Question

Imperial Packaging, Inc. is a producer of custom packaging, everything from sturdy cartons and cases for protecting fragile items on long trips to artistic displays and coverings for products and their packaging. Their clientele are high-end producers of custom products that are marketed for their unique style and sophistication. You are a financial analyst for the firm, and the CFO has assigned you to help him explain the 2018 results as reflected in the financial statements given in the table at the end of this document.

The firm has been growing steadily, with sales growth at around 6% per year since 2014. Imperial issued new long-term debt in 2015 and again in 2017, and they also issued new common equity in 2016 and 2018. During the period 2015 – 2017, the firm was able to increase the common dividend by 5% each year and still have a positive addition to retained earnings. However, in 2018, the firm was unable to increase the dividend, and yet also had a negative addition to retained earnings (i.e., retained earnings on the balance sheet fell in 2018). The CFO would like to increase the dividend by 5% in 2019, and so she needs you to analyze the firm’s financial statements over the past five years, and to forecast the pro forma financial statements for 2019 and analyze them as well.

You are to recreate the financial statements in the table at the end of this document in an Excel spreadsheet, then do a complete ratio and metrics analysis, similar to what was done for Marquardt Manufacturing in the textbook (you may use that as a template for your analysis), also in an Excel spreadsheet. Include all the ratios offered in the chapter, and the value metrics MVA, EVA and ROIC. Create common-size statements and do a percent change analysis as well. The CFO needs you to determine two things:

1. What drove the results that made it impossible to increase the dividend in 2018?
2. Are we on track to be able to afford growing the dividend by 5% in 2019?

Make the following assumptions during the analysis:

• In 2019 sales growth will be in line with growth in 2015 – 2018;
• No new net fixed assets will be required to meet the 2019 sales forecast;
• The 2019PF dividend will be $2.44 per share.

Use the percent of sales method as taught in the chapter to forecast the 2019 pro forma statements. Write a concise (one page) paper outlining the results of your analysis and answering the two questions posed to you by the CFO (address me as the CFO).

All of your ratio calculations should refer to the appropriate cells in the financial statements (for example, the Current Ratio should divide the Total Current Assets for a given year by the Total Current Liabilities for the same year). None of the calculations in the ratios or metrics should be hard-coded, with the exception of dividing numbers by 365 to get a daily figure from an annual number, or dividing by 12 to get a monthly figure from an annual number. Otherwise all calculations should refer directly to cells in the financial statements.

Answer 1

Shipping products can be tough, but shipping fragile items can be even tougher! You need to be extra careful, since if anything gets broken or damaged, you may have to bear the loss – and have a very unhappy customer!

Fragile items include anything that can be easily broken, from glassware to antiques and more. These delicate items can be made of any material, including crystal and ceramic, and need extra attention before shipping.

So, if your eCommerce business plans on shipping fragile items, be prepared to pack and ship them properly! Doing this can make shipping breakable items both domestically and overseas much easier and less stressful. Here’s a quick look at the best packing materials to use, how to protect fragile items for shipping, how to best ship fragile items and some tips for overseas shipping!

What is the Best Packing Material for Fragile Items?

When it comes to shipping fragile items, choosing the best packing material is very important. Here’s a quick look at some of the top materials to use:

• Packing tape is very useful for securing boxes.
• A properly-sized box. Importantly, the box should have the right dimensions for the fragile item, being a snug fit but leaving enough room for packaging materials to help safely transport the product.
• Bubble wrap to protect the item. Be sure to use multiple layers if you think the item is very delicate and requires extra protection.
• Airbags for filling the empty space left in the box. These are ideal for items with sharp edges.
• Packing peanuts can also be used for filling in any voids. The best way is to fill the box with some packing peanuts on the bottom of it, place the item in and fill the rest of the box in with the remaining packing peanuts.
• Foam enclosures can also be useful. If you plan on using them, be sure they’re molded to the specifications of the product you’re shipping.
• Foam-in-bag, a sprayed foam used for protecting items, is also great as it forms a protective mold around the item. These foams come in different densities, so be sure to do your research and choose which is best for your product.
• Crumpled craft paper is another simple but effective material for filling in gaps in your shipping box. For best results, place about two inches of crumpled paper between the fragile item and the wall of the box.
• Corrugated inserts can be used to strengthen the package and increase its durability.

How Do You Protect Fragile Items?

To protect fragile items for shipping, be sure to follow these steps carefully:

• Order a durable box with the correct dimensions for the product being shipped.
• Carefully wrap your item in bubble wrap.
• Fill the bottom of the box with packing peanuts.
• Place your item carefully in the center of the box.
• Fill the void around the item with foam, airbags or foam-in-box according to the fragility of the item you are shipping. The more valuable the item is, the more careful you need to be.
• Strengthen the box walls with craft paper and corrugated inserts.
• Close the box and tape it securely, ideally taping it multiple times to ensure it stays safe during transport.
• Importantly, never write “fragile” on your box. Doing so may actually result in worse treatment of it!

How Do You Ship Fragile Items?

To start shipping fragile items, be sure to do the following:

• Very carefully pack the object in a shipping box with an adequate amount of packing materials.
• Research couriers and choose the best one based on factors like cost, delivery time and best value.
• Obtain shipping insurance to minimize risks during transport.
• Schedule a pickup for your package or drop it off at the courier location.

Before selecting the best shipper for your fragile items, you need to know where you want to ship it, who offers the best value shipping solutions at the cheapest rates, the tracking system available and if picking up the parcel is feasible on their end. All of this will help you in evaluating which one is the best courier for fragile item shipping.

It’s also especially important to get insurance coverage when shipping delicate items. Usually, you’ll have two options: one is for full coverage for damaged and lost items while the other is just for lost items.

Selecting one depends on how valuable your item is and the distance it’s being shipped. If you want to ship a fragile product locally, insurance coverage may not be required. However, if you’re shipping fragile items overseas, then full coverage is the smartest choice. Full coverage may be expensive, but it’s worth the investment!

One of the best shippers for fragile items locally and internationally is UPS. Shipping fragile items with UPS offers a generally reliable and safe shipping solution. Plus, your package is already insured up to $100 by UPS by default with the option for additional coverage, making it a great choice overall.