...Competition Bikes, Inc. Financial Statement Analysis 3 Horizontal Analysis There are several methods used by companies and investors to assess a business’s overall financial health. One such method is horizontal analysis, which compares the financials of a company’s balance sheet and their income statements over two or more accounting periods. Comparing these numbers over a defined period of time enables the management and potential investors to see if the financial situation of the company is improving or time or not and what factors may be contributing to the increases or decreases in specific areas. For Competition Bikes, Inc. horizontal analysis, years 6, 7 and 8 were compared. Looking first at the comparable income statements we see that comparing years 6 and 7 in net sales there was a significant increase of 33%. Comparing years 7 and 8 there was then a decrease of 15% in net sales. Competition Bikes, Inc. states that this is due to the economic downturn and the fact that their main customer base of professional riders lost sponsorships thus less bike orders occurred. Although net sales did decrease from year 7 to 8, both of those years net sales were still significantly higher than year 6 indicating sales are trending upwards which is a strength. Competition Bikes, Inc. operating expenses have also changed over the three years. Comparing years 6 and 7 there was total increase...
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...Las Estrategias de Integración buscan controlar o adquirir el dominio de los distribuidores, de los proveedores o de la competencia; por lo cual existen tres tipos de Estrategia de Integración: Integración hacia delante, Integración hacia atrás e Integración Horizontal. • Integración Vertical hacia adelante. • Integración Vertical hacia Atrás. • Integración horizontal. Integración Vertical hacia Adelante. La Integración hacia delante busca controlar o adquirir el dominio de los distribuidores o detallistas. La Estrategia de Integración hacia delante es aplicable cuando: Cuando los distribuidores presentes de la organización son demasiado caros, poco confiables o incapaces de satisfacer las necesidades de distribución de la empresa. Cuando la existencia de distribuidores buenos es tan limitada que ofrece una ventaja competitiva a las empresas que se integran hacia adelante. Cuando la organización compite en una industria que está creciendo y que se espera que siga creciendo mucho; se trata de un factor porque la integración hacia adelante disminuye la capacidad de la organización para diversificarse si su industria básica falla. Cuando la organización cuenta con los recursos humanos y de capital necesarios para administrar el negocio nuevo para la distribución de sus propios productos. Cuando las ventajas de una producción estable son muchas; se trata de una consideración porque la organización puede mejorar los pronósticos de la demanda...
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...Unilever Horizontal Analysis Ratios | | Liquidity | | | 2014 | 2013 | Current Ratio | | | 0,63 | 0,70 | Acid test retio | | | 34,52 | 44,14 | Accounts receivable turnover | | 99,62 | 198,72 | Accounts receivable turnover days | | 4 | 2 | Inventory turnover | | | 6,81 | 7,38 | | | | | | | | | | | Profitability | | | 2014 | 2013 | Profit margin | | | 0,08 | 0,07 | Asset turnover | | | 1,10 | 1,05 | Return on assets | | | 0,09 | 0,08 | Return ordinary shareholders equity | | -31,07 | -25,60 | Earnings per share (EPS) | | | -181,63 | -178,35 | Price-earnings (PE) ratio | | | 3,07 | 3,92 | Payout ratio | | | 0,22 | 0,21 | | | | | | | | | | | Solvency Ratios | | | 2013 | 2014 | Debt to total assets | assets ratio | | 0,28 | 0,16 | Times interest earned | | | -0,02 | -0,01 | Sub-conclusion Unilever: Ratios: The liquidity of Unilever went through a big change between 2013 and 2014. Their accounts receivable turnover decreased dramatically while the accounts receivable turnover days doubled. The current ratio and acid test ratio decreased what is not good for the liquidity. However the acid test ratio is still remarkably high. Examining the profitability we find that the profit margin and return on assets are a bit low but increasing compared to 2013. Furthermore are all profitability ratios slowly increasing except for the payout ratio. That could indicate...
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...likely to be served when firms undergo: a. Horizontal integration b. Vertical integration c. Conglomerate integration d. None of the above 2. The source (home) location of most of the world's leading multinational enterprises is: a. North America and Europe b. North America and Asia c. Europe and South America d. Europe and Asia 3. Which type of multinational diversification occurs when the parent firm establishes foreign subsidiaries to produce intermediate goods going into the production of finished goods? a. Forward vertical integration b. Backward vertical integration c. Forward horizontal integration d. Backward horizontal integration 4. Suppose that an American automobile manufacturer establishes foreign subsidiaries to market the automobiles. This practice is referred to as: a. Forward vertical integration b. Forward conglomerate integration c. Backward vertical integration d. Backward conglomerate integration 5. Suppose that a steel manufacturer headquartered in Japan sets up a subsidiary in Canada to produce steel. This practice is referred to as: a. Conglomerate integration b. Forward vertical integration c. Backward vertical integration d. Horizontal integration 6. During the 1970s, American oil companies acquired nonenergy companies (e.g., copper, auto components) in response to anticipated decreases in investment opportunities in oil. This type of diversification is referred to as: a. Horizontal integration b. Conglomerate integration c...
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...above average profitability. Corporate management must create strategies and capitalize on evolving competitive markets (Lindgrin, 2012). Both the companies Yahoo and Amazon are constantly implementing such strategies to maintain a reputation that stays ahead of the market trends, information system and globalization. This study will evaluate the success of both companies’ corporate-level strategies in terms of horizontal integration, vertical integration, strategic outsourcing and diversification, and will determine the type of strategy that contributed most effectively to the creation of a successful and profitable multibusiness model. Additionally, this paper will recommend an appropriate new strategy for each company that may maximize profitability and improved competitiveness in the industry. Yahoo!, Inc. Competitive analysis To better understand Yahoo’s internal and external opportunities and threats, in order to better estimate Yahoo’s ability to capture value, our starting point would be a quick analysis of operating and financial performance of Yahoo comparing to its peers in the industry during the last four years. We already studied around 10 on-line based service providers with AOL having the closest business model, size and shared markets. One of the most important industry features observed was the ability of taking the advantage of economies of scale, the larger the revenues a company can generate...
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...Feasibility Brief 1: Rowner Community Trust Events Management Ltd. * Rowner Community Trust summary profile - (re-phrased from the internet) Rowner community trust is a new charity organization that operates under the umbrella of Rowner World Company. They aim to support the growth of the area Rowner in Hampshire by focusing on its economic, social and environmental angles and contribute to its community development. Rowner Community Trust is a new initiative. Therefore, as any other organizations it is looking forward to grow its social business by developing new social ventures to support Rowner community and sustain its social business. * Rowner Community Trust next project Group 1 will focus on Rowner Community Trust next project. The Community Trust next project is to create an Events Management Social Enterprise. This new project will generate revenues by providing events management services such as catering, conferences and other events management services to the following target segments: * SME's * Large Corporates * Public sector * Non-profit organizations * Consumer markets in following geographic locations: * London * Regional organizations involving the following stakeholders * Rowner Community Trust * Rowner Community Trust community center * Rowner Community Events Group The revenues coming from the events management social enterprise services will help in sustaining Rowner Community Trust and will...
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...Horizontal Merger When a merger between companies in the same industry occurs it is called a horizontal merger. Horizontal mergers usually happen in industries with fewer companies, because competition tends to be higher and potential gains in these kinds of mergers often deliver better results. (MBDA, n.d.). Example A merger between Nike and the Rebook shoe companies, for example, would be an example of a horizontal merger. The purpose of a horizontal merger is to create a larger organization with more market control. Because the two companies' operations will be similar, there may be opportunities to join certain operations, like manufacturing, to reduce costs. Vertical Merger A merger between two companies producing different goods or services for one specific finished product. A vertical merger occurs when two or more firms, operating at different levels within an industry's supply chain, merge operations. Most often the logic behind the merger is to increase synergies created by merging firms that would be more efficient operating as one. (MBDA, n.d.). Example A vertical merger joins two companies that may not compete with each other, but exist in the same supply chain. Microsoft joining with Intel would be an example of a vertical merger. Such a deal would allow the Microsoft to obtain better pricing on parts and have better control over the manufacturing process. The parts division, in turn, would be guaranteed a steady stream of business. Conglomerate A...
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...Walt Disney The central issue in this case is that with the merger of Walt Disney and ABC the success the company has been experiencing for so many years began to downslide and which caused Disney to go through some strategic changes for the company to regain back its status as the Entertainment King. Their success for so many years has been as a result of them venturing into so many business divisions like the Theme parks and also them licensing their products and its name. At the time Disney was formed, the movie industry was a favorable industry for making profit and Disney Productions was formed when Walt Disney realized this the company realized its first movie Snow White and the Seven Dwarfs which was very successful. It just produce any movie, the movies it produced were creative and of good quality. Corporate synergy was also a strategy used to rejuvenate Disney and Disney Dimensions was formed. Like the saying goes, “No man is an island”, we can’t do everything all by ourselves we definitely need people. At the end of this program, employees went back to their regular duties and were able to communicate more between themselves to get things done more efficiently and effectively. Rebuilding the various business divisions of the company by the encouraging not only financial forces but also creative forces i.e. encouraging the employees to be innovative and think of expansive ideas. Hiring Katzenberg who was a good script identifier, a good actor and...
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...every year. By keeping a database that includes contact information for every fan that Live Nation has ever had, Live Nation will be able to connect fans to their artists with greater ease. By strengthening the artist to fan connection, the purchase of merchandise and tickets will be easier and will help Live Nation to keep growing and profiting. Live Nation should combine concentration and horizontal integration as their growth strategies. Vertical integration will help focuses in its primary line of business. Merging with Ticketmaster will help Live Nation obtain database that includes contact information for every fan that Live Nation has ever had. At the same time, the ticket service will help increase traffic to its website, track music fan’s spending habits, and gain e-mail access to millions of fans. This in turn, will increase the online sales of products and services offered in that primary business. Horizontal integration strategy where the corporation has combined with multiple other entities which assist in its operation such as, stadiums, theatres, etc. Using the horizontal integration growth strategy Live Nation will be able to eliminate competition and keep profit inside the company. Another growth strategy Live Nation should implement is to create a one-stop operation that would handle all the musical needs of the artist. Live Nation should offer a multitude of services that reduces the amount of time spend focusing on certain aspects of concert preparation...
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...have P_1 A-P_2 A - ρA(z_2- z_1 )g=0 Or P_2- P_1= - ρ(z_2- z_1 )g So, under the influence of gravity , pressure decreases with the increase height. Equality of Pressure at the same level in a static fluid Since the fluid is at rest, there are no horizontal shear stresses on the sides of the element. For static equilibrium the sum of horizontal forces must be zero, P_1 A=P_2 A P_1=P_2 Therefore the pressure at any two points at the same level in a body of fluid at rest will be the same If the (x,y) is the horizontal plane then ∂p/∂x=0 and ∂p/∂y=0 Variation of pressure due to gravity from point to point in a static fluid Since the element is in equilibrium, the resultant of the forces in any direction should be zero Resolving forces in the axial direction, pA-(p+δp)A-ρgAδs cosθ=0 δp=-ρgδs cosθ Putting above equation in differential form, dp/ds=-ρgcos θ Special case =90° , horizontal axis (dp/ds)_(θ=90°)=-ρgcos 90°=0 ∂p/∂x=∂p/∂y=0 The above result confirms that the pressure is constant everywhere on the horizontal plane Special case =0° , Vertical axis (dp/ds)_(θ=0°)=∂p/∂z=-ρgcos 0°= -ρg ∂p/∂z= -ρg and since ∂p/∂x=∂p/∂y=0, we have dp/dz=-ρg Now consider two horizontal planes with vertical difference of z Pressure on lower plane...
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...Ratio, Vertical, and Horizontal Analysis Check Point Brandy McDonald Principles of Accounting February 24, 2012 Vaunda Davis Ratio, Vertical, and Horizontal Analysis Check Point The three vital tools of financial statements are the ratio, vertical, and horizontal analysis. Each financial statement examines the data within monetary statements of businesses or organizations. Being able to determine the financial stability of a company is important in addressing any areas of weakness or aide in the decision making processes. Ratio analysis is associated with evaluating the liquidity, profitability, and solvency of a corporation to judge performance scenarios. Vertical analysis gauges entries for assets, liabilities, and equities in a balance sheet to compare the proportions of the total account. It enables any size of a business the opportunity to easily compare relative annual changes. Horizontal analysis allows companies to compare performance ratios over a certain period of time, usually one year’s worth of entries. It is also referred to as trend analysis and offers insight into the overall success of a company in order to make sound investments. These types of ratios are able to be used on any item of finance from revenues to earnings within a company. PepsiCo, Inc. The Current Ratio for 2005 is Current Assets 10,454/ Current Liabilities 9,406 which equals 1.11%. The Current Ratio for 2004 is Current Assets 8,639/ Current Liabilities 6,752 which equals 1.28%. ...
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...[pic] An organization does not need any strategy if it is not in a competitive situation TETA-2607 Strategic Management • Do you agree with the claim and what grounds can you provide to support your stance? • Can an organization ever be in such a situation in which it does not encounter any competition whatsoever? | | | |TABLE ON CONTENTS |PAGE | |What is strategy |03 | |LEVELS OF STRATEGY |03 | |Corporate strategy |03 | |BUSINESS STRATEGY | | |FUNCTIONAL STRATEGY | | | |04 | |strategy in absence of competition | ...
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...Impact of Vertical Integration Table of Contents What is Vertical Integration?3 De Beers Summary3 Internal strengths of vertical integration5 External strengths of vertical integration6 Disadvantages of vertical integration7 Quad/Graphics and vertical integration7 Four types of Vertical Integration 7 Ownership and Breadth of De Beers 9 Conclusion 10 References11 What is Vertical Integration? Vertical integration is a powerful corporate strategy that when implemented under the right circumstances can work towards the organizations advantage. Vertical integration describes a firm's control over several or all of the production and or distribution steps involved in the creation of its product or service. This integration takes the assets that was owned by two organizations and combines it into a single business; this creates either a joint ownership, or the sale of one firm’s assets to another business. This strategy is more advantageous then contracting with an outside company since usually it creates lower operating costs and more control over quality of its products or services. Forward and backward integration in an organizations’ value chain is an attempt to strengthen a company’s business model. Although there are different forms of vertical integration, its main approach is either to expand operations backward into an industry that produces inputs for the company, or forward into an industry that distributes the company’s products. According to Harrigan...
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...There are three steps to the arm movement: outsweep, insweep, and recovery. The movement starts with the outsweep. From the initial position, the hands sink a little bit down and the palms face inward, and the hands rotate outward and move apart. During the outsweep the arms stay almost straight and parallel to the surface. The outsweep is followed by the insweep, where the hands point down and push the water backwards. The elbows stay in the horizontal plane through the shoulders. The hands push back until approximately the vertical plane through the shoulders. At the end of the insweep the hands come together with facing palms in front of the chest and the elbows are at the side at the body. In the recovery phase the hands are moved forward again into the initial position under water. The entire arm stroke starts slowly, increases speed to the peak arm movement speed in the insweep phase, and slows down again during recovery. The goal is to produce maximum thrust during the insweep phase, and minimum drag during the recovery phase. As a variant, it is possible to recover the arms over water. This reduces drag, but requires more power. Some competitive swimmers use this variant in competition. Another variant is the underwater pull-down, similar to the push phase of a butterfly stroke. This stroke continues the insweep phase and pushes the hands all the way to the back to the sides of the hip. This greatly increases the push from one stroke, but also makes recovery more difficult...
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...synergistic opportunities for both pre-merger companies. These may include realising additional tax benefits and diversifying business risk. Mergers can be horizontal or vertical, and can increase firm value via synergies such as economies of scale, product cost savings, sharing sales channels, use of the same backend services and leveraging expertise. In the present case however, Kennecott had more specific economic rationales. After the Peabody divestiture, Kennecott had a market value of $900 million, and also received $600 million of cash proceeds from sale of Peabody. Due to this Kennecott risked becoming an attractive acquisition target itself. Furthermore Kennecott was also facing other problems including fluctuations in copper prices and labor strikes. As a result, Kennecott decided to acquire another company to reinvest and utilize the sale proceeds from Peabody to mitigate both of these problems, by diversifying their business away from copper and to stabilize their earnings from political and economic fluctuations. Carborundum, a producer of abrasive products was an attractive acquisition target for Kennecott to replace Peabody given its stably increasing earnings profile. This rationale however does not appear to achieve general principles of either horizontal or vertical synergies. For horizontal mergers, acquirers and targets tend to be either in the same or similar industries at a similar point in the production chain, however Carborundum in this case...
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