Case 1 Signal Cable Company

Powerful Essays
Case 1: Signal Cable Company

Introduction

The Signal Cable Company, located in Tarrytown NY, is a cable manufacturer for analog and digital interconnects, speaker, video and home theater cables. The company is well known for “highest standard in quality and customer service” and their “superior design” and “No-Hype approach resulted in one of the best price/performance ratio in the industry” (www.signalcable.com).

After a steady growth over the last few years, the management decided to enter in the fiber optics business. The market was growing, the demand increased and the competition was not too severe. Thus the company established two additional manufacturing facilities and increased its inventory to meet the raising number of orders.

Current Situation

But despite or because of these investments the results showed a lower net profit margin, furthermore the cash balance and the stock price had fallen recently.

Jay Smith, Assistant of the President, has now the challenge to prepare some feasible answers and suggestions for his boss, Joe Mathis, who has to inform the shareholders about the current situation.

Questions of the Case Study

1. Why has the stock price fallen despite the fact that the net income has increased?

The stock price has fallen from $7 to $5.50 despite the fact that the net income has increased. The reason for the decrease of the stock price is that the shareholders are concerned about the increasing debts and liabilities, caused by the recent investments in two additional manufacturing facilities and a significant increase of its inventory. The concerns are based on the belief that the increased amount of debts and liabilities will result in lower future net income, because of the interests, which the company will have to pay. So the negative effects of these recent investments are visible in some severe changes in the balance sheet, the income statement and the financial ratios. For example from 2003 to 2004 the amount of interest

You May Also Find These Documents Helpful

  • Satisfactory Essays

    Signal Cable Company

    • 294 Words
    • 2 Pages

    Case 1: Signal cable company 1. Why has the stock price fallen despite the fact that the net income has increased? Ans: The stock price for Signal Cable company could have fallen for a variety of reasons. Stock price is influenced by the performance of the company, investor expectations as well as general market/economic conditions. In the case of Signal, it is clear that the stock price fell despite an increase in the net income. This could be possibly because the…

    • 294 Words
    • 2 Pages
    Satisfactory Essays
  • Good Essays

    Solution to Case 1 Cash Flow Analysis Signal Cable Company* * Note to Instructors: When assigning this case, inform the students that the firm’s stock price has recently dropped from $7 per share to $5.50 per share. Case objective: The objective of this case is to cover financial statement analysis and cash flow analysis, with a particular emphasis on liquidity and net working capital. Student Preparation time: Approximately 2 hours. Answers to questions: 1. Why has the stock price fallen…

    • 1197 Words
    • 5 Pages
    Good Essays
  • Satisfactory Essays

    MARKETING ANALYSIS Name: Pepple AnnabeL A marketing oriented company is one that provides for the needs and wants of customer and potiential customers to drive all the company’s strategic decisions. The companies in question should be able to be committed to creating customer value. To achieve meeting customer’s need and wants and most importantly having a suitable competitve adavantage,a market research…

    • 271 Words
    • 2 Pages
    Satisfactory Essays
  • Good Essays

    CASE: Samyeong Cable Company The problem: • Samyeong, as one of the major suppliers of Hyundai for control cables, they are pressured to make major changes in the area of cost, quality and, productivity which are Hyundai's selection criteria. Courses of Action In order to meet Hyundai's selection criteria, Samyeong must have a responsive supply chain which focus on innovative products and stable processes. This will utilize strategies aimed at being responsive and flexible to the rapid…

    • 870 Words
    • 4 Pages
    Good Essays
  • Powerful Essays

    CASE Raynal, W. “Teaming with Enthusiasm.” Auto-Week, May 4, 1992. Royer, P. S. “Risk Management: The Undiscovered Dimension of Project Management.” PM Network, September 2000. An extended version of this article appears in Project Management Journal, March 2000. Sheffi, Y. The Resilient Enterprise. Cambridge, MA: MIT Press, 2005. Stamatis, D. H. Failure Mode and Effect Analysis: FMEA from Theory to Execution, 2nd ed. ASQ Quality Press, 2003. Tennant, D. “PMO Failure: An Observation,”…

    • 2811 Words
    • 13 Pages
    Powerful Essays
  • Better Essays

    1. If Norm chooses to go ahead with the microprocessor conversion on the machinery without passing it by the team, what are the potential conflicts that might arise? What are the advantages of such a move? - The biggest potential problem here is that the production team might feel slighted as their opinions were not considered in this major decision, and it may affect their current strong feeling of value hat they have with the company. Essentially if feeling of value is affected then productivity…

    • 993 Words
    • 4 Pages
    Better Essays
  • Good Essays

    Oilwell Cable Company, originally known as Chord Cable Company out of New Jersey, has been acquired by new management and relocated in Lawrence, Kansas. Original manager behind this move was Gino Strappoli, who came up with a corporate structure that determined company’s success. His vision of the company was for everyone to have some responsibility, all the way down to the workers in production. One of the reasons behind this approach was that this was a continuous manufacturing process that involved…

    • 1048 Words
    • 5 Pages
    Good Essays
  • Good Essays

    Rogers Cable Case

    • 1019 Words
    • 5 Pages

    Rogers Cable: First Time Right Program CASE STUDY ANSWER GUIDELINE A. Defining the Issue(s): -Eliminate the repeat effort currently required to successfully install and service customers during the 1st visit by Rogers Cable service technicians. B. Analyzing Case Data: (Option One) -1993 Canadian Telecommunication Act 1993 opened competition. -Cable companies have typically focused on growing rapidly. -Establishing a large subscriber base is key for pay-off to high investment cost…

    • 1019 Words
    • 5 Pages
    Good Essays
  • Good Essays

    1. If Norm chooses to go ahead with the microprocessor conversion on the machinery without passing it by the team he runs the risk of having a conflict with the production team. In the past a similar situation had caused significant trouble and Norm did not want to rock the boat for the sake of it. The company structure is such that each team decides on matters pertaining to their area and Norm’s decision to implement the change would definitely cause a stir. The implementation of the microprocessor…

    • 435 Words
    • 2 Pages
    Good Essays
  • Powerful Essays

    magic cable case

    • 3099 Words
    • 13 Pages

    Magic Cable by Joseph Kavanaugh, Henry S. Maddux III., Harry Gene Redden all at Sam Houston State University Texas, U.S.A. This case may be used by current adopters of: S. L. McShane Canadian Organizational Behaviour, 5th ed. (Toronto: McGraw-Hill Ryerson, 2004); S. L. McShane & M. A. von Glinow, Organizational Behavior, 3rd ed. (Boston: McGraw-Hill, 2005); S. L. McShane & T. Travaglione, Organisational Behaviour on the Pacific Rim, 1st ed. (Sydney: McGraw-Hill Australia, 2003) Copyright…

    • 3099 Words
    • 13 Pages
    Powerful Essays