Preview

Identify the Strengths and Weaknesses of Komatsu and

Satisfactory Essays
Open Document
Open Document
348 Words
Grammar
Grammar
Plagiarism
Plagiarism
Writing
Writing
Score
Score
Identify the Strengths and Weaknesses of Komatsu and
Identify the strengths and weaknesses of Komatsu and Caterpillar's other major competitors. One of the major strengths of Komatsu is the fact that the company has been able to maintain a better relationship with blue- collar workers in its North American factories. In addition, its per- unit labor costs are lower than Caterpillars. Komatsu enjoys a strong brand presence and its logo is recognized the worldover as a sign of quality, innovation and service. Sika has a high degree of brand awareness particularly as a logo. This has enabled the company to place high value on consistent and standardized use of the logo. Customers are ensured of receiving high quality and service wherever the Sika logo appears. The Sika brand as well as 614 additional trademarks such as Sikaflex, Sika ViscoCrete or SikaBond provide a market advantage to the company. The strong brand-image of the company enables it to distinguish the product from its competitors. In addition, the company’s brand lends its products a positive value perception and retains the confidence of its customer High Dependency on Construction Segment
The company is generating a major part of its revenues from the construction segment. This segment accounted for 80% of total revenue of the company in year 2008.. The company’s high dependency on construction segment may expose it to business risk. If the demand for the products and services of the segment decline, then the revenues of the company may be adversely affected.
Poor Operating Margin
During the fiscal year 2008, Sika recorded a poor operational performance. The operating profit of the company was CHF 422.0 million during the fiscal year 2008, a decrease of 17.4% over 2007. The operating margin declined from 11.1% in 2007 to 9.1% in 2008. The decline in operating margin was due to increase in operating expenses by 3.5%. Further, the massive, short-term increase in raw material prices affected the profitability. The poor operational performance reveals the
Continue Reading
View Writing Issues

You May Also Find These Documents Helpful

  • Good Essays

    Cost Accounting Cc2 Unit 2
    • 2988 Words
    • 12 Pages

    Cost Accounting Cc2 Unit 2

    Operating cash flow before working capital changes has largely fluctuated, increasing to a peak in 2006 and falling again. The highest point can be observed in 2008. Finance costs have decreased in 2008 by almost half. Stores and stocks increase at a steady rate but show a spike in 2008. Trade debts reach a peak in 2006 and then fluctuate. Other receivables, however, show an increase. Net cash from operating activities shows a peak in 2006. The greatest addition to plant, property and equipment is witnessed in 2008. Net cash used in investing activities reaches a peak t 2008. Net cash used in financing activities shows an upward trend with a peak in 2008. Cash and cash equivalents show a peak in 2008, with a smaller peak in 2006. *CC5 FIVE-YEAR GROWTH RATES Sales and net-income have increased over the years but the per-share results are different because the number of shares goes up considerably in 2008, reducing per-share values and making growth rates negative. No dividends were paid in the first two years and as a result, the growth in dividends per share has been 100%. Equity per share has shown a growth over the years. Issuing more shares has resulted in lower sales and net income per share. The negative effect is especially felt on net income per share. This is not a good sign for the company, as it will negatively affect share prices financial markets. Financing the expansion in 2008 with a growth in equity seems to have been an unreasonable…

    • 2988 Words
    • 12 Pages
    Good Essays
    Read More
  • Satisfactory Essays

    3220 Unit 5 complete
    • 1433 Words
    • 5 Pages

    3220 Unit 5 complete

    Further, issues had faced by the company because of financial crisis which might expected to come after 2000 (Rosenberg, 2003). It was also expected that a recession could be seen in 2001. These associated factors of this situation had increased taxes and operational amount for the company. The premium which usually paid by policymakers, were also insufficient to reduce the impact of the economic downturn for the company which considerably due to the cost of claims and operating expenses (Banerjee, 2002). However, lower interest rates for the company’s where had to sell first insurances with less benefits and loss impacted the company. Lastly, company had come to critical situation with the dramatic downturn in its stock portfolio.…

    • 1433 Words
    • 5 Pages
    Satisfactory Essays
    Read More
  • Good Essays

    XACC/280 Financial Analysis: Pepsico
    • 1114 Words
    • 5 Pages

    XACC/280 Financial Analysis: Pepsico

    To any company whether small or a large corporation, the financial analysis is very important in order for a successful business. This will determine if the company is healthy enough to invest or even to see where you are weak in the financial part of the business. It is the company’s responsibility to present accurate analysis of their financial reports. What I hope to present to you is information that you will help see the comparison of both companies within their financial standings. In this report I will present a vertical analysis and a horizontal analysis, and ratio analysis. I will also try to provide some strategies…

    • 1114 Words
    • 5 Pages
    Good Essays
    Read More
  • Good Essays

    Audit Case Study Walgreens
    • 4465 Words
    • 18 Pages

    Audit Case Study Walgreens

    Client's business is with the risk of the entity not being profitable and not continuing to survive. There could be going-concern issues, inflated profit goals, or operations in volatile industries that can impact an entity's risk (Colbert, 1996). Most business risks will eventually have financial consequences and, therefore, an effect on the financial statements. Financial trends commonly represent the most important part of client's business risk. Audit firms cannot control the amount of client's business risk. They can only assess it and decide whether or not to accept the risk.…

    • 4465 Words
    • 18 Pages
    Good Essays
    Read More
  • Satisfactory Essays

    strong tie
    • 627 Words
    • 3 Pages

    strong tie

    This case study is about a manufacturing company that designs, customize, and manufacture connector that are used to reinforce wood joins for construction purposes. The company has a good reputation in the industry and among construction professional for its customized products, and is consider one of the leading companies in the industry by enjoying a 60 per cent market share, which had fallen from 70 per cent in recent years; however, since 2006 to 2008, the company has seen its net income fall from $1456 to $7, which have raised concerns about the overall performance of the company among its executives. After analyzing the company’s finances, I have concluded that there are three main reasons for company’s low performance: Poor investment management, competition in the industry, and low demand due to recession.…

    • 627 Words
    • 3 Pages
    Satisfactory Essays
    Read More
  • Powerful Essays

    Accouting
    • 2195 Words
    • 9 Pages

    Accouting

    Although the sales for both entities experienced an increase, Profit Margins are all decreased over the two years.The ratios for Oroton in both years is 20.5 cents and 22.2 cents respectively.The slightly drop is owing to the increasing cost of sales and operating expense. However, Oroton performed well under the difficult trading condition .Compared with Oroton,Country Road has a quite large sales reached up to 419812 million dollars due to the company strategy which was developing the new market and closed unprofitable stores but the profit is disproportionate smaller(21058M) and result in the profit margin are ony 5 cents and 5.7 cents over the two years.This indicates that the expenditure in the entity does not cost effectively .…

    • 2195 Words
    • 9 Pages
    Powerful Essays
    Read More
  • Powerful Essays

    Financial Case Analysis: Star River
    • 2335 Words
    • 10 Pages

    Financial Case Analysis: Star River

    Initial Assessment: An initial look at the ratio analysis reveals that the annual sales-growth rate has been holding around 15%. This is perhaps the only good news from the analysis. A performance discontinuity makes its appearance in FY 2000 as a drop in operating margin. This was a result of a 21% increase in production costs and expenses and a 20% increase in admin and selling expenses. There was also an inexplicable 95% increase in inventory. This jump in inventory and operating expenses appears to have been financed through debt, as the debt/equity and debt/total capital ratios increased during this period. Since the sales growth rate has held steady, there has been…

    • 2335 Words
    • 10 Pages
    Powerful Essays
    Read More
  • Good Essays

    Riordan Manufacturing Ratio Analysis
    • 693 Words
    • 3 Pages

    Riordan Manufacturing Ratio Analysis

    The analysis for 2011, the company had 1.62 times and for 2010 it had 1.66 times. This means the company is making good use of assets to generate revenue. For profit margin, the company’s profitability increased slightly from 4.30% to 4.97%. Return on assets, which measures the efficiency of a business in using its assets to generate net income increased from 7.16% to 8.05%. Return on common stockholders’ equity increased by 3.02% from 2010 to 2011 that indicates the company has enough money to pay common shares, dividends, and retain funds for business growth.Profitability Ratio is very important information for Investors, customers, managers, andgovernmental…

    • 693 Words
    • 3 Pages
    Good Essays
    Read More
  • Powerful Essays

    Home Depot Business Analysis
    • 2973 Words
    • 12 Pages

    Home Depot Business Analysis

    When the housing market boomed, so did construction companies and building material suppliers. Every aspect of construction had an increase in demand from development companies looking for a large supply of building materials, and from a large consumer group of new homeowners. As a result, a company such as The Home Depot was able to capitalize from the success of the construction and home improvement markets. Unfortunately, the downturn in the economy is truly affecting Home Depot 's revenue. However, evaluating market conditions and market trends will help provide the company with the needed data to help predict the future market of Home Depot and suggestions to consider in order to overcome the economic challenges of the upcoming months.…

    • 2973 Words
    • 12 Pages
    Powerful Essays
    Read More
  • Good Essays

    Clarkson Lumber
    • 880 Words
    • 10 Pages

    Clarkson Lumber

    In order to examine operational performance of Clarkson Lumber Company, we calculated financial ratios for years 1993 to 1996 first quarter. In addition, to make a meaningful comparison, we calculated financial ratio for industry. Industry averages were calculated by taking arithmetic average of high-profit and low-profit outlets, then we calculated ratios. Financial ratios of Clarkson Lumber and industry averages can be seen in Exhibit 1. First of all, regarding current ratio, it has sharply declining trend, especially after year 1993, current ratios are below industry average. Even in 1995, current ratio is far below than the low-profit outlet’s current ratio. The quick ratio measures a company’s ability to meet its short-term obligations with its most liquid assets. When we focus on quick ratios of Clarkson, we also see declining trend in quick ratio, which shows that Clarkson is having harder and harder times to meet its current liabilities by using current assets. Overall, liquidity position of company seems to be weak. As for asset management ratios, first ratio to be discussed is inventory turnover ratio. Inventory turnover ratio measures how many times average inventory is "turned" or sold during a period. We noticed that after year 1993, inventory turnover ratio is below industry and is has also declining trend. DSO shows average number of day after making a sale before receiving cash. When we compare it to industry average (48 days), one may notice that Clarkson is doing (49 days) near to industry. As for FA Turnover and TA Turnover ratios, Clarkson have ratios above industry. Yet, these ratios are decreasing through years which may be a threat for future of the…

    • 880 Words
    • 10 Pages
    Good Essays
    Read More
  • Good Essays

    Coffeeville Risk Analysis
    • 742 Words
    • 3 Pages

    Coffeeville Risk Analysis

    The scope of this Risk Analysis Report is to examine the likelihood and all the possible consequences of the risks identified by using all the information gathered through research in Assessment Task 1, as well as the given simulated business information provided on this task. This report shows the risks identified according to priority and urgency. It also includes different options that are carefully picked and assessed according to how much it would most address the risk identified.…

    • 742 Words
    • 3 Pages
    Good Essays
    Read More
  • Good Essays

    Pinnacle Manufacturing Part I C F G H
    • 1143 Words
    • 5 Pages

    Pinnacle Manufacturing Part I C F G H

    Gross Profit Margins have declined from 29.51% in 2009 to 27.5% in 2011. This ratio is helpful analytically to indicate that possible misstatements might exist in the areas of sales, COGS, A/R and inventory. As noted above there is already a negative trend in inventory for the Company. Similarly, Profit Margin for the Company has declined from 3.77% to 2.84% between 2009 and 2011. A decline in profit…

    • 1143 Words
    • 5 Pages
    Good Essays
    Read More
  • Good Essays

    Superior Manufacturing Case
    • 473 Words
    • 2 Pages

    Superior Manufacturing Case

    As we know from the case, the Superior is implementing the standard cost system which was introduced in early 2005---“Next year’s standard costs were last year’s actual per unit costs adjusted for anticipated cost changes”. By looking at Exhibit 2 and Exhibit 4, we could compare the level of all the costs under the items. The applicable way is to focus on “Variances” which indicate the degrees of changes of all the direct and indirect costs between 2004 & 2005. In addition, the mark of “+” indicates favorable and positive improvement and the mark of “-“indicates unfavorable and negative declines. Therefore, we could obviously observe the major changes in the company are mainly Rent (+259), Indirect Labor (+213) and Depreciation (+642), others factors remain comparatively small different from last years. We could thus conclude that these 3 factors are the main reasons that enabled Superior to improve profitability.…

    • 473 Words
    • 2 Pages
    Good Essays
    Read More
  • Satisfactory Essays

    Adventures Assignment 1
    • 899 Words
    • 4 Pages

    Adventures Assignment 1

    * IVK statements show that the company has grown recently; however, it was not well planned and that is showing in the huge increase in the operating expenses. This growth was not done efficiently which lead to the decrease in net income despite the increase in total service revenue.…

    • 899 Words
    • 4 Pages
    Satisfactory Essays
    Read More
  • Good Essays

    Report on Analysis of Next Plc
    • 1551 Words
    • 7 Pages

    Report on Analysis of Next Plc

    It is seen that there is slightly decrease in roce could mainly attributable to the fall in asset turnover by 0.62 times. But the group had improved their operating margin of 0.22 % from 17.13% to 17.35 % . It can be said that the group has done a good job to increase its margin in the reporting period, as there were many external challenge which could affect the operationg profit margin. The weakness of sterling pounce was a great challenge to the company, as it is decline by 10cents to the US dollar. Besides that, the revenue has increase 4.35 % because of the soaring cotton prices have push the clothing prices up since the beginning of the year. This cause the average selling price rise 7 %. Base on the trading statement issued by next plc, Next brand sales for the first half year were up 4.5% against last year. It indicated next plc may generate a higher profit coming this year.…

    • 1551 Words
    • 7 Pages
    Good Essays
    Read More

Related Topics