From the analysis of the options that are available to the company, one of the options is recommended. The analysis is done by using financial tools such as the net present value method and equivalent annual annuities,…
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For the current, the company has a total market share of 21.2% in the UK market for timber, second to London Counties.
The company has grown significantly over the years because of the marriage of the managing director, who was a sawmill owner to a wealthy forestry owner in the north of England. Being second in the total UK market, the company is poised for a position of growth as its prospects for the future.
Wooden Posts Ltd is poised for growth in the future. However, because of changes in the UK timber market the company is presented with three alternatives by an international business consultancy firm. According to the firm, because the market for the companys products may face a slow down in terms of growth, the company has two options to expand, and one option to withdraw or contract.
As the timber market in the UK is forecast to face a slow down in terms of growth, the rivalry in the current competition is expected to become more intense. In order to address this, the first option Wooden Posts Ltd has is to acquire a competitor, London Counties, the player with the largest market share in the UK market. This will increase the companys total market share. This is also significant to the company, as Wooden Posts Ltd has faced challenges in terms of increasing costs in the companys production and distribution systems. The logistical problems that give rise to increasing costs can be addressed by expanding the companys facilities in the form of facilities that are owned by one of its competitors. Although this option presents some potential gains to the company in the form of industry consolidation and economies of scale, this option is considered very risk--one, because of the potential failure of mergers, and two, even the merger proves to be successful, it does not guarantee that gains from acquisition are huge enough to contribute to the increase in shareholders wealth.
The second option to Wooden Posts Ltd is to improve the
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The first includes the vertical and horizontal analyses of the financial data converting them into common size statements. The second is the ratio analysis, ratios being computed from the financial data provided in the case. Common Size statements: Numerical figures of financial statements can be expressed as percentages of other figures on the same statement.
The Institute of Management Accountants has defined managerial accounting as “the process of identification, measurement, accumulation, analysis, preparation, interpretation, and communication of financial information used by management to plan, evaluate, and control within an organization and to assure appropriate use of and accountability for its resources” (qtd in Davis & Davis, 3).
Accounting is the process of identifying, measuring, handling and communicating the financial information about different economic entities for being used by the concerned parties. How this information is used by the company and the persons handling the information helps in classifying it in managerial and financial accounting.
Thus, the bond could be said to be selling at a discount.
d. The riskiness of a project is calculated by means of the variability in the returns from the project, which again is measured by the variance of returns. So, when the riskiness of two projects has to be compared,
For this purpose, cash budget is prepared by a company since cash budget is an extremely important tool used by financial managers for managing cash.
A cash budget is a schedule that shows cash receipts, cash disbursements, and cash balances
This was a driver that led to a bottom line growth from $112.0M to $161.0M in 2010.In the year 2010 South Western Airlines capital structure depended on an amount of debt that is analogous to the Airlines industrys standard, notwithstanding its growth throughout the
This ban has reduced the number of people who visit the bars and which in turn has led to a reduced level of volumetric sales of the company. Moreover, cheaper availability of alcohol in super markets must have resulted in a fall in
Precisely, companies or organizations which are operating in an energy Sector primarily encompasses its operations pertaining to the engagement in exploration & production activities, marketing, refining and refilling procedures,
This directly means that the management should endeavour to maximize the shareholders’ return. Every given return on capital should be achieved by carefully looking to minimize any risk that is posed to the owners of the equity.
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