuer 1 shows that the net income shrank a lot during this four years, it even hit negative 39 million in 2012. The decline value of net income states that Amazon suffered from low or even negative profit. It’s easy to understand Amazon’s profitability by using return on asset ratio and return on equity ratio. Return on asset gives an idea as to how efficiently company is to generate revenue by using assets.
The values of receivables turnover for 2004 and 2005 are 10.21 times and 8.83 times, respectively. This means that IQ’s efficiency is considerably declining in terms of cash collection. The decrease in receivables turnover is explained by the higher increase in average net receivables (71%) than the increase in net credit sales (25%). • The inventory turnover decreased from 3.8 to 3.59. This is explained by the higher increase in the average inventory (37%) than the increase in cost of sales (29%) during 2005.
In 1976, Warren Buffet paid $45.7 million for 34.25 shares of GEICO. Review of GEICO’s historical dividends shows that GEICO has been a very profitable investment for Berkshire Hathaway. The growth rate for 1994 is a sharp increase, but even if the growth rate for 1994 is not considered, GEICO’s historical increase in dividends has been considerably high so that acquisition of GEICO will serve the long-term goals of Berkshire Hathaway. What might account for the share price increase for Berkshire Hathaway at the announcement? Review of Warren Buffet’s historical investment success might explain the increase in share price for Berkshire Hathaway at the announcement.
Their % change in A/R/Overall % change is sales ratio shows a sharp decrease starting in 2005 till 2009 where it reached a low of -19.25%. This could be attributable to the recession in which the company could have been experiencing a lower amount of accounts receivable to sales during that time frame. Dick’s currently has an AR turnover ratio of 102.7x. This has increased over the period by 66.18%, which indicates that they have become better collecting their accounts receivable over the period. In negative correlation, their DSO (Day Sales Outstanding) ratio has decreased over the period by 40.68% down to 3.5 days.