Answer To: Hi are you able to assist with the attached. We need to make R&D, marketing, production, HR and...
Banasree answered on Sep 10 2022
Given data indicated that Chester is product-based company. They need to make R&D, marketing, production, HR and finance decisions which is correct to allow them to make a large profit and increase the competitiveness.
Finance : -
A. Financial Stat – Consolidated
1
ROS (Return on Sales)
-9.60%
2
Asset Turnover
0.85
3
ROA (Return on Assets)
-8.10%
4
Leverage
3.50%
5
ROE
-19.10%
6
Emergency Loan
0
7
Sales
1035160019
8
EBIT
4179185
9
Profits
9904914
10
Cumulative Profit
774055
11
SG&A/Sales
26.80%
12
Contrib. Margin
35.80%
B. Stock and Bonds –
Series
Face
Yield
Close
S&P
14.0S2028
20,850,000
14.2%
98.37
DDD
11.3S2033
18,994,000
13.4%
84.61
DDD
11.9S2034
9,604,000
13.8%
86.09
DDD
14.4S2036
21,141,000
14.8%
96.99
DDD
C. Financial Summary -
Dividends paid
0
Sales of common stock
1655
Purchase of common stock
0
Cash from long term debt issued
21,141
Early retirement of long-term debt
0
Retirement of current debt
25,628
Cash from current debt borrowing
0
Cash from emergency loan
0
Inventory -Operating Activities
36,088
Total current liability
16,375
Long term debt
70,586
Total liabilities
86,961
Total equity
35,082
Data analysis –
1. Company’s ROS, ROA, ROE and EBIT are not as expected. Hence the return on sales, return on assets, return on equity and earnings before interest and taxes are impacting on company’s performance.
2. Company’s high grade risk research data on public and private debts are not satisfactory. Therefore, it leads to the DDD category of the credit rating.
3. Financial summary indicated that long term debt, operating inventory and total liabilities are in high stake.
Recommendation/Proposal:
1. Company needs to curtail the cost to increase the revenue. Cost reduction involved the product inventory and the supplier.
2. Cost cutting of the selling product. As we know that company is the manufacturer therefore, they need negotiate the terms with their worker to increase the productivity with in the equal duration.
3. Company needs improve the net profit to get a better ROA.
4. Develop a competent plan for the exiting assets and the fixed assets.
5. Company has to utilize their financial leverage in terms of the debt and equity. Research has found that most impact could be done if the debt capital and equity capital are in good relation.
6. Company has to work on profit margin criteria and asset turnover.
7. Company needs to generate more demand to improve the EBIT.
8. Organization expenses, business expenses etc. need to analyzed thoroughly to identify the potential threats or the excess expenses.
Marketing: - Given data analysis.
1. Focus aged group as per the traditional stat is 2.0, with 47% importance, price is between $18- $28 with 23%, and the reliability 14000-19000 with 9% importance.
2. Focus aged group as per the low-end stat is 7.0, with 24% importance, price is...