1 Question 1 (16 points) Carol Inc is considering the following three prices to charge customers for each of the candy packets they produce: i) $2.20 ii) $2.00 iii) $1.70 The relevant data for decision-making is below: Fixed Costs = $1200 Variable Costs = $0.50 per unit Calculate the following: a) The Breakeven Point for each price level b) Using price of $2.20 what would be the new breakeven point if (1) fixed costs decreased to $1000 all else remaining the same‚ (2) Variable costs increased to
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Inditex Valuation IE business school 7/24/2013 1. Background 1.1 Company overview Inditex is one of the world largest fashion retailers with more than 5‚500 stores in 86 countries. The most famous brand that Inditex owns is Zara which opened its first store in 1975 in A Coruña‚ Spain. Besides Zara‚ Inditex also owns brands such as Pull&Bear‚ Massimo Dutti‚ Bershka‚ Oysho‚ Zara Home and Uterque. The growth of this company has been dramatically strong and steady for more than 10 years
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ANALYSIS 1) Financial ratios of ABC plc from 2009 to 2011 : 2009 2010 2011 Gross margin - % 59.0 54.5 53.6 Net margin - % 21.0 18.5 14.6 ROCE - % 68 45.8 29.9 Return on Shareholder’s Funds - % 84 49.8 28.8 Earnings per share - £ 10.5 10.2 6.83 Dividends per share - £ 3 2.2 1 Current ratio 1.89 2.15 2.32 Quick ratio ( Acid test) 0.84 0.95 1.18 Stock turnover time - days 178 167.9 175.5 Debtor payment time - days 36.5 36.5 45.6 Creditor payment time - days 169.1 146.0 154.4 Gearing 39% 30.5% 25.9%
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Introduction I am analysing the accounts of Pumpkin Patch for the year ended 31st of July 2011. This report is prepared for Patrice who is considering purchasing shares from Pumpkin Patch. Pumpkin Patch was established in New Zealand in 1990 and is known for its reputation for fashionable childrenswear. Pumpkin Patch now has developed itself further internationally with retail stores in New Zealand‚ Australia‚ UK‚ Ireland and the United States. Liquidity The current ratio of Pumpkin
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Pacific over the years of our forecast from FY2012 to FY2015. Based on the calculations‚ several assumptions and limitations on BreadTalk’s intrinsic value of share price were analysed and consequently estimated with four models. These models are Dividend Valuation Model‚ Free Cash Flow to Equity Model‚ Price/Earnings Ratio Model and the Price/Book Value Model. Through the use of the mentioned models‚ we will conduct an in-depth analysis and evaluate on the results obtained to provide an assessment
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conducting the analysis of EMI group’s dividend policy‚ one factor that stood out to us was the clientele effect. The clientele effect shows us who holds most of our outstanding shares. High tax-bracket individuals would prefer zero-to-low dividend payout to save on taxes. Low tax-bracket individuals would prefer a low-to-medium dividend payout‚ which gives them additional income while helping them save on taxes. An investing corporation would prefer a higher dividend payout because if they own a significant
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FIN-516 – WEEK 2 – MINI – CASE ASSIGNMENT 1. What is the name of the company? What is the industry sector? General Electric Industrial Goods 2. What are the operating risks of the company? 3. What is the financial risk of the company (the LT debt to total capitalization ratio)? Debt to equity = Total debt ÷ GE shareowners’ equity = 11‚589 ÷ 116‚438 = 0.10 4. Does the company have any preferred stock? (shares/book value/market price and value) GE does not have any preferred
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22nd October 1996 Interpretation of Accounts for Tasker Lynch plc. By Louise Rhodes Company Accountant 1/ Terms of Reference As the company’s accountant I have been asked by the board of directors to appraise the financial company of my choice. The appraisal was requested by the chairman who would like to invest a sum of money on behalf of the employees of Tasker Lynch plc. This report has been prepared to analyse the financial performance of The Booker Group‚ the company I am looking into
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4) UST Inc. has paid uninterrupted dividends since 1912. Will the recapitalization hamper future dividend payments? UST Inc. has paid uninterrupted dividends since 1912. Assess the impact of the plan on UST’s $ dividend and dividend per share‚ assuming it continues to payout 64% of its earnings as dividends. Exhibit TN-6: Impact of Recapitalization on DividendsDebt = $1 BillionActual 1998Pro-forma 1999 No debtPro-forma 1999 Rd = 7.82Net Income467.9491442.56Shares185.5185.5158.42Earnings per Share2
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reports net income of $2 million and follows a residual distribution model with all distributions as dividends‚ what will be its dividend payout ratio? $410‚000 (3000000/5000000)*1000000 – (500000/5000000)*1000000 - .05(6000000)(1-.07) .6*1000000 - .1*1000000 – 300000*.3 600000-100000-90000 =410000 (13-2) Value of Operations of Constant Growth Firm EMC Corporation has never paid a dividend. Its current free cash flow of $400‚000 is expected to grow at a constant rate of 5%. The weighted
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