Case Background
Paint-Pen, Inc. is a company that manufactures and distributes liquid paint dispensed in ball-point tubes. The product is sold under the registered trademarks “Paint-Pen” and “Liquid Embroidery”. Aside from bearing the Good Housekeeping Seal of Approval (awarded in 1973), Paint-Pen distributes its products under the home party plan with exclusive franchise agreements with its distributors.
On April 19, 1997, the company was offered for sale to Mr. Warren G. Hamer. Provided with the exhibits that contain the summary of Terms and Conditions of Sale, audited Income Statements and Balance Sheets, and Company History, Mr. Hamer needs to decide whether or not to place a bid, which is due on April 24. However, Mr. Hamer was
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This signals that the excess cash was not highly utilized in the past although it already paid out dividends to its shareholders in 1996. This excess cash can be used for future projects and investments of the combined firm after acquisition.
With Paint-Pen having a debt ratio of 22.74%, Paint-Pen is less risky and has high debt capacity. Adding this high capacity to borrow will add to the value of the combined firm. This acquisition will increase the debt capacity of the combined firm. Aside from the tax benefits that can be exploited after acquiring Paint-Pen, Mr. Hamer’s firm can also put value to the effect of diversification as the firm can diversify by just at the acquisition cost (less other synergies).
Recommendations
Valuations depend on forecasts. The reliability of the forecasts will then depend heavily on complete analysis of the industry, in addition to the evolving changes in the economy. It also requires understanding of the business and financial characteristic of the industry.
The group recommends placing a bid on Paint Pen. Mergers and acquisitions have the potential to create value for acquiring firms. If performed effectively, sources of synergy would be positive economies of scale, economies of scope, and extending technological capabilities of Paint Pen.
Mr. Hamer should decide to buy Paint Pen because efficiency improvements as
Investors often come to believe that a stock is undervalued or overvalued compared to other stocks in its industrial group. To calculate an alternate target price for the current and next fiscal year based on those beliefs, investors can apply the average PE multiple for a company 's industrial group to the average professional analyst 's earnings estimate for the company in those periods. Valuation using the industry 's
Included in the agreement Marion would be majority shareholder of the newly formed corporation. A purchase price was set for the net assets and market values of accounts receivable, inventories, property, plant, and equipment, and accounts payable were obtained. Marion Jones with other investors was able to finance
The valuation process, in this case, requires us to estimate the short-run non-constant growth rate and predict future dividends. Then, we must estimate a constant long-term growth rate at which the firm is expected to grow. Generally, we assume that after a certain point of time, all firms begin to grow at a rather constant rate. Of course, the difficulty in this framework is estimating the short-term growth rate, how long the short-term growth will hold, and the long-term growth rate.
Correct valuation of real assets can present challenges to financial analysts. Different models can be used to arrive at the closest estimate of value and yet certain issues will always arise.
Product: the product is Sally Hansen’s color quick fast dry nail color pen and nail art
An orange object that lays at the bottom of bags and purses. It helps messy people in their time of need. Mothers around the world use this to make their kids more presentable while out for the day. It is like a pen for easy application and to take it around the town. It is as wide as a dry erase marker but it is not as long.
Several internal factors can influence the valuation of a company, however, in the subsequent are some factors that will assist management in protecting its shareholders. The first reason is the desire to generate profits for the company, as a profitable firm will attract investors. Secondly, the need to improve the management of a company can lead to valuation as the information can be used to spur growth. Valuation will assist in understanding some of the factors affecting the value of the company such as client relationships, financials, image, technology employees, and marketing. Proper management is implemented after identifying the issues affecting the organization’s value. Thirdly, communicating to the public accurate and current information is essential in attracting investors and maintaining transparency, which builds the company image.
1. Considering the current state of Clique Pens, a price increase would not be a good idea. Rather, there should be an approach to deploy market development funds to the consumers directly and at the same time benefit the retailers. Clique Pens president Elise Ferguson realizes that at the end of the fiscal year 2013, the company would not be able to achieve one of the company goals, which was to reduce the decrease in gross profit margin by increasing the margin by 4%. The reason for the dropping margin was due to investing in profiting the retailers through off-invoice deals, discounts, and allowances to the retailers. This means that despite the interest in benefiting them, it is apparently clear that this approach was dragging the company down. This is also the reason why Elise thought that any form of profit-driven actions towards the retailers should be in such a manner that the company has control over the sales made through the retailers, i.e., suggested retail. Through market driven funds, retailers would not be considered as the primary stakeholders of the company as this form of market approach was the main culprit behind the dropping profit margin. The market development funds should, therefore, be directed towards the consumers through the retailers. This way, Clique Pens will be directly in control of the product sales and market expansion to the consumers. At the same time, the retailers will be under control by the company contrary to them controlling the sale of Clique Pens’ products to the consumers. Furthermore, the direct control of consumers through market-driven funds were perceived as the better alternatives by Logan Chen and product managers in the department of marketing. However, similar competitors have retailer based market development funds; the consumer-oriented funds of the company should have a highly competitive offer to the retailers. The arrangement between Clique Pens and the retailers should be to increase consumer based sales and profit. Clique Pens should offer the retailers a form of commission strategy, for example; for a certain number of sales made to the consumers by the retailers, the company should award a commission to the retailers. This would increase the shelf
A must-have office accessory, this two-in-one manicure pen by Paladone is an ideal piece for people who do not have the time to take care of themselves. Featuring a ballpoint pen with a fine nib, this pen doubles up as a nail filer to perfectly manicure those busy hands at work. With both buff and shine, this pen is the perfect way to stay focused during meetings or long phone
However, the value of a particular asset may be measured by various ways, such as its historical cost or its market value. It does not means that any one of these measurements is the only one correct measurement. Therefore, if an entity wants to make the financial reports measured accurately and reflect its true position, proper choice of measurements is a crucial segment.
Description: Try and make easy 3D pen pictures at home in order to create different useful things that can be used in daily life. The decorative aspect of these objects can be easily taken care by 3d pens.
Bottom paint is a covering applied to the lowermost point of a ship (hull) so as to get rid of growing organisms that may attach to the boat especially at the lower parts or to protect the metallic parts of the hull from corrosion. This is done to enhance the vessel's performance and sturdiness.
The company said the proceeds were intended for "general corporate purposes" including share buybacks, dividend payments and to fund working capital, capital expenditure, acquisitions and debt repayments
‘The practice of applying paint or other media to a surface, usually with a brush.’ http://www.tate.org.uk/learn/online-resources/glossary/p (Tate, 2014)
Much has been learned from thirty years of mergers. While all mergers set out with the intention of generating value, technology must include an innovation and quality element. The