Bad company's stock price is $35, and it has 2.0 million shares outstanding. You believe that if you buy the company and replace its management its value will increase by 16%. Assume that Bad has a poison pill with a 20% triggered all target shareholders-other than the acquirer-will be able to buy one new share in Bad for each share they own as an 80% discount? Assume that the price remains at 35 while you are acquiring your shares. If Bad's management decides to resist your buyout attempt you cross the 20% threshold of ownership.
A. how many new shares will be issued and at what price?
B. What will happen to your percentage ownership of Bad?
C. What will happen to the price of your shares of Bad?
D. Do you lose or gain from triggering the poison pill? If you lose, where does the loss go (who benefits)? If you gain, where does the gain come from (who loses)?
E. Every other shareholder in the target firm gains________ per share?
In: Finance
A manufacturer of smartphones is interested in designing a new phone around the way a typical customer would use it. One of the most important characteristics for any smartphone is battery life since every activity on a smartphone draws power from the battery in some way. This is especially true for those who use their phones heavily for texting, social media, gaming, etc.
In a marketing research survey, the manufacturer asked a random sample of 25 smartphone owners who consider themselves "heavy users" to run an app on their phone that would record the time the phone is used for various activities (but, for privacy reasons, not record what that activity was).
The company decides to first examine the total minutes used in all activities. The sample mean number of minutes of total use from the 25 users was 117.5, with a standard deviation of 21.6 minutes. Find the upper bound of a 90% confidence interval for the true mean total time that smartphones are used by the population of "heavy users" to one decimal place. Take all calculations toward the answer to three (3) decimal places.
In: Statistics and Probability
1- How would you benefit from an application of PM techniques in a project you may have been involved with? Consider how you would define the specific tasks and their respective durations in this "project." What were the goals of the project? What con- straints were imposed on the project managers?
3- Consider the relationship between a project team and the functional parts of an organ-ization. Who should have responsibility for approving specific tasks? If an engineer- ing task goes beyond its proposed duration and budget, who is responsible-the director of engineering or the project manager? In general, how do you think a com- pany that is functionally organized should deal with projects?
4- Suppose that your company has over a dozen projects to choose
from-but can select only a limited few. What criteria would you
suggest for ranking the projects? How would you ultimately decide
which projects to select?
Project Managment Tools & trade-offs, Ted Klastroin, Page 21
Chapter 1
In: Operations Management
Discuss why countries create barriers to trade when economic theory shows trade as being beneficial to a nation. Who benefits from international trade? Who loses from international trade? How can the negative effects of the failures from international trade be reduced? Do you agree with the concept of trade barriers? Why or why not?
In: Economics
Discuss why countries create barriers to trade when economic theory shows trade as being beneficial to a nation. Who benefits from international trade? Who loses from international trade? How can the negative effects of the failures from international trade be reduced? Do you agree with the concept of trade barriers? Why or why not?
In: Economics
Assume that you are considering purchasing stock as an investment. You have narrowed the choice to either Verge Corporation stock or Express Company stock and have assembled the following data for the two companies.Your strategy is to invest in companies that have low price-earnings ratios but appear to be in good shape financially. Assume that you have analyzed all other factors and that your decision depends on the results of ratio analysis.
Selected income statement data for the current year:
|
Verge |
Express |
|
|
Net sales (all on credit). . . . . . . . . . . . . . . . |
$599,000 |
$527,000 |
|
Cost of goods sold. . . . . . . . . . . . . . . . . . . . |
458,000 |
382,000 |
|
Income from operations. . . . . . . . . . . . . . . |
91,000 |
69,000 |
|
Interest expense. . . . . . . . . . . . . . . . . . . . . |
— |
10,000 |
|
Net income. . . . . . . . . . . . . . . . . . . . . . . . . . |
70,000 |
34,000 |
Selected balance sheet and market price data at end of currentyear:
|
Verge |
Express |
|
|
Current assets: |
||
|
Cash. . . . . . . . . . . . . . . . . . . . . . . |
$28,000 |
$38,000 |
|
Short-term investments. . . . . . . . . . |
7,000 |
13,000 |
|
Current receivables, net. . . . . . . . . . . |
189,000 |
168,000 |
|
Inventories. . . . . . . . . . . . . . . . . . . . . . |
219,000 |
190,000 |
|
Prepaid expenses. . . . . . . . . . . . . . . . |
18,000 |
12,000 |
|
Total current assets. . . . . . . . . . . . . . . |
461,000 |
421,000 |
|
Total assets. . . . . . . . . . . . . . . . . . . . . . . . . . . |
975,000 |
936,000 |
|
Total current liabilities. . . . . . . . . . . . . . . . . |
364,000 |
340,000 |
|
Total liabilities. . . . . . . . . . . . . . . . . . . . . . . . . |
666,000 |
693,000 |
|
Preferred stock, 9%, $150 par. . . . . . . . . . . . |
30,000 |
|
|
Common stock, $1 par (115,000 shares). . . . |
115,000 |
|
|
$5 par (10,000 shares) |
50,000 |
|
|
Total stockholders' equity. . . . . . . . . . . . . . . . |
309,000 |
243,000 |
|
Market price per share of common stock. . . . |
$7.32 |
$65.73 |
Selected balance sheet data at beginning of current year:
|
Verge |
Express |
|
|
Balance sheet: |
||
|
Current receivables, net. . . . . . . . . . . . . . . . . |
$146,000 |
$192,000 |
|
Inventories. . . . . . . . . . . . . . . . . . . . . . . . . . . . |
205,000 |
193,000 |
|
Total assets. . . . . . . . . . . . . . . . . . . . . . . . . . . |
852,000 |
914,000 |
|
Long-term debt. . . . . . . . . . . . . . . . . . . . . . . . |
— |
311,000 |
|
Preferred stock, 9%, $150 par. . . . . . . . . . . . |
30,000 |
|
|
Common stock, $1 par (115,000 shares). . . . |
115,000 |
|
|
$5 par (10,000 shares) |
50,000 |
|
|
Total stockholders' equity. . . . . . . . . . . . . . . . |
265,000 |
219,000 |
|
1. |
Compute the following ratios for both companies for the currentyear, and decide which company's stock better fits your investment strategy. |
|
|
a. |
Quick (acid-test) ratio |
|
|
b. |
Inventory turnover |
|
|
c. |
Days' sales in average receivables |
|
|
d. |
Debt ratio |
|
|
e. |
Times-interest-earned ratio |
|
|
f. |
Return on common stockholders' equity |
|
|
g. |
Earnings per share of common stock |
|
|
h. |
Price-earnings ratio |
|
Requirement 1. Compute the ratios for both companies for the
current year and decide which company's stock better fits your
investment strategy.
Begin by computing the ratios, starting with the quick(acid-test)
ratio. (Abbreviations used: Avg. = average, Cash* = cash and
cash equivalents, Mkt = market, o/s = outstanding, SE=
stockholders' equity, and ST = short-term.)
a. Quick (acid-test) ratio
Select the formula and then enter the amounts to calculate the
quick (acid-test) ratios. (Round the ratios to two
decimalplaces, X.XX.)
(
+
+
) /
=
Quick ratio
Verge
(
+
+
) /
=
Express
(
+
+
) /
=
b. Inventory turnover
Select the formula and then enter the amounts to calculate the
inventory turnover for each company. (Round the ratios to two
decimal places, X.XX.)
/
=
Inventory turnover
Verge
/
=
Express
/
=
c. Days' sales in average receivables
Select the formula and then enter the amounts to calculate days'
sales in average receivables for each company. (Use a 365-day
year. Round intermediary calculations to the nearest whole number,
X. Round your final answers to one decimal place, X.X.)
/
=
Days' sales in average receivables
Verge
/
=
Express
/
=
d. Debt ratio
Select the formula and then enter the amounts to calculate the debt
ratio for each company. (Enter the debt ratio in decimal form to
two decimal places, X.XX.)
/
=
Debt ratio
Verge
/
=
Express
/
=
e. Times-interest-earned ratio
Select the formula and then enter the amounts to calculate
thetimes-interest-earned ratio for Express. (Round the ratio to
one decimal place, X.X.)
/
=
Times-interest-earned ratio
Express
/
=
f. Return on common stockholders' equity
Select the formula and then enter the amounts to calculate the
return on common stockholders' equity (ROE) for each
company.(Complete all answer boxes. If an account has a zero
balance, enter a "0". Enter the ROE as a percentage rounded to the
nearestone-tenth percent, X.X%.)
(
-
) /
=
ROE
Verge
(
-
) /
=
%
Express
(
-
) /
=
%
g. Earnings per share of common stock
Select the formula and then enter the amounts to calculate earnings
per share (EPS) for each company. (Complete all answer boxes. If
an account has a zero balance, enter a "0". Round EPS to two
decimal places, X.XX.)
(
-
) /
=
EPS
Verge
(
-
) /
=
Express
(
-
) /
=
h. Price-earnings ratio
Select the formula and then enter the amounts to calculate
theprice-earnings (P/E) ratio for each company. (Enter amounts in
the formula to two decimal places, X.XX, but then round the P/E
ratios to one decimal place, X.X, as needed.)
/
=
P/E ratio
Verge
/
=
Express
/
=
Which company's stock better fits your investment strategy?
The common stock of
▼
Express Company
Verge Corporation
seems to fit the investment strategy better. Its price-earnings ratio is
▼
higher than that of Express Company
higher than that of Verge Corporation
lower than that of Express Company
lower than that of Verge Corporation
,
and
▼
Express Company appears to be in slightly better shape than Verge Corporation
Verge Corporation appears to be in slightly better shape than Express Company
.
In: Accounting
In 2005, The Economist noted the increasing dominance of Toyota in automotive manufacturing, commenting that “[t]here is the world car industry, and then there is Toyota.” For fiscal year 2009, Toyota produced slightly over 7 million vehicles, with approximately 40 percent of those being produced outside of Japan. In that same period, Toyota sold almost 7.6 million vehicles, and 74.3 percent of the sales were overseas. As of June 2009, Toyota employed over 320,000 people throughout its globally dispersed parts manufacturing, vehicle assembly, and marketing operations.
Toyota’s strong corporate culture is the “glue” that holds these far-flung operations together and makes them part of a single entity. “Spend some time with Toyota people and ¼ you realize there is something different about them. The rest of the car industry raves about engines, gearboxes, acceleration, fuel economy, handling, ride quality and sexy design. Toyota’s people talk about The Toyota Way [italics added] and about customers.” Toyota’s customer focus is legendary. Says one Toyota executive, “[t]he Toyota culture is inside all of us. Toyota is a customer’s company. ¼ Everything is done to make ¼ [the customer’s] life better.”
The Toyota Way, the defining element of Toyota’s corporate culture, is embodied in the following fourteen principles:
“Base your management decisions on a long-term philosophy, even at the expense of short-term financial goals.”
“Create a continuous process flow to bring problems to the surface.”
“Use ‘pull’ systems to avoid overproduction.”
“Level out the workload (heijunka). (Work like the tortoise, not the hare.)”
“Build a culture of stopping to fix problems, to get quality right the first time.”
“Standardized tasks and processes are the foundation for continuous improvement and employee empowerment.”
“Use visual control so no problems are hidden.”
“Use only reliable, thoroughly tested technology that serves your people and processes.”
“Grow leaders who thoroughly understand the work, live the philosophy, and teach it to others.”
“Develop exceptional people and teams who follow your company’s philosophy.”
“Respect your extended network of partners and suppliers by challenging them and helping them improve.”
“Go and see for yourself to thoroughly understand the situation (genchi genbutsu).”
“Make decisions slowly by consensus, thoroughly considering all options; implement decisions rapidly (nemawashi).”
“Become a learning organization through relentless reflection (hansei) and continuous improvement (kaizen).”
The Toyota Production System (TPS), which puts The Toyota Way into practice, focuses on “making cars, making cars better, and teaching everyone how to make cars better. At its Olympian best, Toyota adds one more level: [i]t is always looking to improve the process by which it improves all the other processes.”
Toyota’s culture has served the company very well for many years. Indeed, competitors marvel at Toyota’s culture and its ongoing success. As one General Motors’ planner observed privately, “the only way to stop Toyota would be the business equivalent of germ warfare, finding a ‘poison pill’ or ‘social virus’ that could be infiltrated into the company to destroy its culture.”
Over the years, “Toyota has adapted well to changes facing the automotive industry by establishing sound processes and procedures. It has made continuous change and improvement the essence of its business philosophy: each year thousands of improvements are suggested by employees and many are implemented. ¼ It has built its success with products that are made according to the all-embracing Toyota Way [italics added]. In fact, so confident is Toyota of its quality and reliability record, that it allows rival companies to visit its factories all over the world.”
In recent years, however, some cracks seem to be developing in the armor of Toyota’s vaunted culture. An internal Toyota study compared the company’s products against its competitors’ products—component by component, car by car—and found Toyota’s products to be superior in just over half of the hundreds of components and vehicle systems. Toyota judged such quality performance to be unacceptably mediocre. In reference to the U.S. market, some business analysts say that Toyota’s rapid growth is one cause of the company’s growing quality-control problems. Charles Fishman, writing in Fast Company, says, “Toyota is far from infallible ¼ recalls for quality and safety problems have spiked dramatically [and are] evidence of the strain that rapid growth puts on even the best systems. But those quality issues have seized the attention of Toyota’s senior management. In the larger arena, when the strategy isn’t to build cars but to build cars better, you create perpetual competitive advantage.”
Toyota has long desired to become the Number One Car Company in the world. However, the pursuit of this ambitious goal has strained Toyota’s fabled production system as “a series of un-Toyota-like quality problems have begun to nibble away at the firm’s reputation as the world’s most admired manufacturer and as a byword for reliable vehicles.”
Given that Toyota makes nearly as many vehicles outside Japan as it does at home, the company has been challenged in effectively inculcating The Toyota Way into its foreign manufacturing operations. This has contributed to the quality problems that Toyota has experienced in its foreign operations. Katsuaki Watanabe, Toyota’s CEO, “thinks Toyota is losing its competitive edge as it expands around the world.” He frets that quality, the foundation of its U.S. success, is slipping. He grouses that Toyota’s factories and engineering practices aren’t efficient enough.
Will The Toyota Way enable this company to solve it quality problems—or will Toyota need to part from its Way?
This case was written by Michael K. McCuddy, The Louis S. and Mary L. Morgal Chair of Christian Business Ethics and Professor of Management, College of Business Administration, Valparaiso University.
Case Study Questions: Answer the following questions
Describe Toyota’s culture from the perspective of espoused values and enacted values.
Using the perspective of the functions of organizational culture, explain the impact of The Toyota Way.
Using the perspective of the effects of organizational culture, explain the impact of The Toyota Way.
What challenges does Toyota face as it attempts to maintain The Toyota Way while pursuing vigorous global expansion?
In: Finance
For each of the following statements, decide if the statement is true or false and explain why:
A) If Jane buys a brand new 2016 car in 2017, 2017 GDP does not change.
B) The CPI is a better indicator of the price level than the GDP deflator
C) If workers at a customer service call center in Durham, NC get laid-off because their company has moved the call center to India; this is an example of cyclical unemployment.
D) “Full employment” occurs when every working aged individual in the economy is employed.
In: Economics
Ethics in Accounting and Business Question
My question focuses on Ford’s cost/benefit decision—If a firm meets the present regulations, do you think it is appropriate that they make decisions with cost/benefit analysis? Ford is clearly an extreme case, however there are other life-and-death decisions that are made in a similar way everyday—think, for instance, of how an actuary determines whether they should offer insurance to a very sick individual or to deny them coverage because it will cost the company too much? Are there times where this type of decision making is appropriate?
In: Accounting
Suppose we have an input file that contains information about how many hours each employee of a company has worked. The file looks like the following (Employee's name, Hours): John 6.5 9.5 7.25 9 8.55 Oscar 12.5 13.5 14 16 18.75 Judith 7 7 7 ••• Construct a program that reads this file and calculates the total number of hours worked by each individual. Make sure that the program handles each specific exception that could occur.'
python
In: Computer Science