...Sterling Household Products Company Acquisition of the Germicidal, Sanitation and Anitseptic Unit of Montagne Medical Instruments Company Executive Summary Sterling Household Products Company manufactured and marketed a wide variety of consumer goods products which were sold domestically as well internationally. Despite having great products and being positioned well in the industry, Sterling’s growth prospects were limited. Sterling’s decision to acquire the germicidal, sanitation and antiseptic production unit of Montagne Medical Instruments Company could provide the much needed growth. Furthermore, the division was well aligned with Sterling’s existing operations, helping Sterling diversify its business without compromising on its core competency. Assuming the growth rate of 3% for terminal value calculation, aligned with the GDP growth of US, the net present value (NPV) of the investment comes to $99.7 million. We also analyzed the NPV of acquisition under two scenarios - 0% growth and terminal value calculated using multiples of 9. As the acquisition provides immense opportunities for Sterling to further expand its production capacity, we calculate the NPV of $167 million. We firmly believe that Sterling should acquire Montagne Medical’s unit as it presents positive synergistic effect on Sterling’s cash flows. Business Risk The unlevered asset beta represents the pure business risk of the company. It does not take into consideration the effect of debt leverage...
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...opportunity to the management team of Sterling Household Products Company. Sterling manufactured and marketed a wide line of consumer goods, including laundry products, soaps, cosmetics, toilet preparations, and cleaning, disinfecting and sanitizing products, which were sold domestically and internationally, and were used every day in millions of households around the world. Sterling’s family of quality products included many highly regarded brand names, and the company had consistently delivered impressive sales and profits to the investment community. Sterling’s financial measures for all recent years showed that the company was successful, but a time series analysis of these same financial measures quickly isolated Sterling’s current challenge: growth rates for unit volume, sales, and profits were very low, and company management was looking to expand into businesses and products with more potential for growth. Sterling had identified health care as an industry with more growth potential, and a detailed search for health care products which could fit well into the company’s existing operations led to discussions between Sterling and Montagne Medical Instruments Company. Sterling was interested in acquiring Montagne Medical’s germicidal, sanitation, and antiseptic products unit, and Montagne Medical was willing to sell the unit for the right price. Negotiations had revealed that Montagne Medical believed the right price was $265 million, so Sterling had to determine if acquiring the...
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...germicidal, sanitation, and antiseptic products unit of Montagne Medical? Be sure to define business risk in your answer. 2. Verify the growth rates for sales and inflation (cost of goods sold, CGS) that are described in the case. This can be calculated from the income statement (Exhibit 1). An excel sheet containing the information described in the case can be found on Blackboard. What is the formula for finding the average compounded growth rate? 3. Find the growth rates for the rest of the items on the Income Statement and Balance sheet. Use Sparklines to provide a graphical representation of the trend. 4. Describe why Net Income for Sterling has decreased from 2010 to 2012. 5. Describe the five categories of financial ratios. Create a new tab, ‘Financial Ratios’, and calculate the following ratios for Sterling: Liquidity | Solvency | Asset Management | Profitability | Market Value | Current | Total Debt | Inventory Turnover | Profit Margin | EPS | Quick (Acid Test) | Times Interest Earned (TIE) | Days’ sales in Inventory | EBITDA Margin | PE | Cash | Cash Coverage | Receivables Turnover | ROA | Market-to-Book | | | Days’ sales in receivables | ROE | Market Cap | | | Total Asset Turnover (TAT) | ROIC | Enterprise Value | 6. Which firms are most appropriate to use as comparables to Montagne and why? 7. What is the unlevered beta appropriate for estimating the asset/industry risk of Montagne’s health care infection-control division...
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...was already living a severe economic recession. A drop in industrial productivity and high levels of unemployment struck the nation after the economic growth of the 1980’s (Table 1 and 2). Table 1 – Unemployment Rate in UK in % Source: Office for National Statistics (UK) Table 2 – Industrial Production in UK: Percentage change year-over-year Source: www.tradingeconomics.com During the prosper economic period of the 1980’s there was strong private investment on household, meaning that the mortgage credit rose significantly. In the beginning of the 1990’s the level of private debt was unbearable (Graph 1). Graph 1 - Debt to income ratio Source: Bank of England High rates of unemployment, high private debt and lack of macroeconomic surveillance tools have been pointed out as the main reasons for the economic recession of the early 1990’s. A sharper control over macroeconomic policies as well as an effective control of inflation and the defense of competitiveness of the sterling within Europe was some of the goals the British government aimed at by joining the ERM. A central exchange rate for each participating currency was established against the ECU, the artificial unit of account that set the pillars for the Euro currency. In practice, the participating currencies where actually pegged to the German mark, which was the most stable currency of the group. Still, there was no existing European central bank. So each national central bank was responsible...
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...Opposite of the opulence and extravagant taste of the time, Tiffany and Young were inspired in nature, offering clean and harmonious patterns creating a new “American Style” expressed on silver hollowware, flatware and later jewelry. In 1845, Tiffany published its first “Blue Book” catalog, which is still being published today showcasing its collection of fascinating couture jewelry, custom- designed pieces and most breathtaking jewels. Tiffany was the first company to introduce the 925 sterling silver standard of purity and mostly because of the efforts of Charles Lewis Tiffany; this ratio was adopted by the United States Congress as the American sterling silver standard. The company was awarded the grand prize for silver craftsmanship at the Paris Exposition Universelle in 1867, making Tiffany the first American design house to be honored by a foreign institution. By 1900 Tiffany & Co. had become America's leading supplier of jewels and timepieces as well as luxury personal, table, and household accessories. Tiffany’s reputation was not limited to the United States; the company had branches in major cities like London, Paris, and Geneva gaining international recognition as the leader in the diamonds and jewelry world. Throughout its history, Tiffany has been part of American tradition. The company has been asked multiple times by the United States to create special designs and commissions. Among them are: crafting ceremonial swords during the...
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...of the British Pound. As will be explained in this paper, many different factors caused downward pressure to be placed on the currency. Expected changes in the political structure of Britain causes some to feel unwavering about the future, especially when the current monetary and fiscal policies are not resulting in a positive outlook for the economy and especially the vale of the currency. Supply and demand for the currency will change as the currency appreciates and depreciates due to the country’s varying stages of surplus’ and deficits. These and other economic forces will be developed throughout the paper to analyze and interpret how the British Pound has changed over the first couple of months in 2013. Historical The pound sterling, commonly known as the pound (GBP), is the official currency of the United Kingdom. It is the oldest currency still in use as it was created in the Anglo-Saxon period where it was equivalent to one pound of silver (Dawnay, Kit). Over the years, the currency has evolved. In the late 17th century it was unofficially tied to gold and officially tied to gold in the early 19th century but suspended in 1914. By 1940, the GBP was pegged to the U.S. Dollar in the Bretton Woods Agreement. It then entered a free-floating period, a period shadowing the Deutsche Mark, and then a period where...
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...CONTENTS Page(s) 1. Introduction 2. Company Background 3. Swot Analysis 4. Strengths 5. Weaknesses 6. Opportunities 7. Threats 8. Recommendation/ Conclusion APA Referencing 1 1 1–2 3-4 5-6 7 8-9 10 10 - 12 1.0 Introduction The purpose of this report is to identify the factors found in the internal and external environments that could affect Holland and Barrett, a franchise brought to Singapore by the Jay Gee Melwani Group. 2.0 Company Background Holland & Barrett is a leading European brand, selling vitamins, minerals and herbal supplements (Holland and Barrett, 2013). The Melwani Group is a family run business, which represents and markets leading brands like Aigner, Aldo, Levis, Celio, Adidas Kids and many distinctive household brands (Jay Gee Melwani Group, 2013). The company brought Holland & Barrett to the Singapore retail scene and to date, they have 22 outlets (Holland and Barrett, 2013). 3.0 SWOT Analysis We will be adopting the SWOT model of analysis, looking at the strengths, weaknesses, opportunities and threats this business franchise maybe facing, so as to evaluate what are the possible internal and external environments that could affect the business. SWOT is widely used by companies when it comes to strategies planning (Coman, Ronen, 2009, p.1). It is a tool used by management to identify the strengths and weaknesses of a company within the internal environment, as well as opportunities and threats in the external environment (Kotler, P., Keller...
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...RESEARCH PAPER I. Title: Lining Our Silver Box: A Two Phase Study on the Usage, Attitude and Image of Silver Jewelry II. Background of the Study Sterling silver is a material commonly used in making hand-crafted jewelry. It is a silver-alloy made up of 92.5% silver and 7.5% other metals. Sterling silver jewelry is a popular accessory choice among thrifty shoppers who wish to look stylish and trendy. Buyers of sterling silver jewelry can replicate their favorite accessory trends, look and feel stylishly classy, while only paying a fraction of the cost of genuine silver, gold, or platinum. Silver Box started out in 2006 as a small humble company with a mission to design, execute, and distribute sterling silver jewelry creations of best value to Filipinos all over the country. From its initial launch at a Christmas bazaar, the small business has come far, branching out all around the metro. Despite its initial success and the rising demand for silver, Silver Box’s sales have declined. The company needs to have a clearer vision of what target market it is capable of achieving. In addition, Silver Box currently does not subscribe to any particular marketing strategy. For these reasons, this paper aims to conduct a thorough research on the consumers of sterling silver in order to find the appropriate market segments, brand strategies, and plans of action for Silver Box to reach a higher level of profitability. III. Objectives A. To identify the appropriate target...
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...EXORBITANT PRIVILEGE EXORBITANT PRIVILEGE The Rise and Fall of the Dollar and the Future of the International Monetary System Barry Eichengreen Oxford University Press, Inc., publishes works that further Oxford University’s objective of excellence in research, scholarship, and education. Oxford New York Auckland Cape Town Dar es Salaam Hong Kong Karachi Kuala Lumpur Madrid Melbourne Mexico City Nairobi New Delhi Shanghai Taipei Toronto With offices in Argentina Austria Brazil Chile Czech Republic France Greece Guatemala Hungary Italy Japan Poland Portugal Singapore South Korea Switzerland Thailand Turkey Ukraine Vietnam Copyright © 2011 by Barry Eichengreen Published by Oxford University Press, Inc. 198 Madison Avenue, New York, NY 10016 www.oup.com Oxford is a registered trademark of Oxford University Press All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted, in any form or by any means, electronic, mechanical, photocopying, recording, or otherwise, without the prior permission of Oxford University Press. Library of Congress Cataloging-in-Publication Data Eichengreen, Barry J. Exorbitant privilege : The Rise and Fall of the Dollar and the Future of the International Monetary System / Barry Eichengreen. p. cm. Includes bibliographical references and index. ISBN 978-0-19-975378-9 1. Money—United States—History—20th century. 2. Devaluation of currency—United States—History—21st century. 3. United States—Economic...
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...English Word count: 611 Cause and Effect: Losing a Job Having a job is one of the reasons for a person to be stabilized, especially when you are having or planning for a family. When you have a job, you make money that can be used for your needs, also to provide for your spouse and for your whole family. The effects of losing a job can affect the whole family. What would be effects of losing a job to you and your family? The loss of income, inability to pay rent, and academic trouble for the children. In many families the parents are the providers for the household, in single families it’s the single parent who provides. Loss of a job is another thing for unemployment and their loss of income. Most families turn to draw out unemployment checks, to help provide and pay bills. Also, many families tend to ask for food stamps to help put food in their homes to eat. The loss of a job can become a struggle to the families’ simple essentials in life. Parents, struggle to make it after a loss of a job. Also, as a parent you should always have money saved up in case of an emergency or a crisis like this one. This is another cause for financial problems, within the home. This may lead to separation or divorce within the home because the other spouse has too much pressure on them. Another problem, which may occur within the home, is the inability to pay rent. This is caused by not having money or yet enough to pay for your rent. You begin to struggle to find money and ask others...
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...Marco had to reduce the number of employees and relocate all the senior managers to the East Coast. There are some constraints imposed on this situation. Mark was offered his senior management position if he is willing to relocate to the East Coast. The family has roots in Illinois, which include a good family support system, a child in middle school, a baby on the way, having to sell their home in this current housing market, and his wife’s job is not being effective by this change in the company. Underlying elements of the problem include the company not making money, other employees in the company losing their job, and Mark and his family will have to make a life changing decision. The family going from a two income household to one income household whatever decision they make....
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...pressures that new-age couples have to deal with- running a home, doing daily chores like cooking/cleaning, raising children and handle the tight deadlines at work! Ever wondered how the 21st century couples can deal with all this? How can they divide their daily work, make sure their children get the right amount of attention and time and also be productive at work? Today, technology not just makes your life easy and simple, but also brings a work-life balance. There are many working couples, who constantly stay connected on mobile Internet- using email, social networking websites. Nitin Desai got married a year ago and both he and his wife Shweta are working for long hours. They are constantly in touch with each other over a lot of household issues on Google Talk. Anita Sharma and Anand are a busy couple, travelling to their respective offices- one in Mumbai's Cuff Parade and the other in Bandra. Also, they have a 10-year-old child to take care of! But technology has kept pace with this couple. Using Yahoo! Messenger, Anand and Anita divide and discuss home-related activities while sitting in office- who's buying grocery, pick up the child from school, etc. On her way home, Anita checks her son's homework using Office 2010 on her smart phone, which allows her editing of documents on her phone. Anita is also a bit cautious of what her son is surfing on the Internet. She has put in security/tracking software into her child's PC to stop him from accessing X-rated content. ...
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...Catherine Gilpin AC1109856 AN310 Assignment 5 11/15/11 “Technology and the family” / “Technology and social change” “Communication will change our lives” by Graham T.T. Molitor, promotes and agrees with new, advanced technology. Graham thinks that its advancements over the years has improved and eased the work load on people. Vs.”The effects on family and communication” by Dr.J.A Lueck, argues that the impact of technology can and has troubled families and the work force. (Molitor, 2003) (Lueck, 1998) I personally believe technology has its pros and cons. Technology does make communication easier, but it can cause miss communication. Face to face is always the best while communicating. In today’s society many juveniles are glued to their cell phones as my own thirteen year old is. He would rather text me then to walk into the other room to talk to me. This causes lack of communication in a family. Teens will go to the internet for information that they should be getting from their parents. Technology can be wonderful when used with respect but can be disastrous when misused as many people do. Graham T.T. Molitor feels technology has affected families in many ways successfully. He has proposed computers and other devises have taking the place of personal assistants, as they can handle a vast growing range of activities. Molitor believes problems that once required armies of people working their entire lifetimes to solve now can...
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...only in the work place, the military, or the government, should their be true sense of leadership but also in our households. The boss is the leader in the workplace, the President is the leader in the military, the people are supposed to be the leaders in the government, and moms and dads should be the leaders in a household. People look up the these people not as just humans but as people who will further their career or end it. They see them as people who will save their lives, or save their kids' lives. They see them as people who will mold the world into what we "the people" see best, or like right now to some, make it worse. With this these people are put into leadership roles, and as followers we don't want to see them as shady or not trustworthy. Therefore leaders need to be honest, dependable, and presentable. The people you lead are a reflection of yourself. Therefore you need to hold your morals, such as honesty to a higher level. Put faith into your employees and they will put faith into you and know that they will get an honest answer. This will ensure better profits, and loyal followers. For a business that means greater chance of success. For the government it means loyalty and less riots or government shut downs. For the military it could mean as much as saving a whole companies lives, or having fewer indiscrepencies with soldiers. In the household it could mean the world to a child, and will set the moral standard for the rest of their life. "Honesty is the...
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...Consistent with Hamilton’s rule, the theory that the closeness of biological ties governs altruistic behavior, outcomes for orphans depend on the relatedness of orphans to their household heads. The lower enrollment of orphans is largely explained by the greater tendency of orphans to live with distant relatives or unrelated caregivers. I n a follow-up to the 2001 noted that nearlyGeneral Assembly Specialare suffering HIV/ United Nations Session on AIDS, UNAIDS researchers 40% of the countries that from a generalized AIDS epidemic lack a national policy to support children “orphaned or made vulnerable by AIDS” (Joint United Nations Programme 2003:12). This is an important issue in sub-Saharan Africa, where the death of prime-aged adults from HIV/AIDS has led to pronounced concentrations of orphans. Recent Demographic and Health Surveys (DHS) have indicated that in Uganda, Malawi, Mozambique, Zambia, and Zimbabwe, nearly 15% of all children under age 15 have lost one or both parents, and more than 20% of 15-year-old children in these countries are orphans. Are orphans more vulnerable than other poor children in sub-Saharan Africa? Understanding the risks that orphans face is important for policy: if extended families insure each other, then governmental policies may not need to target orphans specifically. Households could be singled out for help on...
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