Cadbury: Porters Five Forces, and PESTEL Analysis

Cadbury: Porters Five Forces, and PESTEL Analysis In order to recommend what strategy is needed for a company to follow is essential to analyze the competitive environment where they operate. When analyzing the competitive environment of Cadbury, the factors that should be considered are both factors from the confectionery industry and factors from the macro environment, which would have an effect on the successful operation of the company. I have chosen Porters Five Forces, and PESTEL analysis. 1.1 Porters Five Forces Bargaining power of buyers: Porter (2008) stated that where the product is a small  fraction of buyers costs or expenditures, buyers are usually less price sensitive. Cadbury has to categories of buyers namely, consumers or retailer. Retail buyers are the group that has the most effect for Cadbury and other confectionery producers. They are mainly large retailers like i.e. Tesco, Asda in UK. There is competition for shelf space and threat of backward integration especially with brand only products. That is a very important group, which is directly correlated with the revenue. It could have high effect. Bargaining power of suppliers: Group that has big impact on the final product, in terms of quality and price. The main commodities used by Cadbury are cocoa, milk, and sugar. Any change in the price of those commodities will affect directly the price of the product and the profitability. Confectionery manufacturers are facing increasing cost pressures as Cocoa prices hit their highest levels for 23 years due to fall in Cocoa production (BBC, 2008). Cadbury is using commodity derivative contracts for cocoa and sugar. Cadbury Cocoa partnership is established to insure sustainable supply of Cocoa by supporting Cocoa farmers in Ghana, India, Indonesia and Caribbean (Cadbury, 2008). Another way perhaps to strengthen their position would be a backward integration, where they would acquire one or more of their suppliers to ensure that they have control over the commodity price (Johnson et al, 2008). Moderate effect. Rivalry among existing competitors: Confectionary is an industry with stiff competition amongst its players. There are five major players competing globally in confectionery industry: Nestle, Mars Wrigley, Cadbury, Ferrero Rocher and Hershey with about 42% share of global market (Cadbury, 2008). All of the major players in the industry have very sound brands worldwide. There is a high growth rate of 5% in the developed countries, and about 10% in the emerging markets, which makes the confectionery industry very attractive. Because of the high competition, there is possibility of competition of prices, which will cause the company to operate with lower margins. High effect. Threat of substitute products: World Health Organization (WHO) (2008) estimates that in 2005 at least 400 million adults worldwide were obese and forecasted that this figure in 2015 will be 700 million. USA, UK, and Germany are among the countries with largest number of people that are obese, overweight, and have cardiovascular health problems on the other hand those countries are the largest confectionery markets in the world. Consumers are becoming more and more aware of healthy eating, so the snacking habits are changing. There are numbers of substitutes emerging on the market, products like cereal bars and fruit bars are threat for the chocolate industry, as health conscious parents especially, would opt for the healthier option. Chocolatiers try to add value to their chocolate, with vitamins or antioxidants or by removing fat and sugar from the confection (Scully, C., 2006). Moreover consumers want firms to avoid e-numbers or synthetic colours and require instead organic substan ces In this regard many people think of the possible health benefits from the chocolate they eat. Consequently a further development will start. Special groups like diabetics or allergy sufferers will rise in importance. (Vreeland, C., 2007). The other main direction in the confection industry is the tendency to pure black and high quality chocolate. Thus, the sweet is turning into a way in which people express their selves. Candy Industry (2006) clarifies this with the headline of one of their reports Dark and Decadent vs. Milk and Mainstream. The statement is underpinned by several data. In 2006 the sales of dark chocolate increased by 40%, every third chocolate released was a dark chocolate and the premium market was foretold to grow over 20% in the next periods. The bitter chocolate has the benefit of a low sugar rate and a lot of antioxidants that makes it much more healthy then normal sweets. A dark chocolate is a bit of luxury at a reasonable price, perhaps thats a reason why this kind of sweet is so popular. The last point which supports the trend is that premium chocolate is for a multilateral use, for instance as a gift or decoration, optimally suitable (Rehan, 2007). The effect is high. Threat of a new entry: as the confectionery market is dominated by well established brands, as sated while analyzing the rivals, and they are Nestle, Mars Wrigley, Cadbury, Ferrero Rocher and Hershey, with 42% of the market (Cadbury, 2008) for a new company is very difficult to enter the market, unless they come up with new interesting product, something to go in line with the healthy lifestyle perhaps, as discussed above. However, it will be difficult to take a considerable market share, as they would be competing against very well established companies, with also established brand names, distribution channels and high capital investment. Other barriers for new entrants are economies of scale and experience of major operators in production and distribution (Johnson, et al 2008). On the other hand those barriers might not be effective for a company that is diversifying, like Nestle, they used their strong position of the confectionery market to enter the ice cream market (Reader, 2 006). The effect on Cadbury is low. 1.2 PESTEL Analysis Political: Only 10 countries in the world produce more than 90% of the worlds cocoa (Worlds Coco Foundation, 2007). The major problem in those countries is poverty. The main concern for the companies trading with those countries is political stability, as instability can have effect on the price, and the supply. Economic: Recent fall in the value of the pound, is one economic factor that affects all the companies that operate in UK, and have business connections with other countries. Cadbury operates in more than 60 countries in the world. Cadbury suppliers of their main commodity cocoa are not British, as outlined above. The depreciation of the pound makes the prices of cocoa more expensive; even though Cadbury had future contracts to hedge against situations like that it will still affect the operation in longer run, when new future contracts need to be made. On the other hand interest rates are very low in England at the moment. The base rate is only 0.5% (Bank of England, 2010). Companies can benefit with lower interest borrowing. Social: Fair trade with cocoa farmers is a social factor, as affects how the company is perceived by the consumers. Fair trade means that a company buys a tone of cocoa at the market price and pays a social premium for the commodity. This benefits the planter because of a steady income stream, which is more independent from the volatility of the market price. Furthermore a company with a fair trade label pays a percentage of the selling price to the centralized fair trade organization. Corporations try to redeem these disadvantages through a higher quality of cocoa beans (Westen, 2006). Furthermore an enterprise could gain a competitive advantage because of their social commitment. The customer can see a fair trade certification on the package and this is becoming more and more important. As outlined above Cadbury operates in more than 60 countries in the world. When a company operates in more than one country potential problems are conflicts between different cultural groups, language difficulties, stereotyping, and mutual misunderstanding (Greenhause, et al, 2010). Technological: Availability of high-tech machinery enables the company to produce high quality product at lower prices, which helps the company to gain competitive advantage. Another point is the widespread of the internet and satellite television, makes it easier to advertise to bigger audience of potential consumers. Environmental: The cocoa plant needs a stable climate. But the ideal conditions in  Africa and South America are in danger because of global warming. The weather will be  unpredictable and natural disasters are possible. Consequently the plants get hurt and the productivity decreases. Moreover disease destroys over 20% of the cacao beans that should be use for chocolate production every year (Ogodo, 2006).Therefore companies should search ways to secure a steady flow of cocoa in the required amount and quality. Cooperation with the World Cocoa Foundation could be a solution. Confectioners like Ferrero, Lindt, Thorntons and Nestle realise this potential and try to improve future expectations (World Cocoa Foundation, 2007) Legal: Affecting the industry are two new legislations that came into force in 2003 in UK. Regulations concerning contaminants in food and organic products force firms to obey and perhaps change their own practices (Baxter, 2006). The company had a very strong financial position with sales revenue growth of 14.6% compared with the previous year, which was due to increase in price, rather than increase in volume of sales, (Bonfield, 2009). Increasing price with no increase in the quality results in higher margins, however it is a very risky strategy to follow as the consumers might not agree with it, the company can lose market share (Johnson, et al 2008). The profit margins have increased from 5.41% in 2007 to 7.43% in 2008, and are higher than the average which stands at 6.42%. That is an indicator of successful cuts in cost. Main reason for that is cutting the number of employees, in 2007 the number of employees was 50,465, and in 2008 was nearly 4000 less down to 46,517. ROCE was nearly doubled in 2008 rising from 3.78% to 7.29%, and was much higher than the average ROCE for the industry, which was 5.53%. This increase in part can be from divestment of Americas Beverages in 2008 during 2008 that had lower R OCE than other companies in the group. According to Cadburys annual report (2008) In July 2008 Company issued new  £350m sterling bond with a coupon of 7.25%and underlying interest rate for Cadbury in 2008 was 6.5%. This means that Cadbury is not producing ROCE much more than its current cost of capital. On the other hand Nestles ROCE is an impressive 21.5% that indicates that the operating costs in UK are much higher, like wages, rent, administrative expenses etc. Current ratio which indicates the companys liquidity is 0.86% for 2008 for Cadbury, which is an improvement from previous year when it was 0.58%. That indicates that their liability has decreased during 2008. Compared to the competitors is obvious that they are not as liquid as Nestle, with current ratio of 1%, however their performance for 2008 compared with the industry average which is 0.72% indicates that they are doing better than the majority. Gering Ratio has decreased from 123.69% to 89.66% in 2008 mostly because of the demerger with the Americas Beverages which was financed by debt. At 2008 their gearing was lower than the average that was 106.6. That is an indicator that if the company needs to borrow, it will not be difficult to find a lender, as they are outperforming the average. Return on shareholders funds is 11.36% nearly doubled compared to year before when it was 6.10%. Nestles return is again much higher at 14.76%. However Cadburys Return on Shareholders funds is again better than the average for the industry which seats at 8.73%. (Weetman, 2006) (Nestle, 2008) (Fame, 2009)(Cadbury, 2009) CORPORATE STRATEGY CURRENTLY BEING PERSUED Vision into action is the name of the strategy pursued by Cadbury. The main outcome of the strategy is to achieve mid teen margins by 2011, alongside with 4-6% organic revenue growth, and improved return on capital employed. If all of that is achieved Cadbury PLC is going to be in an excellent position financially and marketwise, and would deliver outstanding return for their shareholders and become the largest confectionery company in the world. Cadburys priorities stated in the strategy were: growth, efficiency, and capability (Cadbury, 2009). In order to achieve the priorities cost reduction was very important, which resulted in increase in profit by 2.02% the de-merger of US Beverage happened in May 2008, as it was difficult for a British company to compete against American giants such as Coca Cola and Pepsi Co (Market Watch, 2008). And because it was an unrelated diversification from Cadburys main focus on chocolate, gum, and candy. Originally Cadbury wanted to sell the business, as Colley et al. (2002) suggests that a company may not have the time or resources to focus on particular division. Selling the units that lack long term prospects would bring in cash that can be used in what would be considered more advantageous ways. However a lack of interest from cash shy investors forced it to split the business instead. Instead of adding value to the Parent Company, if that given unit adds in management costs, adds to bureaucratic complexity and obscure financial performance, it is not feasible to continue with their oper ation (Johnson et al, 2008). The recent acquisition of Adam business is of immense benefit to Cadbury having gain number two position in gum business. They are focused in Integrating these recent acquisitions for sustainable growth. In order to implement strategy successfully there should be match between strategy and organisational structure. Roquebert et al. (1996) argue that in essence the structure of the organisation and its fit to environment determines the relative degree of profitability. Alfred Chandler (1962) concluded that structure follows strategy. New group structure of seven business units instead of four was introduced and de-layering organization for faster decision making and reduction in administrative cost. Strategic business unit is a part of an organization for which there is a distinct external market for goods or services that is different from another strategic business unit SBU (Johnson et al, 2008). The definition for SBU by CIMA, (2006) adds that SBU has a significant degree of autonomy, typically being responsible for developing and marketing their own product. In the case of Cadbury there is no evidence that shows these business units will have any autonomy in developing their own m arkets and products. Alongside what I have mentioned several other activities had been carried out in order to implement the strategy, such as the reconfiguration of production in Australia and New Zealand to reduce complexity of production, ant the closure of the nonperforming plants i.e. Barcelona and Turkey Gum plants and Somerdale Chocolate plant (Cadbury, 2009). Cadbury is a large company that only concentrates in one industry. In a study carried out by Schmalensee in 1985 was found that the industry effect is very significant and accounts for at least 75% of the variance of industry rates of return on assets, which is directly correlated with the profit of the firm. He also found that market share effects exist it share has positive relation with profitability but its effect is negligible and industry and market share affects are negatively correlated. Within the industry this is competitive advantage that accounts for profitability of company. Cadbury at the moment does not have competitive advantage over its rivals. Profit target set for 2013 that is operating margin of 16%-18% (11.9%for 2008) shows that understanding this fact managers are trying to gain competitive advantage over other global players by focusing on performance and increasing profit (Hill and Jones, 2007). RECOMMENDATION Based on the findings regarding the competitive environment where the company operates, and on Cadburys financial performance and current strategy, l can give recommendations for a strategy to be followed, supported by a Balanced Scored Card provided in Appendix 1. The main goal as it was outlined in the existing strategy is Increase in Shareholders Value. For the goal to be achieved every department in the Company should be involved. I will explain the implementation of the strategy starting from implementation in the process of learning and growth, than the implementation across the internal processes, followed by what would the strategy mean to the customers, finishing with how will the strategy affect the financial perspective. In order for a company to be successful the most important asset are the employees. Very important part of any strategy is how happy the employees are? Are they driving the business towards the goal set by the management? In order to achieve the points made is very important that the team fully understands the strategy and the underlying assumptions. The employees should work as a team with a successful communication between them, which contributes to faster decision making. For best results Cadbury should employ and retain high performers, for example high performing managers, or specialists in the field of RD. Once those employees are on board is very important to retain them, by appropriate pay, safe conditions, training and development to achieve their full potential. After the Kraft take over, and numerous job cuts, the team morale is low (BBC, March 2010), and it is very important that they get the support needed, and understand the big picture. Another crucial area of successes is investing in RD. As outlined by the analysis using the Porter Five Forces, there is a threat of substitutes, to develop products in line with the changing consumer habits (WHO, 2008) healthier variety of snacks should be introduced. Consumers are becoming more health concern, and are happy to pay higher price for a good quality, example of that is Innocent, focused on healthy food and drink, 100% smoothies, packed fruits and vegetables, which in the nine years they exist has grown from just a three employees to 268, and is one of the fastest growing companies with revenue of over 120 million pounds (Innocent, 2009). As explained by Ansoffs Matrix possible growth opportunities are found in this particular case by introducing new products in already existing markets (Richardson, et al, 2007). I think that Cadbury PLC should be one step ahead and introduce similar products as well. However, introducing new products is very costly and it will relate i n lower growth prospects. There are two factors that the power of substitutes depends on: Relative Price/Performance; and The extent of switching costs (CIMA, 2007). By using Porters Five Force was found that the competition in the confectionery industry is fierce; in order for Cadbury to maintain their market share, or better to enlarge it, constant improvements of the products should be maintained. Black and Green line should be developed further, as the demand for dark chocolate is growing (Rehan, 2007). As Porter (1980) says the goal of a competitive strategy for a company is to find a position in its industry where these competitive forces, will do it the most good or the least harm The Cadburys brand is large and global. Kraft had done a lot of acquisitions in the past where the brand has been kept intact like Jacobs Coffee in Germany. The company should continue that with the Cadbury Brand, as that is key to success. In the long run that will result in improved sales revenues , and better profit margins. In the Balanced Score Card I have outlined that Cadbury should be environmentally friendly. Ogogdo, (2006) had pointed that there is a threat to the cocoa trees in the long run, by the global warming. Cadbury should do their part and be involved in projects helping the environment, like using fair trade, or following their competitors examples. Nestle USA is helping to safeguard the environment through pollution prevention and control, energy conservation and recycling/solid waste management practices (Nestle Global, 2010). Entering new markets is a way of driving the business forward. By acquiring Cadbury, Kraft had positioned themselves on the Indian market where Cadbury has a very strong position, on the other hand Kraft can help Cadbury to penetrate the Chinese market, where they have a solid position, and use their distribution channels (Riches, 2010). Being global as refered to in the PESTEL analysis comes with its negative sides. To overcome that Cadbury should work towards minimizing conflicts and have procedures in place to supplement the strategy. Even though the current liabilities had decreased from the year before, there are still high. Restructuring the debt to a lower interest loan, would result in substantial savings. The interest debt on the existing debt is 6.5% (Cadbury, 2009). As outlined from the financial analysis, the performance had been stronger year after year, where almost all of the ratios had improved. If all the recommendations outlined above are followed the financial performance can only get stronger. When all standards are met for quality and the product meet and exceed customer expectations, there are possibilities for higher margins and increase in profit. On the other hand when the profits increase after interest and tax, the shareholders return would increase as well, which makes the final goal achieved increase in shareholder value. Market Watch Drinks; Apr2008, Vol. 7 Issue 4, p14-14, 1p Porter, M. E., (1980), Industry Structure and Competitive Strategy: Keys to Profitability, Financial Analysis Journal, Vol. 36, Issue 4, p30-41, 12p Strategy in Action Applying Ansoffs Matrix.Full Text Available By: Richardson, Mark; Evans, Carl. Manager: British Journal of Administrative Management, Summer2007, Issue 59, pi-iii, 3p

Allowing Cloning Essay -- Persuasive Argumentative Essays Science

Allowing Cloning In earlier times the subject of cloning human beings has been no more than just a fantastic idea to play around with in science-fiction books and movies. As time progresses though, more and more fantasies become realities. Such is the case with cloning. What has only been dreamt up before by artists on pen and paper can now be performed by scientists in laboratories. With the ability to clone humans now possible the question of whether such an act should even be carried out is raised. How far should cloning be allowed to go if it should even be allowed at all? The answer is that cloning should be allowed, but only in moderation. Currently Congress is debating on a bill on whether or not cloning should be banned outright. If this bill were to pass then the scientific community will have a huge blow dealt against it. Human cloning techniques should not be completely banned because they have the potential of revealing new ways to cure currently incurable diseases and ailments. In the article ?Human Cloning is good for All of Us,? Patrick Stephens writes that ?regulations will delay the availability of medical technologies that cloning and genetic research are bound to bring.? Even though Stephens presents a true possibility he only sees one side of the argument and fails to examine what unchecked cloning could result in. There are those on that oppose Stephens? views completely and would prefer to have the ban on cloning passed by Congress. The result that those people want may be a little extreme, but they seem to be doing it for the right reasons. As mentioned before, cloning has been used as a subject in many science-fiction stores and in most of those cloning has ended up bringing about a ... ... and researched before human clones are produced. We need to learn everything we can about it before we pass judgment. A ban would only prevent us as a society from exploring another possibility that would further separate us from the wild animals and allow us to make a more distinct mark as human beings. Works Cited ?Stop Cloning Now,? The Interim. February 2003. http://www.lifesite.net/interim/2003/feb/04editorials.html Stephens, Patrick. ?Human Cloning is Good for All of Us,? The Objectivist Center. April 3, 2001. http://www.objectivistcenter.org/articles/pstephens_human-cloning-good.asp ?Ten Reasons to Support the Brownback/Landrieu Cloning Ban,? Americans to Ban Cloning. http://cloninginformation.org/info/talking_points.htm Binswanger, Harry. ?Immoral to Ban Human Cloning,? Religion vs. Morality. http://religion.aynrand.org/cloning.html Allowing Cloning Essay -- Persuasive Argumentative Essays Science Allowing Cloning In earlier times the subject of cloning human beings has been no more than just a fantastic idea to play around with in science-fiction books and movies. As time progresses though, more and more fantasies become realities. Such is the case with cloning. What has only been dreamt up before by artists on pen and paper can now be performed by scientists in laboratories. With the ability to clone humans now possible the question of whether such an act should even be carried out is raised. How far should cloning be allowed to go if it should even be allowed at all? The answer is that cloning should be allowed, but only in moderation. Currently Congress is debating on a bill on whether or not cloning should be banned outright. If this bill were to pass then the scientific community will have a huge blow dealt against it. Human cloning techniques should not be completely banned because they have the potential of revealing new ways to cure currently incurable diseases and ailments. In the article ?Human Cloning is good for All of Us,? Patrick Stephens writes that ?regulations will delay the availability of medical technologies that cloning and genetic research are bound to bring.? Even though Stephens presents a true possibility he only sees one side of the argument and fails to examine what unchecked cloning could result in. There are those on that oppose Stephens? views completely and would prefer to have the ban on cloning passed by Congress. The result that those people want may be a little extreme, but they seem to be doing it for the right reasons. As mentioned before, cloning has been used as a subject in many science-fiction stores and in most of those cloning has ended up bringing about a ... ... and researched before human clones are produced. We need to learn everything we can about it before we pass judgment. A ban would only prevent us as a society from exploring another possibility that would further separate us from the wild animals and allow us to make a more distinct mark as human beings. Works Cited ?Stop Cloning Now,? The Interim. February 2003. http://www.lifesite.net/interim/2003/feb/04editorials.html Stephens, Patrick. ?Human Cloning is Good for All of Us,? The Objectivist Center. April 3, 2001. http://www.objectivistcenter.org/articles/pstephens_human-cloning-good.asp ?Ten Reasons to Support the Brownback/Landrieu Cloning Ban,? Americans to Ban Cloning. http://cloninginformation.org/info/talking_points.htm Binswanger, Harry. ?Immoral to Ban Human Cloning,? Religion vs. Morality. http://religion.aynrand.org/cloning.html

Explication Essay: Paradise Lost

Paige Gardner Julia Naviaux ENG 230: 003 February 1, 2013 Explication Essay: Paradise Lost- Lines 80-134 The debate of free will versus predestination is a very common, prevalent topic in any Q&A session or even religious sermon. The controversial issue of whether God has predestined His people for salvation or if God has given people the freedom in making their independent choice to do so is a question theologians will never solve. Many church congregations have lost members due to the church’s opinion on this topic.John Milton, English poet, used his epic poem Paradise Lost to present the story of the Fall of Adam and Eve in a way people of his time, seventeenth century, had never been exposed to. Throughout the story, we are enthralled with the revengeful attributes of Satan and the loving, forgiving, and even punishable attributes of God. Milton doesn’t present the character God until Book 3. In lines 80-134, Milton presents his audience with the idea of predestinat ion and free will from God’s own point of view through a conversation between his characters: God and the Son.God expresses to His son the difference of knowing what will happen and predestining what will happen. In Paradise Lost, Milton uses the literary elements of repetition and sentence structure to reveal the truth of free will to his readers. Milton uses repetition to demonstrate to his readers the difference between knowing what will happen versus having a predetermined, influential stance on something. Milton uses the possessive pronoun ‘their’ to stress the importance on the matter of the people possessing something or something being a part of their possessions.For example, â€Å"their maker, or their making, or their fate† illustrates this concept in the epic poem (Milton, Book III, line 113). Here, Milton expresses how if people have free will they can no longer claim these things because they are a part of the human race and therefore possess human nature. From this, people have a maker who made them into the people they are today. Therefore, people are made with free will and cannot blame their maker for their own fate because people do not determine it alone. These three facets, in a way, intertwine with one another.People cannot blame one without the other two or vice versa. People’s fate is part of their making and people’s making is part of their maker, hence the possessive pronoun ‘their’. Milton says predestination â€Å"over-rul’d their will† (Milton, Book III, lines 114-115). Now the freedom is taken away. Everything is already determined and no choices will need to be made. In lines 116-118, Milton gives his returning argument against predestination by saying, â€Å"they themselves decreed their own revolt, not I: if I foreknew, foreknowledge had no influence on their fault†.Milton states here his stance on free will. God may know what will happen, but he is not i nfluencing people’s decisions. He allows people to make them on our own. As well as repetition, Milton also uses sentence structure to relay to the readers the theme of his epic poem. In book III, lines 129-134, Milton uses three different colons in one sentence to make the reader realize that one point leads to the next. Colons in grammar are used to demonstrate lists.Milton does this by stating, â€Å"The first sort by their own suggestion fell, self-tempted, self-depraved: Man falls deceived by the other first: Man therefore shall find grace, the other none: in mercy and justice both, through Heaven and Earth, so shall my glory excel, but Mercy first and last shall brightest shine. †. Milton concludes this conversation between God and the Son with these lines. Milton utilizes the colons to express that these events would not happen without the preceding event occurring. Without sin or impurity, mankind is in no need of grace or mercy. Through these imperfections, th e Lord is praised by his people.Humans are corrupt as people and tempted by each other. Satan, in the Garden of Eden, tempted Eve and Eve tempted Adam; mankind was self-tempted. Man fell because of his fellow man. Through mercy and grace, the Lord is glorified and his mercy outshines everything. By God offering his grace and mercy to mankind, He reveals His giving nature. He is offering mankind grace and mercy to be saved, but He not forcing it upon them. Through the free will God gave us, people can worship him with sincerity and genuine love. Sincerity people would not have if he predestined them. Milton is driving this point home in this section of his epic poem.God’s love and mercy is everlasting, and Milton says it will prevail through everything. The debate between free will and predestination will always be present. Regardless how many theologians research it and search scriptures for answers, this debate will always exist. There are some things the Lord does not revea l to His people so they are able to step out in faith and trust in Him. By using repetition and sentence structure, Milton expresses the view of free will from God’s perspective. Through Paradise Lost, Milton shows us a glimpse of what the wonderful Gospel of Christ truly is.

Finance 550 - 9571 Words

Practice Exam Questions and Answers 1. The Widget Co. purchased new machinery three years ago for $4 million. The machinery can be sold to the Roman Co. today for $2 million. The Widget Co.s current balance sheet shows net fixed assets of $2,500,000, current liabilities of $1,375,000, and net working capital of $725,000. If all the current assets were liquidated today, the company would receive $1.9 million in cash. The book value of the Widget Co.s assets today is _____ and the market value of those assets is _____. A. $4,600,000; $3,900,000 B. $4,600,000; $3,125,000 C. $5,000,000; $3,125,000 D. $5,000,000; $3,900,000 E. $6,500,000; $3,900,000 Book value = ($725,000 + $1,375,000) + $2,500,000 = $4,600,000 Market value = $1,900,000†¦show more content†¦good reputation of the company C. equipment owned by the firm D. money due from a customer E. an item held by the firm for future sale Refer to section 2.1 AACSB: N/A Blooms: Comprehension Difficulty: Intermediate Learning Objective: 2-2 and 2-4 Ross - Chapter 02 #15 Section: 2.2 and 2.4 Topic: Depreciation 10. Which one of the following statements concerning net working capital is correct? A. The lower the value of net working capital the greater the ability of a firm to meet its current obligations. B. An increase in net working capital must also increase current assets. C. Net working capital increases when inventory is sold for cash at a profit. D. Firms with equal amounts of net working capital are also equally liquid. E. Net working capital is a part of the operating cash flow. Refer to section 2.1 AACSB: N/A Blooms: Comprehension Difficulty: Intermediate Learning Objective: 2-2 and 2-4 Ross - Chapter 02 #19 Section: 2.2 and 2.4 Topic: Income statement 11. The higher the degree of financial leverage employed by a firm, the: A. higher the probability that the firm will encounter financial distress. B. lower the amount of debt incurred. C. less debt a firm has per dollar of total assets. D. higher the number of outstanding shares of stock. E. lower the balance in accounts payable. Refer to section 2.1 AACSB: N/A Blooms: Knowledge Difficulty: Basic Learning Objective: 2-4 Ross - Chapter 02 #24 Section: 2.4 Topic: Cash flow fromShow MoreRelatedEssay Mt480 Corporate Finance Unit 9 Project1159 Words   |  5 PagesStudent MT480-01: Corporate Finance Unit Nine: Assignment Date Assignment: Complete the following exercises and problems from the textbook. Some problems ask multiple questions; be sure to answer every part of the exercise or problem unless otherwise noted * Chapter 28: Practice Questions 2, 10, 11, and 13 * Chapter 34: Practice Questions 2, 3, and 7 Chapter 28: 2. Table 28.1 shows the 90-day forward rate on the South African rand. a. Is the dollar at a forward discountRead MorePanera Bread Case779 Words   |  4 Pagesappropriate as the company did not want to pack on so much debt, and could in the later years possibly lower the plowback amount and instead distribute dividends if necessary. Since the company is still vastly growing and is in need of sources to finance the growth, we would recommend keep reinvesting all of net income back into the company. Taking out long-term debt would make sense for Panera. Given the fact that their goal is to continue their long-term growth, a long-term note payable wouldRead MoreWhy Do Firms Choose Their Capital Structure?1623 Words   |  7 Pages1. Introduction In order to grow, an enterprise needs investments. So they need to start wondering about which securities to acquire and how to finance those investments: with equity, debt or a combination of both (Myers, 2001). The study of capital structure tries to clarify this variety of securities and financing opportunities. In accounting terms, this decision is situated on the right-hand side of the balance sheet (Myers, 2001). In his Capital Structure Puzzle article, Myers (1984) poses theRead MoreCapsim Strategy Essay859 Words   |  4 Pagesinnovative market leaders.   Specifically, this upcoming year we will be investing between $350- $400 dollars in the Traditional segment, between $650 and $700 in the Low End segment, between $900 and $950 in the High End segment, between $500 and $550 in the Performance segment, and lastly between $350 and $400 in the size segment.    In order for our strategy to be effective, our optimal timing for planned investments will be when demand is predicted to be high.   Hence, we will increase ourRead MoreFunding Programs For Public Schools1400 Words   |  6 PagesIt is a common belief that students will perform better in a well-funded school. The National Report Card (NRC) examines the finance systems of all 50 states in the nation measuring how schools are funded based on four different categories: funding level, funding distribution, effort and coverage. â€Å"A fair funding system is one that provides a sufficient level of funding distributed to account for the additional needs† of the various populations, ensuring that all students have an equal and adequateRead More1An Agency Problem Is Prone To1175 Words   |  5 Pagesin a year is called the:  A.  annual percentage rate.   6.  A $1,000 face value bond quoted as 102.16 sells for _____ and a bond quoted as 99:08 sells for _____.   B.  $1,021.60; $992.50 7.  Trevors Tires is offering a set of 4 premium tires on sale for $550. The credit terms are 24 months at $20 per month. What is the interest rate on this offer?  B.  12.74 percent8.  Karen has $16,000 that she wants to invest for 1 year. She can invest this amount at The North Bank and earn 5.50 percent simple interest.Read MoreFactoring: Alternative Model of Financing8080 Words   |  33 Pagesreceivables company B—debtor–importer executes payment on account of factor (2); 6. Factor transfer funds to the account of factor (1); 7. Factor (1) pays a company A—seller–exporter difference (e.g. 20%) funds minus the factoring interest rate used to finance the amount payable on the advance. ECONOMIC ROLE OF FATORING Factoring as advanced financial instrument provides simple and efficient financing and successful business activities with domestic and foreign companies. It represents effective andRead MoreCase Study Chase’s Strategy for Syndicating the Hong Kong Disneyland Loan2763 Words   |  12 PagesSyndicating the Hong Kong Disneyland Loan Analysts: Bian Min, Luo Min, Wang Hongyu, Zhu Haidong Syndicated loan, with two or more bank lenders and a single set of legal documents, have gained tremendous popularity among corporations to finance their projects. This report aimed at evaluating the process by which Chase Manhattan Bank (â€Å"Chase†) syndicated the HK$3.3 billion Hong Kong Disneyland financing. To begin with, a detailed analysis of the first-round bidding concerns will be providedRead MoreInternational Business Competing in the Global Marketplace 8th Edition Charles W. L. Hill5106 Words   |  21 PagesSeries in Finance Alexander/Sharpe/Bailey Geisst Fundamentals of Investments Megginson Investment Banking in the Financial System Andersen Corporate Finance Theory Melvin Global Derivatives: A Strategic Risk Management Perspective Bear/Moldonado-Bear Gitman International Money and Finance Principles of Managerial Finance* Principles of Managerial Finance–– Brief Edition* Mishkin/Eakins Financial Markets and Institutions Free Markets, Finance, Ethics,Read MoreChases Strategy for Syndicating the Hong Kong Disneyland Loan 2017 Words   |  9 PagesADVANCED CORPORATE FINANCE Chase’s Strategy for Syndicating the Hong Kong Disneyland Loan Group 1 AFNONIN, Artem 3035162144; ARDERN, Jeffrey 3035160914; GUPTA, Agrata 3035161097; KUTUZOVA, Ekaterina 3035162156; Disneyland - Chase Case Study Q1: How should Chase have bid in the first round competition to lead the HK$3.3 billion Disneyland financing? After being approached by Disney to raise HK$3.3 billion nonrecourse loan package on a fully underwritten basis, Chase had three options available