Cango Week 4

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  • Topic: Ethics, Want, Mezzanine capital
  • Pages : 2 (440 words )
  • Download(s) : 368
  • Published : February 15, 2012
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One problem facing Cango is a lack of strategic goals. With a weak mission statement the goals of the company are not clearly stated. This leads to employees not having a compass for the company and instead following their own opinions on what is a proper direction for the company to take. In addition the unclear code of ethics can lead to major problems down the road. A code of ethics is used to promote high standards and define accepted behaviors. A mission statement can guide a company in good times and bad. A meaningful mission can act as a moral and corporate guide. It can help employees make decisions aligning with your values and goals. In addition the unclear code of ethics can lead to major problems down the road.

In order to address these issues a detailed mission statement needs to be created and a code of ethics needs to be implemented. Since the mission statement is the overall purpose of the company it should be created first. It should clearly define what the company does, for whom it is done and the benefit. A great way to start brainstorming a mission statement is to ask three key questions, 1) Who are we? 2) who do we want to be? And 3) How do we put it together in one sentence? Once Cango has a working mission statement a code of ethics needs to be created and implemented. First it needs to be decided if the code of ethics will be guide, or if they will be strict requirements, and if so, how it is to be enforced. Once those questions have been answered the code of ethics can be written specific for Cango.

Another problem facing Cango is the fact that their financial standing is precarious. Cango has a debt to equity of $1.30. To elaborate debt to equity ratio greater then one means the company assets are mainly financed with debt. By having a high ratio it means that Cango is in a risky position, especially with interest rates rising.

The best thing that Cango can do to lower their debt to equity is to do a buyback. In...
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