Dupont

In: Business and Management

Submitted By skibum242
Words 1191
Pages 5
DUPONT

ABSTRACT
Our team has been asked to look at DuPont and how its different foreign operations can have an impact on the firms overall profit. The team will first talk about how DuPont has many different subsidiaries all over the globe. The paper will also talk about two different subsidiaries and how they contribute to DuPont’s profits. Each of the subsidiaries of DuPont will affect its profits in a different way because of the foreign currency rates. The team also has gone and looked at what the company does to help hedge against the exchange rate risk they may face. The last thing that our team will be discussing on how an increase or even a decrease in the Dollars exchange value form all of its global subsidiaries may impact DuPont’s profitability.

DUPONT
Our team has been asked to look at DuPont and how being a Multinational enterprise may affect the company’s profits. Companies all over the world need to look at the foreign exchange rate risks that they may come across. There are many places around the world where their currency is not the same as the U.S. Dollar.
DuPont has been around for over 200 years and has been able to bring world class science and engineering to the global market. They have been able to do so thru their innovate products, materials and services. DuPont is very market driven with their innovations and over the years have been able to introduce many new products along with many different patent applications every year. DuPont is a very diverse company dealing with product from nutrition, agriculture, communications, security, construction and even transportation (DuPont, 2015). Everyone around the world has somehow used or known some one that has used a product that DuPont helped create.
When looking at DuPont and how they price their revenue and costs for the company they are using the U.S. dollar.…...

Similar Documents

Dupont Case Notes

...3)Attempting to remedy the situation, the firm cut its dividend in 1974 and 1975 and drastically reduced its working capital investment they turned to debt financing. Du Pont's debt-to-equity ratio rose from a conservative 7% in 1972 to 27% in 1975 while the interest coverage ratio fell from 38 to 4.6. The increased debt ratio shows that they were moving towards a higher leveraged position and aggressively financing growth with debt. The reduced interest coverage indicates that Du Pont was now more likely to be unable to meet the required interest payments on its debt. Even with these financial risks, the company's size, diversity, and history as a leader in manufacturing allowed it to maintain its prestigious AAA bond rating. Through the second half of the 1970s Du Pont was able to reduce its debt ratio to 20% and increase interest coverage to 11.5 which preserved its highest bond rating. This move to financial stability helped satisfy worried investors but the managers at Du Pont knew that to advance their company, they had to use this increased flexibility to make more moves. 2) To evaluate the appropriate capital structure for DuPont, it is necessary to first estimate its current cost of capital. Then we compute the corresponding weighted average costs of each alternative to determine the capital structure, which maximizes the firm’s value (minimizes firm’s costs). We then incorporate into the analysis, qualitative considerations such as: effects...

Words: 3396 - Pages: 14

Dupont

...CASE 1 - DUPONT QUESTIONNAIRE Please answer ALL the questions whether or not your household currently has carpeting. Part A Q1. Does your household currently own carpeting? 1._____Yes 2._____No (IF YES GO TO QUESTION Q2; IF NO GO TO QUESTION Q7) Q2. Which of the following styles of carpeting do you have in your home? Please check as many as apply. a. ._____One Color; Traditional Style b. ._____Multicolor; Traditional Style c. ._____One Color; Fashion Style d. ._____Multicolor; Fashion Style Please indicate your agreement with each of the following statements (Q3 to Q6). Q3. Carpeting is an important part of my home? Strongly Disagree Neutral 1 2 3 4 5 Q4. Carpeting is a fashion item for the home. Strongly Disagree Neutral 1 2 3 4 5 Strongly Agree 6 7 Strongly Agree 6 7 Q5. Carpeting is a central item in my interior design for my home. Strongly Disagree Neutral Strongly Agree 1 2 3 4 5 6 7 Q6. It is more important for a carpet to last long than look pretty. Strongly Disagree Neutral Strongly Agree 1 2 3 4 5 6 7 Q7. Suppose your household were to purchase new carpeting, please rate the relative importance of the factors you would consider in selecting carpeting on a 1 to 7 scale where 1 means "Not so Important" and 7 means "Very Important". Not so Important Very Important a. Stain resistance 1 2 3 4 5 6 7 b. Long life 1 2 3 4 5 6 7 c. Fashionable 1 2 3 4 5 6 7 d. Matches my furniture 1 2 3 4 5 6 7 e. Price 1 2 3 4 5 6 7 f. Made by a well known company 1 2 3 4 5...

Words: 1241 - Pages: 5

Change at Dupont

...Change at DuPont 1. Answer to Question no.1 Organization Development OD - I think OD is the main focus at DuPont. This can be concluded from the following: • Tom approached university of Virginia to bring the latest business thinking and to introduce managers to new ideas and apply them to improve the efficiency and the plant over all even without having any problems. This emprises that Tom is seeking the organizational development • Tom was looking for improving the company and the employees and hence will lead to stability and sustainability • In order to have this vision, Tom seems to have the necessary skills to ensure that the change is taking place. This is because the OD approach needs various skills and inter-personal skills to implement since it involves working with team and gaining confidences and trust • OD approach needs various skills The Appreciative Inquiry - This approach seeks to identify the recent working condition or scenario and knowledge which would help in developing and designing of the correct future for the organization by the way of discovery of new practices, building of new dreams for the organization and designing or construction of prospective ideas and implementation of those prospective ideas in future. The appreciative approach would help in conduction of effective supervision and any kind of dispute between the management and the employee. In the case of DuPont this is done when Mr. Gib Akin (the professor...

Words: 881 - Pages: 4

Dupont Case

...Introduction The products include Pioneer and other brands of seeds, insecticides, fungicides, herbicides, insect control products, and plant growth regulators. Acquisition and Selling of Conoco Our recommendation: Our recommendation is based on the performance of the division called Conoco which was the chief operating division adopted by the company in 1980s. As per our recommendation DuPont should divest in Conoco in a phased manner so that company can be free of non performing unit. Between 1940 and 1980, DuPont developed and marketed technologies such as Dacron, Mylar, Lycra, Kevlar, Tyvek, and Nomex. The company also expanded its pharmaceuticals and medical products business. The company acquired Conoco, an energy supplier, in 1981. In 1991, DuPont's pharmaceutical business entered into a joint venture (JV) with Merck, to focus on non-US markets. During the 1990s, the company acquired Protein Technologies International, a producer of soy protein products and Imperial Chemical's polyester-resins, a company with intermediates and polyester-films operations. In 1998, the company bought Merck's share of the pharmaceutical JV and renamed the company, DuPont Pharmaceuticals. Later that year, DuPont started selling its interests in Conoco which was completed in 1999. Conoco facility can be classified as cost center. It is one of the main cost centers of the company and hence the most resources are hogged up at this center. One needs to identify resources properly at...

Words: 2240 - Pages: 9

Change at Dupont

...Case Study: Change at DuPont Question No. 1: a. OD (Organizational Development): At DuPont it is found that the Organizational Development is well intended and needs a logical judgment of the entire managerial arrangement and every organization ought to ensure that the top of the authority is agreed and look forward for the change process. For this reason, the organization is required to set the proper targets and then show the willingness and effective skills to bring improvement in the performance of the organization. A three year turnaround is required to bring effectiveness. My first meeting was with Tom in the University of Virginia who was looking to be in touch with academic society for bringing some most recent opinion in business to his function (Cummings, T. G, & Worley, C. G, 2005). This sort of thinking at that stage was important to reduce the pressure to do work with high efficiency. The efforts for change to bring improvements depend upon the extent the organization is organized and planned. b. Appreciative Inquiry: At DuPont, it is found that Fuller, Griffin, and Ludema upholds it with the help of an approach named problem solving which comes to the supposition that “organizing is a problem required to be resolved”, the recognition of problems, examination of causes and solutions and the development of action plans are necessary steps to be considered in this regard. Besides this reason, they positioned to the suppositions that underlying...

Words: 1082 - Pages: 5

Dupont Internal Analysis

...Jourdan Morris March 10, 2014 MGT499-80 Strategic Management Project Interim Assignment #1 History and Description of the Company The E.I. du Pont de Nemours and Company (DuPont) was founded in 1802 by Eleuthère Irénée (E.I.) du Pont. E.I was trained in gunpowder handling as well as advance explosive production techniques (DuPont). E.I. left his home in France during the French Revolution to embark on a journey to America January of 1800. By the summer of 1802 DuPont opened up his first powder mill located on the Brandywine River. Since that very first mill opened the DuPont Company has been involved in a wide variety of industries; The Automotive, Research and Development, Technology, Communication industries and a whole host of others have all been ventured into by DuPont. DuPont currently is one of the most profitable chemical companies in the world. In 2012 DuPont ranked ninth in the world based on ICIS Top 100 (ICIS). Mission and Vision Statement DuPont’s mission statement is as followed: “DuPont is a science company. We work collaboratively to find sustainable, innovative, market-driven solutions to solve some of the world’s biggest challenges, making lives better, safer, and healthier for people everywhere.” The challenges that DuPont narrows its focuses on are food, energy, and protection solutions (DuPont.) Primary Industry SIC: 2879, Pesticides and Agricultural Chemicals, NEC NAICS: 325320, Pesticide and Other Agricultural Chemical...

Words: 1889 - Pages: 8

Change at Dupont

...Change at DuPont The case of Change at DuPont did not involve a particular problematic scenario. Change was constant at the plant and it was part of doing business hence the lack of change management as a rubric. More change was anticipated regardless of any formal change management practices. In order to guide the anticipated changes, the plant manager, Tom, was seeking new business insights from the academic community. Tom’s main focus was to educate managers on new ideas to apply them for further development and expansion of the plant. Furthermore, Tom was not looking for assistance in solving particular problems at the plant but was interested in improving the plant’s overall efficiency as he was under pressure to deliver results. 1. Using specific examples from the story, describe the extent to which each of the three approaches to change are evident in the DuPont case. a. OD The OD approach is quite evident in the DuPont case with the exception of the post-action data gathering and evaluation step. Tom, the plant manager, realized the need to improve the organizational effectiveness and consulted a university professor, Gib Akin, to shed new light on his business operations. Gib took the initiative for collecting the data by physically attending the plant and interviewing employees and managers. In addition, Gib advised leadership on how to introduce change to their employees. Managers and supervisors were advised on what actions they need to take, for example as...

Words: 1272 - Pages: 6

Dupont

...DuPont Case Analysis The Problems the company is facing is as follows: 1. Losing the position as the market leader. 2. People prefer alternate flooring to Carpeting and find it an ordeal to shop for carpets. 3. Customers were unhappy with the services provided by the retailers. 4. Fibre manufacturers were responsible for only supplying to the Carpet mills, thus the price and quantity standards were dictated by Carpet mills. 5. There was no proper market segmentation or market focus. Alternative Solutions to the problems 1. Develop the Brand name and ensure the customers know about DuPont and its products through various marketing strategies employed by the company. Some of the marketing strategies could be Advertisement in different industrial magazines and training the retailers. 2. Open a new division which deals with all products and services related to flooring. Also, the procedure of buying carpets could be turned into an emotional and enjoyable experience wherein the customers look at carpets as more than something just to walk on. 3. The company should provide proper Training session to the retailers so that they have proper knowledge about the products they are selling. And the customers should be provided with after sales service such as fitting of the carpet and maintenance which will ensure that customers leave satisfied. There could also be a hotline where the customers can directly contact experts in the industry. 4. There...

Words: 1731 - Pages: 7

Dupont

...However, there are additional features of hedge fund managers’ compensation that are purported to mitigate the degree of inherent asymmetry inherent in their pay structures. For instance, performance fees in many hedge funds are subjected to a hurdle i.e. the manager would receive no incentive fee if rates fall below a specifi ed level. Th e reason for this is that a manager should never be compensated for performing below what an investor would receive if his or her funds were in cash (or some other appropriate passive benchmark). A number of hedge funds are also subject to co-investments and ‘high water marks’, which also have the aim of curtailing excess risk-taking. A high water mark is applied to a performance fee calculation and means that a fund manager would only earn an incentive fee after past losses are made up and profi ts net of the loss are positive. High watermarks are intended to link the managers’ interests more closely to that of investors and to reduce the incentive for managers to seek volatile trades. A comprehensive list of the Principles and Standards (9 in total) can be found in the FSB’s 2011 Th ematic Review on Compensation, Peer Review Report (FSB, 2011). Below are listed some of the key measures: • Reforms to pay structures. Th e international compensation standards agreed by the G20 in Pittsburgh in 2009 were aimed at addressing the asymmetries inherent in existing pay structures in the fi nance sector. Th ey called for, fi rst, banning multi...

Words: 851 - Pages: 4

Dupont Case

... and benefits. According to Exhibit 6, DuPont will be able to fund about 78% of its 19831987 needs internally from operational cash flows, asset sales, etc. But a significant - and growing - amount will need to be financed separately to fund capital expenditures and NOWC increases viewed as nondiscretionary. The Pecking Order Hypothesis indicates that as much as possible of this financing requirement should come from new debt due to market perceptions of asymmetric information and flotation costs. 40 % Debt Scenario 40% Debt Scenario DuPont's 1982 interest payments consumed 83% of EBIT in a year with a 35.7% debt ratio. Increasing debt to 40% would therefore overly constrain managers, especially since free cash flow will be increasingly constrained by necessary capital expenditures, especially in 1985-87. Since these capital 25% Debt Scenario projects are necessary to maintain profitability, managers should not be discouraged from accepting positive-NPV projects. Concern? Earnings per share and return on equity could suffer more severe declines with the higher debt policy alternative. Another concern is that higher debt would limit availability of funding and constrain operations. Lower-than-projected EBIT would decrease DuPont's ability to pay for capital expenditures with internal funding and increase the debt needed for financing requirements, possibly to unacceptably risky levels. Costs of issuing enough equity to reach 25% could...

Words: 1117 - Pages: 5

Dupont Case

... time, sulfate process  plants were forced to comply with new environmental standards and legislation which  was capital intensive.  These two actions dramatically increased the cost of production of  the high­grade chloride process and the sulfate process for creating Titanium Dioxide.  Ultimately these changes made the choice in the market either upgrading current plants  to comply with environmental standards to use the sulfate process or produce Titanium  Dioxide through the low­grade process if ilmenite chloride. ......

Words: 2335 - Pages: 10

Dupont Analysis Coke/Pepsi

...Coca-Cola Co. Vs. PepsiCo Inc. DuPont Analysis Business Finance 12 pm section PepsiCo Inc. The DuPont analysis is a way of examining the financial ratio return on equity. ROE looks at how much a company earned in the previous period compared with the total amount of the owners’ equity invested in the business. The DuPont analysis looks at why ROE is what it is and identifies some of the underlying drivers of the ratio. The DuPont analysis numbers are taken straight form the income statements and balance sheets provided by the company in their quarterly and annual earnings releases or SEC filings. For this purpose, I am using the most recently filed Form 10-K annual report for PepsiCo, Inc., dated March 22, 2014. A DuPont analysis begins with PepsiCo’s profit margin. The profit margin tells you how profitably Pepsi is running the business. Pepsi has a net income is $1,216,000 and the company’s sales are $12,623,000, to get the profit margin we divide the net income by sales and get a profit margin of 9.63%. People don’t view the products PepsiCo, Inc. sells as a commodity since 9.63% is a profitable business. Asset turnover measures the amount of sales a company has relative to the assets it has to own and maintain in order to generate those revenues. The amount of turnover can tell us a fair bit about how the business operates. We can reach different conclusions once we determine whether the turnover is high or low. PepsiCo’s sales are $12,623,000 and its...

Words: 412 - Pages: 2

Dupont

...DuPont's Financial Health Checkup Ellen Rostron Southern New Hampshire University MBA-520-X3289 Accounting & Fin. Analysis 16TW3 Dr. Christine Oji March 26, 2016 DuPont's Financial Health Checkup As a newly-hired manager at a DuPont, my first task is to review the company’s past and current financial performance and health to begin planning for the upcoming year. My report will include several financial tables, along with a comprehensive narrative describing the organization’s context, financial performance, and health. Organizational Context For two hundred years, DuPont has followed its set of core values. Safety and health are priorities, and in the 90 countries that DuPont services its industry customers, there is a broad range of products that are offered (DuPont, 2016). DuPont is considered a Science Company. The Security and Exchange Commission Standard Industry Classification is Plastic Material, Synthetic Resin/ Rubber, Cellulos (No Glass). In this SIC, there are a handful of companies, overall lowering competition in this field. Appendix I highlights the Industries, the Products/Services, and the vast geographical area of DuPont’s reach. DuPont is inclusive of ten businesses. The six Business Segments are reported as Agriculture, Electronics & Communications, Industrial Biosciences, Nutrition & Health, Performance Materials and Safety & Protection (DuPont, 2016, p.4). Agriculture’s segment performance depends on the weather to...

Words: 1732 - Pages: 7

Dupont Analysis

...GROUP - 1 GROUP - 1 Du Pont- Conoco IPO Carve Out and Split Off Case Analysis Du Pont- Conoco IPO Carve Out and Split Off Case Analysis SUMMARY E.I. du Pont de Nemours and Company, global leader in the technological innovation in business and the fifteenth largest company in the US in 1999, decided to divest its subsidiary Conoco, major and integrated oil and energy company, previously acquired through an M&A deal of $7.8 billion. In fact DuPont decided to move the company from its traditional energy and chemical businesses towards life science (agriculture, biotechnology, pharmaceutical) in a major operation of refocus on the core business. What became clear to DuPont shareholders was that they were not benefiting from being either a special chemical company, life science company or oil company: the price-earning multiple of the entire company was less than any of its representative sectors. Initially, the strategy of the new CEO was to increase share price through the division of the company in three sectors, of which life science represented the one most heavily funded. However, while company share price was predicted to rise to $90, it fell to $60. For these reasons it was opted for a divestiture through a split-off: DuPont would allow to trade each DuPont stock for 2.95 Conoco stocks, up to a total of 148 million DuPont shares. Once the deal was announced, DuPont shares soared 11% at an all-time high of $79.50 per share The strategy would have...

Words: 845 - Pages: 4

Dupont

... DuPont Performance Coatings Case By Jake Greenstein and Andrew Rubenstein October 28, 2015 Introduction In January 2012, Ellen Kullman, CEO and chairman of DuPont, had to decide on the future of DuPont Performance Coatings (“DPC”), a division of DuPont that produced paint for the auto and trucking industries. From the beginning of Kullman’s term as CEO in January 2009, she sought to transition the Company from an economically struggling commodity chemical business (with a 2009 stock price below $19) to a specialty chemical and science-driven business (Exhibit ). Kullman believed DuPont was best positioned for a future at the core of industrial biotechnology by competing in agriculture, nutrition, and advanced materials, areas with larger growth potential and higher margins. With expected revenue growth of 3-5% coupled with expected operating margins of a mere 10-12%, DPC must outperform in order to fit Kullman’s strategic initiative. Overall, Kullman needed to determine whether or not to divest DPC through an auction process and to whom she should sell the division. DuPont Performance Coatings Overview Created in March 1999 through the merger of Herberts GmbH and Dupont Automotive Finishes, DPC produces paint for the auto and trucking industries. DPC’s products included high-performance liquid and powder coatings for motor vehicle original equipment manufacturers (“OEMs”), motor vehicle aftermarket, and general industrial applications. DPC generated 11% of DuPont’s...

Words: 3070 - Pages: 13