Excello

Using the assumptions given in the case, all elements of income statement and balance sheet can be projected for next three years 2010, 2011 and 2012. Sales cycle of the products of the company is such that sales of a particular product increases initially for few years and then starts to decline as the new technology

JJ has complained on behalf of the performance measurement system because currently his bonus is based off of production cost being less than 43 percent of sales. JJ believes that the production facility is operating as efficiently as, if not better, than it has before the expansion. Due to this performance measurement JJ’s ownership when from 25 percent to 8 percent and he is losing bonuses and annual dividends.

The remainder of this note discusses each of the steps in the process and then provides an exercise on the various financial measures that are useful as part of the analysis. The final section of the note demonstrates the relationship between a firm’s strategy and operating characteristics; and its financial characteristics.

Liquidity Risk: The liquidity risk of Telstra can be analysed from the help of these two ratios

The company has been functioning well in terms of generating profit and demand so far. However, there will be a 20% increase in demand for the next month of operations as predicted by management, and the production and supply management's problems may come as a problem they can no longer afford.

HeadGear, Inc is a small manufacturer of headphones for use in commercial and personal applications. In recent times, the demand for headphones has grown steadily; however, the company’s profits have grown at a slower rate. John Hurley, the chief executive officer (CEO), is concerned about the falling productivity and increasing costs. John is aware that if the profits continue to decline, the result can negatively affect the stock price of the company. A decline in stock prices will hinder the firm's ability to raise new investment

Overall, his actions appear to be unethical. 13 Accounting flexibility refers to managers’ discretion in choosing among numerous acceptable accounting policies that cover the same subject. 14 If CA had achieved the same financial results within “allowed accounting flexibility”, Richards’ actions would be legal; but just because accounting is within the rules does not mean that it is ethical. Furthermore, legality is a continuum, and the line between legal and illegal practices is blurry, and subject to individual interpretation. Legality and ethics are also not co-extensive, and thus it would not significantly adjust my argument (D’Souza, Jacob, & Ramesh, 2001; Rizzi, 2002). 15

Harburg Ltd. Epic Ltd. 20 27 9 13 14 25 29 28 22 30 10 30 4 5 6 11 28

Using the assumptions given in the case, all elements of income statement and balance sheet can be projected for next three years 2010, 2011 and 2012. Sales cycle of the products of the company is such that sales of a particular product increases initially for few years and then starts to decline as the new

Following this review, it is my recommendation that we enter into a contract for the purchase of the equipment in question before the end of the year for the following reasons. Currently, our tax rate is not particularly favorable. We have experienced some small reductions in the late 1970’s, however the introduction of Supply-Side economics

The company’s debt ratios are 54.5% in 1988, 58.69% in 1989, 62.7% in 1990, and 67.37% in 1991. What this means is that the company is increasing its financial risk by taking on more leverage. The company has been taking an extensive amount of purchasing over the past couple of years, which could be the reason as to why net income has not grown much beyond several thousands of dollars. One could argue that the company is trying to expand its inventory to help accumulate future sales. But another problem is that the company’s

Also, according to its leverage ratios, the company’s debts are not only very high, but are also increasing. Its decreasing TIE ratio indicates that its capability to pay interests is decreasing. The company’s efficiency ratios indicate that despite the fact that its fixed assets are increasingly being utilized to generate sales during the years 1990-1991 as indicated by its increasing fixed asset turnover ratio, the decreasing total assets turnover indicate that overall the company’s total assets are not efficiently being put to use. Thus, as a whole its asset management is becoming less efficient. Last but not the least, based on its profitability ratios, the company’s ability to make profit is decreasing.

6. There is rich cost data given in the case. This must be used to understand how much profits / market share LT can achieve at various production levels ( we must assume that they product what they sell)

The company have many plans initiated to aid improve the company profit. The company had implemented information system in 2006 which had already indentified many opportunities for enhancing profits and revenues. The merger process calls for the increase in the level of sales to $3 billion within five years

This makes the company look good and they can afford to do this from good financial skills. Decisions like this make a good profit in the long run and all in all this is why it is so important to have a good management team.