The financial performance of Benson Corporation, in terms of financial ratios is given below: Ratio Formula 2009 2010 2011 Comment LIQUIDITY Current Current Assets 2.37x 2.36x 1.62x Poor Current Liabilities Quick Current Assets - Inventories 0.87x 0.88x 0.62x Poor Current Liabilities ASSET MANAGEMENT Inventory Turnover Sales 11.42x 12.16x 12.5x OK Inventories Day Sales Outstanding Receivables 7 days 6 days 7 days OK Annual Sales/360 Fixed Assets Turnover Sales 1.82x 1.8x 1.67x Low Net Fixed Assets Total Assets Turnover Sales 1.01x 1.05x 1.03x Low Total Assets DEBT MANAGEMENT Debt to Asset Total Debt 53% 55% 59% High (Risky) Total Assets Time Interest Earned EBIT 2.66x 2.77x 1.73x High (Risky)…
Download file to see previous pages...
As compared to its 2009 performance, company seems to be in a much more difficult position. All four major financial aspects (liquidity, asset management, leverage and profitability) of Benson Corporations are prone to severe dangers. Liquidity position of the company is worsening as the current ratio and quick ratio has decreased from 2.37 times to 1.62 times and from 0.87 times to 0.62 times respectively which indicates that the Benson Company ‘s current assets are running short to cover their liabilities. The only slight satisfactory position of Benson Corporation lies in asset management of the company where the performance of the company seems to be more stable. ...
Gloomy and dark profitability pictures can also be witnessed as profit margin has severely declined from 3.45% to 2.2%. Return On Assets and Return on Equity also disappointing shareholders as the decrease in ROA and ROE from3.5% to 2.27% and 7.54% to 5.64% can be observed. Cash flows for the Benson Corporation Project $ in million Years 0 1 2 3 4 5 6 Capital Investment (2.000) - - - - - - Cumulative Working Capital (0.200) (0.250) (0.313) (0.344) (0.378) (0.416) - Sales - 1.200 1.500 1.875 2.063 2.269 2.496 Fixed Cash Operating Expense - (0.150) (0.150) (0.150) (0.130) (0.130) (0.130) Variable Cash Operating Expense - (0.480) (0.585) (0.713) (0.784) (0.862) (0.948) Depreciation - 0.600 0.700 0.400 0.200 0.100 - PBT - (0.030) 0.065 0.613 0.949 1.177 1.417 Tax (30%) - 0.009 (0.020) (0.184) (0.285) (0.353) (0.425) PAT - (0.021) 0.455 0.429 0.664 0.824 0.992 Net Salvage Value of Capital Investment - - - - - - 0.150 Recovery of Working Capital - - - - - - 0.416 Initial Investment (2.000) - - - - - - Operating Cash Inflows (PAT+Dep) - 0.579 1.155 0.829 0.864 0.924 0.992 Incremental Working Capital (0.200) (0.050) (0.063) (0.031) (0.034) (0.038) 0.416 Terminal Cash Inflow (NSV+Rec WC) - - - - - - 0.566 Net Cash flows (Int Inv+OCF-Inc WC+TCF) (2.200) 0.529 1.093 0.798 0.830 0.886 1.974 NPV at 12% 1.5545 NPV at 12.8% 1.4532 NPV at 13.25% 1.3984 NPV at 13.2% 1.4044 Project Appraisal using NPV Behind the acceptance or rejection of any given project, both financial and non-financial factors need to be considered. On the financial terms, the best measure or tool to evaluate a certain project is to use Net Present Value. NPV approach depicts the present value of expected future cash flows in absolute terms; as a result it
...Download file to see next pagesRead More
Cite this document
(“Financial Management:Benson Corporation Assignment”, n.d.)
Retrieved de https://studentshare.org/business/1391668-financial-management
The business was initially sole proprietor but is taking on partnership form. The name Eco-Super Scrap Metals is chosen to imply that this business is also committed to clean environment for sustainability of health. 1.2 MARKETING PLAN AND STRATEGY Eco-Super Scrap Metals LTD will target metal processing companies that purchase treated scrap metals as raw material for their operations.
It helps them establish their basis within the pertinent market domains, and assist in exponentially enhancing their market share within the related market terrains. At times, firms pay just too much to acquire other corporations (Gaughan 1999). At other times, the costs for acquiring corporations is just reasonable, however this hardly happens and the firms end up paying a lot of money to purchase other corporations which shall be the cornerstone of their own success in the future.
Overall profitability of JVA Corporation is assessed by reviewing appraisal process, performance management system and compensation packages offered so that appropriate proposal is submitted by Human Resource (HR) department. For every organization, PMS is a vital tool for motivating employees and guiding them about performing in organization so that they can improve their skills and perform their job effectively (One Step, 2010; Virani, 2012).
Nestle Corporation is a company that has been very successful in the marketplace for over 100 years due to its ability to adapt to market changes and implement first order and second order changes whenever necessary. Throughout its history Nestle has implemented changes to ensure the success of the company.
(Barrell, 1997) But with the expansion in the economy, on one hand FDI has remained successful in providing full-fledged investment support to the East Asian countries, while on the other hand FDI has created a vacuum for the European states particularly in the area of labour.
Concentration index refers to the percentage of the market in which the largest organizations control. For instance, concentration index four refers to the percentage of the market share in which four largest
Xerox Corporation is a multinational management corporation based in America. It manufactures and sells a collection of printers in black and white, multifunctional systems, photocopiers, the printing press for digital production and other associated services. It was founded in 1906 in Rochester, which it initially produced photographic paper.
2 Pages(500 words)Assignment
GOT A TRICKY QUESTION? RECEIVE AN ANSWER FROM STUDENTS LIKE YOU!
Let us find you another Assignment on topic Financial Management:Benson Corporation for FREE!