In Case 15, GoPro’s Struggle for Survival in 2016, the following is mention:

As GoPro moved into 2015, it appeared to be the poster child for American entrepreneurial success, going from a humble beginning as a homemade camera tether and plastic case vendor in 2004, to an action camera vendor with $350,000 in sales in 2005 (its first full year of operation), to revenue of $1.6 billion in 2015. The company had gone public in June, 2014, and at its peak in October, 2014, GoPro stock traded at over $98.00. In 2014, GoPro was ranked #1 most popular brand on YouTube with more than 640 million views, and an average of 845 thousand views daily. In 2015, the average daily views were up to 1.01 million. Abruptly, in the third quarter of 2015, GoPro’s magic disappeared. Fourth quarter, 2015 revenue dropped by 31 percent from the prior year, and net income (loss) fell by 128 percent to a net loss of $34.5 million. By the end of December, 2015, the stock traded at less than $20.00. GoPro’s sales continued to slip in 2016. The newly introduced HERO4 camera performed poorly, and the company cut its price by half and reduced its product line to three cameras. The Karma camera drone, set for release in the first half of 2016, was inexplicably pushed back to winter, and there was no date for release of the HERO5 action camera. After the first quarter 2016 results were released, GoPro’s stock dropped below $9.00. According to Investor Place (28 March, 2016), GoPro had “essentially erased its once coveted title of Wall Street’s darling and is now loathed by Wall Street.”

What is your assessment of GoPro’s business model and competitive strategy? Does its approach to deliver customer value contribute to a sustainable competitive advantage?

One of the competitive strategies to consider is whether to be a “first-mover,” “first-follower,” or “slow-mover.” Which strategy do you believe Go-Pro has embraced? Is your chosen strategy the right course of action for Go-pro all of the time? Please explain

BUSINESS DECISION: FINANCIAL RATIOS

The years 2005 to 2009 saw a coffe company's revenues grow by more than 50%. Use the following financial data to answer the questions below.

a. Calculate the asset turnover ratio for 2008 and 2009. Round to the nearest hundredth.

2008:

2009:

b. Calculate the net profit margin for 2007, 2008, and 2009. Round to the nearest tenth.

Do not enter the percent symbol in your answer.

2007:  %

2008:  %

2009:  %

c. Calculate the return on investment for 2007, 2008, and 2009. Round to the nearest tenth.

Do not enter the percent symbol in your answer.

2007:  %

2008:  %

2009:  %

d. Prepare a trend analysis of the net revenue and total assets for 2005 through 2009.

Round to the nearest tenth. Do not enter the percent symbol in your answer.

e. Prepare a trend analysis multiple-line chart for the information in part d.

A magazine published data on the best small firms in a certain year. These were firms which had been publicly traded for at least a year, have a stock price of at least $5 per share, and have reported annual revenue between $5 million and $1 billion. The table below shows the ages of the chief executive officers for the first 68 ranked firms.

(a) What is the frequency for CEO ages between (but not including) 54 and 65? (Enter your answer as a whole number.)


(b) What percentage of CEOs are 65 years or older? (Round your answer to the nearest whole number.)
%

(c) What is the relative frequency of ages under 50? (Round your answer to two decimal places.)


(d) What is the cumulative relative frequency for CEOs younger than 55? (Round your answer to two decimal places.)

From the following balance sheet and additional information given, prepare cash flow statement.

Balance Sheet as on March 31, 2005 and 2006

Additional Information:

(a) Investments costing Rs.16,000 were sold during the year for Rs.17,000 (b) Provision for tax made out of profit was Rs.18,000 for the year (c) During the year, a part of the fixed assets costing Rs.20,000 was sold for Rs.24,000 and the

profit was included in Profit and Loss account (d) Dividends paid amounted to Rs.80,000

Describe the various "mechanisms" that are supposed to keep publicly traded companies well governed.

1. Suppose the base year is 2005, and the only goods in the economy are apples and bananas. In 2005 both apples and bananas cost $1, and 100 apples and 100 bananas are produced. In 2006, apples cost $20 and bananas cost $5, and 50 apples and 200 bananas are produced.

1. What is nominal GDP in 2005?                     
2. What is real GDP in 2005?                             
3. What is the GDP deflator in 2005?                

In 2006?              

In 2006?              

In 2006?              

4. Suppose the fixed basket of goods is 1 apple and 2 bananas.
5. What is the level of the CPI in 2005?                   In 2006?              
6. What is the CPI inflation rate from 2005 to 2006?               

2. What are the three effects that bias the measurement of CPI?

3. Which of the three effects listed in part c does each of the following illustrate?
   1. US households in 2010 spent a larger fraction of their income on televisions than they did in 1950.                                                                                         
   2. All televisions available in 2010 had higher resolution than any televisions available in 1950.                                                                                              
   3. In 1950, no US household had a plasma screen television, but in 2010 they are widely available.                                                                                          

4. Suppose the average television purchased in 1950 cost $200, and the average television purchased today costs $700.
   1. What is the percentage change in the average television price?

2. Taking into account the effects in part c, is this percentage increase likely an underestimate or overestimate of the true change in the cost of televisions?   

3. Why?                                                                                                        

5. Suppose CPI is as follows in each year:

Suppose in the year 2007 you are considering a job offer that pays $50,000 in 2007, plus a 10% (compounding) raise in each of the next three years.

1. What nominal salary will you make in each year?

2. What will your real salary be in each year, using a 2007 base year?

3. What will your real salary be in each year, using a 2009 base year?

4. In what year was your real salary highest?
5. Does your answer to 4 depend on the base year selected?                         
6. Suppose instead your contract gave you $50,000 in 2007, plus a cost of living adjustment equal to the percentage change in CPI. Compute the nominal wage in each year.

In what years is this contract better than the original one?        

Listed below is the net sales in $ million for Home Depot Inc. and its subsidiaries from 1993 to 2015. Remember to code the years starting at 1 for year 1993.

Determine the least squares equation. On the basis of this information, what are the estimated sales for 2016 and 2017? (Round your final answers to 2 decimal places.)

You are estimating the beta of the stock of Calico,Inc. using historical return information. The following information is available:

Historical return %:

Year Calico,Inc. Viprot, inc. LCK Index ( Market proxy)

2009 28 24 18

2008 18 -20 15

2007 15 18 22

2006 13 15 19

2005 -6 -8 -12

2004 24 15 36

2003 -20 -18 -28

2002 -8 -6 -13

Using the historical return data and simple linear regression ( may use calculator, showing calculator entries or Excel or any Statistical Package, showing work):

a. Estimate the betas for Calico,Inc. Viprot,Inc. & LCK Index.

b. Using the formula in the book: Adjusted beta = 0.67(historical beta) + 0.35(1.0), find the adjusted beta of Calico,Inc and Viprot,Inc