Finance 2 Case Analysis Gainesboro Machine Tool Corporation Course Instructor: Prof A Kanagraj Submitted By: Amol Vyawahare Roll Number: 2008PGP021B Gainesboro Machine Tool Corporation Background Reading: Once a company makes a profit‚ they must decide on what to do with those profits. They could continue to retain the profits within the company‚ or they could pay out the profits to the owners of the firm in the form of dividends. Once the company decides on whether to pay dividends
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Question 1 (Statement of the Problem) Pinnacle Machine Tool Company is an example of an opportunity and a problem that needs to be examined. The CEO of Pinnacle‚ Don Anglos‚ has the opportunity to acquire Hoilman Inc. If Pinnacle Machine Tool Company acquires Hoilman Inc‚ they have the resources to develop software that transmits real-time information on its customers’ equipment. This advantage will enable the company to upgrade itself and be more sufficient to its customers. However‚ CFO and
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CASH BUDGET for HAMPTON MACHINE TOOL(000 $) CURRENT September October November December Receipts: A/R Collection(assumes 30-day;Oct& Nov. less advances of $840 and $726‚ respectively) Bank Loan Total Cash Inflow Expenditures: A/P Payment(paid in 30 days) Other Op. Outlays CAPITAL EXPENDITURE Taxes Interest Loan Principal Dividends Total Cash Outflow Beginning Cash Net Monthly Cash Flow ENDING CASH 684.000 2243.000 1323.000 2022.000 779.000 350.000 2136.000 1604.000 2369.750 January Sales -Advances
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Although this case presents several different issues to consider‚ the underlying problem is the correct implementation of Eastboro’s dividend policy. Eastboro was founded as a manufacturer of machine parts‚ and has traditionally paid a fairly substantial dividend. However‚ in recent years‚ the core focus of the company has shifted toward technology in the fields of computer-aided design and manufacturing‚ highlighted by its latest development‚ Artificial Workforce. This shift in the focus of Eastboro
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EAGLE MACHINE COMPANY The Eagle Machine Company has fallen on bad times. Eagle‚ a maker of specialty restaurant equipment‚ has sales totaling $72 million‚ but sales are declining while costs continue to increase. If things continue in this direction‚ Eagle soon may have to close its doors. At a special management meeting‚ the president lays it on the line! He demands that the firm break even in the remaining quarter of the year. For next year‚ he calls for profits of 5 percent‚ a 20 percent increase
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Hampton Machine Tool Case Group 5: Laura Lafitte‚ Joe Loden‚ Chris Ingham‚ Keenen Leake‚ and Humberto Maldonado Hampton Machine Tool Company was founded in 1915 and began supplying parts to military and automobile companies. Beginning in the 1960’s‚ heavy increases in defense spending prompted by the Vietnam War in conjunction with a blossoming automobile industry allowed Hampton Machine Tool Company to experience a period of high growth and increased profitability. By the mid-1970’s‚ defense spending
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Gainesboro Machine Tools Corporation Teaching Note Synopsis and Objectives In mid September 2005‚ Ashley Swenson‚ the chief financial officer (CFO) of a large computer-aided design and computer-aided manufacturing (CAD/CAM) equipment manufacturer needed to decide whether to pay out dividends to the firm’s shareholders‚ or to repurchase stock. If Swenson chose to pay out dividends‚ she would have to also decide upon the magnitude of the payout. A subsidiary question is whether the firm should
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MOTION IN MACHINE TOOLS A machine tool is a machine for making components of a given shape‚ size and accuracy as per the requirements by removing material from the workpiece by using a cutting tool to operate upon the workpiece. Machine tools are capable of producing themselves therefore the machine tools are quite often referred to as mother machine. In the manufacturing processes‚ machine tools are the most versatile and almost any product can be produced with them. The machine tools should able
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Introduction – Company background Dividend payment decisions Policy analysis ◦ Zero dividend payout – pros and cons ◦ 40% or $0.2 per share – pros and cons ◦ Residual-dividend payout – pros and cons Conclusion Founded in 1923 In early days‚ it has designed and manufactured a number of machinery parts‚ including metal presses‚ dies and molds. By 1975‚ it has evolved as innovative producer of industrial machinery and machine tools. In 1980‚ entered in CAD/CAM and established
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SUMMARY In this case‚ Dena Brenner‚ a young woman uses her position as Payroll Manager of the International Agricultural Seed Company‚ to commit fraud by paying the company’s payroll. What is interesting about this case is that the fraud was performed through of the use of a phantom employee that in this case was a former employee of the company. Another interesting thing is that she did not even know that person at all‚ she just chose him perhaps‚ because the company had terminated him long time
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