Swot Analysis Of The Garden Company Limited

Swot Analysis Of The Garden Company Limited Garden supplies thousands of food products to todays retail and catering markets, with many of their products internationally awarded. As one of the largest bakery production corporations in Hong Kong, they are well equipped with state-of-the-art large-scale equipment. Their technology, quality, output and market development have long reached International Standards. Gardens wide assortments of products, high sales volume and extensive market penetration have long been broadly recognized. To further cope with rising market demand, they continue to inject large sums of investment into product research and development as well as upgrading their technology and production hardware. The various production procedures are completed with the most sophisticated equipment in their factory. Computer automation is integrated in all the processes from production to packaging, fully manifesting the remarkable results brought about by scientific management. Furthermore, their principal factory in Sham Tseng with a total area of 70,000 square meters carries out the production lines for bread, cakes, biscuits, candies etc. Unlike most firms in Hong Kong, Garden was a pro-China company and had been supplying bread to Chinese army during World War II. The firm closed its operations during the Japanese occupation of Hong Kong from 1941 to 1945. The company expanded with the growth of Hong Kong before and after World War II and benefited from the influx of immigrants from Mainland China. In the 1980s and 1990s, Garden products were shipped overseas to Chinese communities around the world. Besides their major business in Hong Kong, Garden has also been actively taping into the Mainland China market since the 1980s. Factories had been set up in Dong Guan and Yang Zhou to introduce the advanced technology into the food manufacturing industry of the Mainland. Achieving the ISO9001 certification in 1997 was a milestone in their history. It demonstrates that Garden, with its world-class corporate management and modern operation system, is a globally acclaimed food manufacturer. Today, the company remains a privately owned family (Cheung family) business with several joint ventures with mainland Chinese firms. It is one of the few Hong Kong firms with manufacturing operations still in Hong Kong. All Garden products are made of the finest ingredients selected from all around the world, for example their barley is from Australia, flour from the United States, milk and butter from New Zealand, just to name a few. Their long-standing experience, fully-automated technology and packing equipment together with careful quality control guarantee that every product of theirs can meet strict quality testing and safety standards in many countries. With the past 80 years of excellence, Garden has successfully established itself as a distinguished brand supported and favored by many consumers around the world. Their products currently reach many major Chinese communities in as far as Europe and America. Today they are actively developing overseas markets in order to offer their quality foods to consumers in different corners of the world. With more than eight decades of experience in food production, the Garden Companys determination in offering quality products and services and its innovative spirit are as strong as ever. Looking ahead, they will continue with their commitment to producing nutritious and quality food with the pursuit of perfection. QIE, which stands for Quality, innovation, Efficiency, serves as Gardens corporate mission with the objectives to lead their staff to pursuit of superb quality, continuous innovation and achieve efficiency enhancement. It is through the implementation of QIE that the recognition and reputation of their brand have been greatly elevated. To realize their goal of QIE, the Company puts LTC Learn, Think, and Communicate into practice with all their working together to continuously improve the manufacturing of quality products, developing new technologies and new product values so as to satisfy the ever-heightening needs of consumers. SWOT (Strengths, Weaknesses, Opportunities, and Threats) analysis Strengths: Garden has a global brand, it is a strong brand, strengths including brand recognition, brand quality, economies of scale, strong distribution network, strong distribution chain, supply chain, strong international operations, online growth, good reputation, reputation management, market share leadership, effective marketing strategy, experienced personnel, strong management team, effective communication, extensive customer base, loyal customers, cost advantage, asset leverage, competitive pricing, original and unique products, high research and development, advanced equipments, innovation, etc. Apart from all these company strengths, they are famous in Hong Kong. I believe that all households in Hong Kong consume their products, one or the other on a regular basis. They are considered second to none in the bakery industry. Weaknesses: Due to Gardens huge range of products, coupled with a substantial global retail network, bad communication is unavoidable, it happens from time to time. Furthermore, they experience diseconomies to scale, at times over leveraged financial position, and weak corporate governing practice. Since Gardens range of products is for the public in general, many of their competitors go to the upper end market, for example to high class customers such as hotels and delis, and leave Garden in the lower end market for many years. Opportunities: Garden basically has a healthy financial position. They did some acquisitions, merger and takeovers on a small scale basis. They also tie up with international events to capitalize on synergy opportunities for growth of the operation. They continuously look for new markets; expand in Asia, expand into online shopping; decrease its taxation through donations to charity organizations. In the era of emergence of international middle class, and change in consumer lifestyles, they are constantly changing their products to expand their customer base, and their service lines like new products such as drinks and snacks, and new service such as mail order. Threats: Although Garden has a lion share in the bakery industry, they have many competitors in the high end sector. With Hong Kong returning its sovereignty to Mainland China, Garden is facing many financially strong competitors from the Mainland. There are new competitors from the Mainland entering into this relatively small market. As far as their foreign business is concerned, foreign exchange rate changes affect its imports/exports strategies. The volatility in fuel costs, rising costs of business, pricing pressures, potentially slowing global economy, changes in demographics, change in consumer lifestyles, changing to cheaper technology, substitute products, changing consumer patterns, growing power of customers to set the price etc. are possible threats Garden has been facing during the past few years. Porters Five Forces analysis Competitive Rivalry within an industry: Since multi-market competition exists, rivalry between competitors in the industry is extremely intense. Companies in the industry have started new businesses to increase the level of competition with one another and compete heavily for geographic markets. There is no clear dominant market share player in the industry. Though the industry currently has relatively high growth, much of the business is cyclical, which leads to intensified competition in economic downturns. High fixed costs also contribute to intense competition. More recently, the continued growth of online shopping, mail orders, combined with increasing awareness of door to door logistics arrangements have been giving Garden headaches and they have been streamlining their services in this competitive environment. A few remarks are listed below to introduce some of Gardens international and local rivalries. Sara Lee Corporation Sara Lee Corporation is a global consumer products company with food, beverage, and household and body care lines of business. With powerful brands, such as Ambi Pur, Ball Park, Douwe Egberts, Hillshire Farm, Jimmy Dean, Kiwi, Sanex, Senseo and its namesake, Sara Lee, the company has leading positions in numerous categories in the more than 180 markets in which it competes. In Hong Kong, Garden has two main competitors in its frozen and fresh breads. For frozen breads, it major rivalries are Maxims, Sara Lee. For fresh breads, Garden is facing numerous small size competitors, in particular in the western style restaurants which bake on an everyday basis for its afternoon tea customers. Competitive Rivalry is a strong force in the bakery industry because the competitors use price cuts to compete, there is a low cost product range and there is ease in switching brands, and the companies in this industry can diversify and acquire other companies for strategic growth and for synergy purposes. Threat of New Entrants: The threat of new entrants into this industry is relatively low because of the scale required to make companies in the industry competitive. Capital demands to fund all of the assets required in the industry are extraordinarily large, making competition from entrepreneurs or small companies very difficult at this level of market competitiveness. Economies of scale are necessary for the business to be profitable and because of the intensity of rivalry, customers are difficult to attract. While the basic service of shipping goods would be relatively easy for new entrants to imitate, the competitors in the industry have created value and high switching costs for their customers through proprietary technologies. Threat of New Entrants is a weak force in this industry. Each company currently in the industry has strong brand images, leaving a harder job for new companies. The capital expenditures to start a bakery company are large, and the companies currently are achieving economies of scale by going global. Any smaller company will not be able to achieve these right away, not allowing them to compete on prices. Another factor threatening potential entrants is trade tariffs and international regulations. Most companies currently in the industry have already established relations with foreign countries. New companies will have to prove themselves to foreign companies, suppliers, and customers. Threat of Substitute Products: The threat of substitutes is currently high for the industry, but major technological or governmental foods regulations could change that. As mentioned above, although Garden has a lion share in the bakery industry, they have many competitors in the high end sector, for example Maxims, Saint Honore, Tai Pan Bakery etc. Garden is also facing many financially strong competitors from the Mainland. The latter produce substitute products such as dumplings, dim sums to suit the changing consumers taste. This is one of the many reasons why Garden has been continuously modifying the ingredients and packaging of their products during the past few years. Threat of Substitute Products is a strong force in this industry. There are plenty of substitute products in the market. Bakery retail outlets such as Maxims, Saint Honore, Tai Pan Bakery etc are conveniently located in all the 18 zones. One can literally find either one of them in almost every main street in Hong Kong. These competitors also offer very competitive prices which make potential consumers lose their brand loyalty and easy to switch to another brand. Bargaining Power of Suppliers: Suppliers bargaining power is fairly low in the industry, but different suppliers have slightly different pricing strategies to fight for their survival. Competitors are also on the same footing with suppliers, as they are all subject to the same prices, although they may have hedged differently. Labour is a major factor of production in the industry and differences between companies regarding labour contracts subjects them to varying degrees of supplier power. Suppliers of raw materials, components, labor, and services (such as expertise) to the firm can be a source of power over the firm, when there are few substitutes. Suppliers may refuse to work with the firm, or, e.g., charge excessively high prices for unique resources. This is a strong force if the suppliers serve different industries with their raw materials. If a supplier only has accounts or the majority of their accounts with different companies, they will not be able to control prices and supplies. Bargaining Power of Buyers: Customers in the industry initially have power, but once they commit to a bakery, their bargaining power decreases significantly. New customers can easily shop around for price or level of service in the beginning, but once they have chosen a bakery and buy their product, they are usually loyal to them. Customers are likely to become loyal to a certain provider because of long-standing relationships or personal interaction with the company. This is a moderate force in this industry because competition keeps prices similar among the companies. The only difference is degree in loyalty. Also, the buyers of the services in this industry are reactionary. They do not know the technology before it happens. They become dependent on the technology, service and speed offered by the companies in this industry and will pay for it. SCOR (Supply-Chain Operations Reference) Model Planning activities: Gardens target customers are the public in general, whether they be as young as 2 years old, to as old as 99, they could be Gardens customers. Their pricing strategy is value for money. Their marketing slogan has been nutrition you need every day with the highest quality. These planning activities have proved to be most successful and made Garden the leading supplier in the bakery industry, in particular in the breads, biscuits and cakes sectors. Sourcing activities: According to the reading materials I searched and found, Garden has been purchasing all the baking ingredients directly themselves. However, they do outsource through logistic companies in their delivery activities. Locally, they need to deliver their fresh breads every early morning to hundreds of retail outlets. They also need to deliver fresh buns to all McDonalds franchisees. Furthermore they also deliver a range of fancy breads to airline caterers, hotels and restaurants. Internationally, they outsource transportation companies as well as freight forwarders for special orders such as wedding and birthday cakes. Internally, they outsource information technologies, finance and accounting, sales and marketing, foods testing etc. just to name a few. Make or production activities: Gardens upstream suppliers are worldwide. These included but not limited to flour, sugar, milk, cocoa, vanilla, wheat, soda powder, etc. again just to name a few. Countries included but not limited to (in alphabetical order) Australia, Canada, China, Europe, Latin America, and the United States. Bread Production Gardens bread production lines operate on a 24-hour basis, of which one is the first fully-automated line for hamburger buns in Asia. Apart from the retail market, they provide a huge volume of wholesale goods, which include bread, pastry and frozen dough products to major fast food chains, restaurants, hotels and airline catering services in Hong Kong. With their far-ranging businesses, they are committed to providing consumers with better choices with continuous innovations. Biscuit production Garden possesses diverse expertise, equipment and automated production lines to produce a wide variety of biscuits including wafers, cookies, sandwich biscuits, saltine, crackers and assorted biscuit gift packs to meet market demands. Cake production Their wide range of cakes has long been famous for its high quality and great taste. To cope with market demand, Garden produces cake products with highly efficient production lines, of which one is fully computerized for producing mini-cakes. With a wholehearted contribution from over 1,200 employees, Garden has established itself as the most reputable manufacturer in the local industry. Order processing information systems All market interactions, from the understanding of aggregate demand to the fulfillment of each order are not done wholly by Garden internally themselves. Some logistics are being outsourced, in particular for the overseas markets in Northern and Latin America, Australia, Europe, and Canada. Garden normally receives their orders through phone, fax and e-mail or e-order. Its IT department uploads orders to the printing invoice system. Automatically, these invoices pass to its distribution department for delivery. After deliveries, these invoices will be, again automatically, sent to its accounting department. The latter department then issues credit notes to the appropriate customers. Currently they are still using the information systems designed by IBM. Quality Control foremen in Garden are made responsible to ensure that expiry date, and appearances are properly done, and presentable. All delivery vans must have the correct temperatures for the different kinds of products. Delivery activities: Different transportation teams are required for different products. Fresh breads, frozen breads, biscuits are being delivered by the China and Hong Kong transport teams. Fresh bread team has about 60 vehicles to deliver 4,000 orders per day. These trucks are recognizable easily on the streets. Frozen breads and biscuits teams have about 20 vehicles to deliver 400 orders per day. Three trailers are being outsourced for the Mainland China and Hong Kong markets. As mentioned above, Garden does outsource through logistic companies in their delivery activities. Locally, they need to deliver their fresh breads every early morning to hundreds of retail outlets. They also need to deliver fresh buns to all McDonalds franchisees; deliver a range of fancy breads to airline caterers, hotels and restaurants. Internationally, they outsource transportation companies as well as freight forwarders for special orders such as wedding and birthday cakes. Not only that Garden wants to manufacture the best products, they also want to provide their best delivery service. Return activities: Garden guarantees its products are fresh and proper. They promise their retailers that they will replace any damaged or rotten items, that is if that happens. Garden has agreed with their retailers that they will pick up any expired items on their shelves. Assess how well the organization implements the supply chain management As mentioned right at the beginning of this report, Gardens major upstream suppliers are from the US, Canada, and Australia whereas their three biggest downstream suppliers in Hong Kong are supermarkets Wellcome, ParknShop and Mcdonalds. As far as this report is concerned, I would focus in the downstream supply chains; and before I go into how well Garden implements the supply chain management, I would like to introduce Gardens major downstream supply chains Wellcome, ParknShop and Mcdonalds. Wellcome Wellcome is Hong Kongs longest-established supermarket chain, they have an overall staff of 5,000 in more than 240 stores and serves more than 14 million customers every month. ParknShop ParknShop is one of the two largest supermarket chains in Hong Kong (the other is Wellcome Supermarket). ParknShop operates more than 260 outlets in Hong Kong, Macau, and Mainland China. ParknShop has more than 200 stores and 9,000 employees in Hong Kong. Mcdonalds McDonalds Corporation is one of the worlds largest chains of hamburger fast food restaurants, serving nearly 47 million customers daily. Most of their breads in Hong Kong are supplied by Garden. Although Garden does supply their products to airlines catering companies, hotels and restaurants, as well as supply chains such as 7 Eleven, Circle K and etc., I am not going to introduce these supply chains on a one on one basis. Basically these supply chains are owned by substantial and listed companies with well-trained management teams. Top management, as well as middle management personnel at Garden have very good business relationships with their supply chains. They have properly done legal contracts specifying all the details in supplies and payments. I have not been able to find any past news regarding any communication breakdowns between Garden and its supply chains. I have neither been able to find any past law suits about Garden suing any of its supply chains for non-payments, nor any company suing Garden for not delivering its responsibilities although there have been rumors that Garden has been finding it more and more difficult to get their payments on time during the past few years. Based on these findings, I believe Garden has been successful in its supply chains management activities. Suggest solutions/ways to improve the organization business; especially by improvements on supply chain management of the organization Supply Chain Management (SCM) is not created to suit for every company. It can succeed only with top management commitment and managers loyalty in executing those management strategies. Gardens management teams need to spend time in evaluating whether new SCM, inclusive of international networks, is suitable to be implemented into their company and how it could be successful. Garden bread has long history in Hong Kong that the fundamental target market should be the mass public served as the stable diet. With the increasing awareness of healthy eating, the variety of healthy consciousness products have been promoted like multi-grained, whole wheat, high calcium low fat breads. It is the general social trend and also serves as one of the marketing strategies that focus on the targeted middle-class, office-ladies and health consciousness customers. The relative advantage of Garden obviously is its long history and well-developed manufacturing factories, well-connected distribution channels, competitive retailing price and, of course, the well-known and long established brand name. On the other hand, these relative advantages might contribute some shortcomings in terms of the flexibility of market positioning and variety of products in response to the ever-changing and ever-increasing market force. Personally I am disappointed with Gardens decade-long use of coconut oil as an ingredient for their biscuits production. According to certain food magazines, too much consumption in coconut oil is bad for our health. Although all the reading material I found have been saying good things about Garden, nevertheless Garden is not a listed company, it is a privately owned company. They do not have to disclose any of their operation details to the public. Particularly, they do not have to disclose their financial position apart from to the Inland Revenue. My perception of Garden is that it is a very old style traditional company. Its top management includes family members of the founder. It is purely family business. Its image is not catching up with the young generation. Their product range is also conservative. It does not give any modern flare to attract those expats from the west. They focus on Asians so far, that means there is a huge expats market for them to develop. Garden reminds me of the Green, Yellow and White Arrow brands chewing gum company. The latter company has been too conservative and has not been innovative to catch up with the new entrants. Hence, Green White Arrow chewing gums have been losing market share. Until today, they have not been able to gain back what has been lost. The image of Garden should shift to focus more clearly on each market segment. For instance, Garden should develop a Gourmet production line which emphasis on the finest ingredients, the innovative design, for example in its packaging, and its advertisements. They could consider making more choice of breads, land cakes similar to those recipes from Italy and France, or from Europe at large. In order to shave off the old stable diet image, instead, the building up of the delicate and professional crafted food and to state that not only the five stars hotels can produce but Garden can also make and even better. The efforts to make sure managers do well in the SCM program and not treat it as another flavor-of-the-month include but not limited to the followings. Firstly, Garden has to ensure that the companys SCM strategies are specifically designed. Secondly, the SCM program need to meet their customers demands and reduces the companys costs. Thirdly, the management team must buy-in the program. Also, all the benefits included from the program such as customer responsiveness, more consistent on-time delivery; shorter order fulfillment lead times; reduced inventory costs; lower cost of purchased items; higher product quality; faster product innovation and etc. must be clearly explained to all the concerned managers so that they know the importance of the program. Garden must ensure that the staff concerned understand the objectives of the program, for example to better utilize the company resources and yet with higher product quality. Finally, if managers do well in implementing and executin g the program, the company should consider giving them incentive such as bonus or additional rewards other than their normal compensation. This will give them more motivation to continue to run the program. Garden has to do detailed surveys and researches to find out what are the products that their customers demand. They should listen to the voice of their customers. Their views and suggestions could in turn help the company to produce specifically the range of products the customers need. The company could also utilize their findings for meetings and discussions with their suppliers, both upstream and downstream and production managers to reduce the order processing time and inventories. The company would also be able to produce higher quality products with lower prices and less order processing time. In this way, the company would be more responsive to both their customers and suppliers. By doing the above, the company would be able to expand its market share from other competitors. Further possible improvements can be capitalized in the advances in technological and informational environment. These improvements have major implications for all industries, particularly logistics. If used effectively such advances may be a key source of competitive advantage. The technology listed below may become a competitive edge advantage for Garden in the future. Radio-frequency identification (RFID) not ready to implement? Radio-frequency identification (RFID) is the use of an object (typically referred to as an RFID tag) applied to or incorporated into a product, animal, or person for the purpose of identification and tracking using radio waves. Some tags can be read from several meters away and beyond the line of sight of the reader. It works like a barcode, but instead of having to be passed in front of a scanner for recognition, tiny transponders (known as tags or chips) send out radio signals. Each tag is small, robust and unique so any one item can be tracked individually throughout the supply chain. Logistics and transportation are major areas of implementation for RFID technology. For example, yard management, shipping and freight and distribution centers are some areas where RFID tracking technology is used. Transportation companies around the world value RFID technology due to its impact on the business value and efficiency. The new technology is currently seen as too expensive to put on individuals products, but large companies already use it to track shipping items. RFID trials have met with mixed customer reactions. As with many such technical advances the effects can be both positive and negative. RFID technology is currently unsophisticated and largely applied to logistical operations. Training of staff and informing all internal stakeholders as to how RFID technology works and can benefit the company, stating the impact on customers so that companies are able to improve their operations. Global Positioning System (GPS) The Global Positioning System (GPS) is a U.S. space-based global navigation satellite system. It provides reliable positioning, navigation, and timing services to worldwide users on a continuous basis in all weather, day and night, anywhere on or near the Earth which has an unobstructed view of four or more GPS satellites. GPS has become a mainstay of transportation systems worldwide, providing navigation for aviation, ground, and maritime operations. Installing GPS systems for delivery vehicles can increase the efficiency and effectiveness in delivering products. Even though transportation companies offer tracking and insurance services to their customers, there are still chances that the customers packages might be lost or stolen. Imagine a GPS chip attached to the delivery packages; it can then be tracked anytime. Adding this technology can boost the customers confidence about Garden. Conclusion Gardens supply chains are owned by substantial and listed companies with well-trained management teams. Garden has very good business relationships with their supply chains. Garden has been successful in its SCM activities. For further improvements, Garden should keep themselves abreast of the current important trends being developed in the business arena, for example electronic commerce has been widely used. Experienced users reveal that e-business reduces costs and time. It creates less conflict between suppliers and consumers. Garden must realize that very few industries are protected geographically; competition is getting more and more fierce. Gardens determination to change as the contents mentioned-above is critical for its advancement. With Gardens top management teams commitment, together with managers efforts, I believe that Gardens staff is more willingly to change and Garden has a good chance of success in improving its current SCM program. During the process of finding reading material for this exercise and thereafter digesting the material, I became more familiar with what supply chain management is. I will be interested in searching material for other type of companies when time permits.

Dba Financial Management Essay

1. What is Annuity kind of cash flow? Answer: Annuity is fixed sum of money paid every year in at any other fixed interval shorter than a year. This annuity may be by way of return of some principal plus interest payment of against money invested or by way of payment of other dues such as pensions after retirement. In any case it represents out flow of cash from one account to in flow of cash to another account. In this way all annuities involve movements of cash or funds. Therefore all annuities are cash flows that can be suitably represented in cash flow statements.An annuity will be represented as inflow of cash in the cash flow statement for the recipient of the annuity and out flow of cash in the cash flow statement of the person or firm paying out the annuity. 2. What do understand by Portfolio risk? Answer: In business and finance the term portfolio refers to the collection  of various investment of an individual or a firm in various bonds, stocks or other securities and instruments. Portfolio risk is refers to the extent of risk or possible variation associated regarding the amount of return the individual or the firm is likely to earn on the portfolio. Broadly a specific investment in a portfolio can be judged for its riskiness along a scale. On one end of this scale a risk less investment offers a guaranteed rate of return on the amount invested, but generally the quantity of return is low. On the other end of the scale are very risky investments which may end giving a very high return or may actually result in a heavy loss. The risk of the total portfolio is assessed on the basis of combined likelihood of variation in the combined profit or loss on all the investments in the portfolio. 3. What do you understand by ‘Loan Amortization’? Answer: Loan amortization is the process of paying back a loan over an extended duration of time along with the interest incurred. The interest to be paid for the amount borrowed, till the loan is completely repaid, is calculated in advance. This is divided by the total number of payments being made and added with the principal payments to arrive at an amount that consists of both the principal as well as the interest. The payments have to be made according to this amortization schedule, which is decided before the loan is issued and could be in the form of simple monthly or annual payments. Before the principal amount is issued, the terms for calculation of the interest are also fixed. 4. What is the Difference between NPV and IRR? Answer: The difference between net present value and internal rate of return both of these measurements are primarily used in capital budgeting, the process by which companies determines whether a new investment or expansion opportunity is worthwhile. Given an investment opportunity, a firm needs to decide whether undertaking the investment will generate net economic profits or losses for the company. The main difference however should be more evident in the method or should I say the units used. While NPV is calculated in cash, the IRR is a percentage value expected in return from a capital project. Due to the fact that NVP is calculated in currency, it  always seems to resonate more easily with the general public as the general public comprehends monetary value better as compared to other values. This does not necessarily mean that the NPV is automatically the best option when evaluating a firm’s progress. The best option would depend on the perception of the individual doing the calculation, as well as, his objective in the whole exercise. It is evident that managers and administrators would prefer the IRR as a method, as percentages give a better outlook that can be used to make strategic decisions over the firm. Another major shortfall associated with the IRR method is the fact that it cannot be conclusively used in circumstances where the cash flow is inconsistent. While working out figures in such fluctuating circumstances may prove tricky for the IRR method, it would pose no challenge for the NPV method since all that it would take is the collection of all the inflows-outflows and finding an average over the entire period in focus. Evaluating the viability of a project using the IRR method could cloud the true picture if the figures on the inflow and outflow remain to fluctuate persistently. It may even give the false impression that a short term venture with high return in a short time is more viable as compared to a bigger long-term venture that would otherwise make more profits.In order to make a decision between any of the two methods, it is important to take note of the following significant differences. Section B: Case lets CASE 1 1. Which type of financing is appropriate to each firm? Answer: – APT Inc. can go in for debt with warrants since it is nearly a zero debt company and is also willing to accept any form of security. Sandford Enterprises can go in for callable debentures since it has a low debt equity ratio combined with excellent track record of servicing debt. Its future cash flows also suggest a strong capability to service future debt. Sharma Brother Inc. can go in for issue of preferred stock considering that its fund requirements of $20 million cannot be met by debt issue. Sachetee Energy Systems can consider issue of common stock for meeting its expansion requirements. Ranbaxy Industries can issue convertible bonds or debt with warrant considering that it is averse to divesting management control. 2. What types of securities must be issued by a firm which is on the growing stage in order to meet the financial requirements? Answer: – for a company which is in a growing stage, issue of debt may be the most optimum mode of rising fresh funding, this is because future potential cash flows would be sufficient to service the debt obligation or make a premature payment. This would also be in line with the potential risk appetite of the organization to sustain its growth and earn incremental returns. Issue of equity is another option which such a company can look at. This would however depend on the management philosophy of retaining or divesting management control. A mix of debt and equity could also be a potential source of financing. Cost of raising debt or equity would be an important consideration in deciding the option. CASE 2 1. How would you judge the potential profit of Bajaj Electronics on the first year of sales to Booth Plastics and give your views to increase the profit. Answer: – Sales fluctuate seasonally and the average collection period tends to run 40 days. Bad-debt losses are less than 0.6 per cent of sales. The Perluence’s accounting dept estimated a 24 per cent markup as the average for items sold to Pucca Electronics. Bajaj Electronics, in turn, resold the items to yield a 17 per cent markup. Bajaj Electronics incurred out-of pocket expenses that were not considered in calculating the 17 per cent markup on its items. James would receive a 3 per cent commission on all sales. a commission paid whether or not the receivable was collected. In addition to the sales commission, the company would incur variable costs as a result of handling the merchandise for the new account. As a general guideline, warehousing and other administrative variable costs would run 3 per cent sales. First of all, he considered the potential profit from the account. James had estimated first-year sales to Booth Plastics of $65,000. Assuming that Neck Booth took the, 3 per cent discount. Bajaj Electronics  would realize a 17 per cent markup on these sales since the average markup was calculated on the basis of the customer taking the discount. His department probably spent three times as much money and effort managing a marginal account as compared to a strong account. He also figured that overdue and uncollected funds had to be financed by Bajaj Electronics at a rate of 18 per cent. 2. Suggestion regarding Credit limit. Should it be approved or not, what should be the amount of credit limit that electronics give to Booth Plastics. Answer:- Strand Electronics has 950 employees and handles a volume of $85 million in sales annually. About $6 million of the sales represents items manufactured by Perluence. He supervises five employees who handle credit application and collections on 4,600 accounts. The accounts range from $120 to $85,000.Thefirmsells on terms, with 2/10, net 30 mostly. Sales fluctuate seasonally and the average collection period tends to run 40 days. Bad-debt losses are less than 0.6 % of sales. The company was founded in 1977 by Neck and has grown steadily. The Perluence’s cost-accounting department estimated a 24 % markup as the average for items sold to Pucca. Bajaj, in turn, resold the items to yield a 17 per cent markup. Bajaj incurred out-of pocket expenses that were not considered in calculating the 17 per cent markup on its items. James would receive a 3 % commission on sales made to Booth, a commission that would be paid. a general guideline, administrative variable costs would run 3 %. James estimated first-year sales to Booth of $65,000.Assuming that Neck took the, 3 percent discount. Bajaj would realize a 17% markup on these sales since the average markup was calculated on the basis of the customer taking the discount. If Neck did not take the discount, the markup would be slightly higher. In addition to the potential profit from the account. He also figured that overdue and uncollected funds had to be financed by Bajaj at a rate of 18 %. All in all, slow paying or marginal accounts were very costly to Bajaj. SECTION C 1. Honey Well Company is contemplating to liberalize its collection  effort. Its present sales are Rs. 10 lakh, its average collection period is 30 days, its expected variable cost to sales ratio is 85 percent and its bad debt ratio is 5 per cent. The Company’s cost of capital is 10 per cent and tax are is 40 per cent. He proposed liberalization in collection effort increase sales to Rs. 12 lakh increases average collection period by 15 days, and increases the bad debt ratio to 7 percent. Determine the change in net profit. Answer:- At 85 percent variable cost the gross contribution of various costs including cost of bad debt and and capital cost amount tied up as receivables to be collected will be 15 percent of the sales. From this contribution of 15 percent all other expenses except the bad debt and cost of capital tied up in receivable will change. Therefore we can calculate the impact of liberalization in collection on profit as follows. Original Amount Changed Amount 1. Sales [per year] 1,000,000 1,200,000 2. Contribution [15% 0f (1)] 150,000 180,000 3. Receivable [(1)*Days/365] 82,192 147,945 4. Cost of receivables [(3)*0.1] 8,219 14,794 5. Cost of bad debts [(1)*%] 50,000 84,000 6. (4) + (5) 58,219 98,794 7. Balance Contribution (2) – (6) 91,781 81,206 ———————————————————————————- We can see from above table that that the balance contribution available will decrease by Rs. 10,575 from Rs. 91,781 to Rs. 81,206. The profit before tax will also reduce by the same amount. The reduction in profit after tax will be: Reduction in profit after tax = 10575*60/100 = Rs. 6345 2. Explain the concept of working capital. What are the factors which influence the working capital? Answer:- The management of the current assets deals with the determination, maintenance, control and monitoring of level of all the individuals current assets. Current assets have short life span. Each current asset is swiftly converted into other assets forms. The  existence and necessity of current assets is implied for the efficient and optimal use of the fixed assets. This project reveals the various aspects of working capital management in general, and also at the same time sneaks into the practical aspect of applying theoretical concepts of the company. The importance of working capital management is reflected in the fact that financial managers spend a great deal of time in managing current assets and current liabilities. These include arranging short term financing, negotiating favorable credit terms, controlling the movement of cash, administering accounts receivables and investing short-term surplus funds. For the analysis part, the data collection was done by primary and secondary sources where the primary sources includes the personal interaction with the industry guide and secondary sources includes external and internal sources involving company annuals. Thus the presentation of data collected was done in the form of graphs and tables. In summer training; I was given the project related to working capital management and CMA forms which were discussed later in the project. For this purpose, I regularly interacted with my industry guide and the other staff of the Corporate Finance Department. For the preparation of the project, I had a look on the company profile and made a plan by going through its previous accounting reports. Then, I had analyzed the plan and accordingly I filled the CMA forms and projected as per the instructions of my industry guide.The basic objective of this project is to know the factors that determine the working capital requirements and to analyze the different approaches available for the financing. Basically, working capital is composed of various items. Most of the time you got inventories and retained profits. According to the US GAAP (Generecally accepted accounting principles), the inventories must follow any appreciation (or depreciation) of the items in inventory. Let’s say that you have a pencil in your company’s inventory whose value is US$1, 00. If from October 2008 to November 2008 the value of the pen would go from US$1,00 to US$1,20, your working capital would be affected in 20%. On the opposite, if the value had dropped to US$0,80, your working capital would have depreciated in 20%. But this is according one of the many accounting principles. On the other side, if you have money invested in any kind of product or fund, you have to adjust properly, reflecting its appreciation or depreciation. But in this case, other factors play an important role.

Is Communication Inevitable Essay

What is communication? There are many meanings that can be given to communication. People always give their own meaning for communication. Communication is like a double-acting hinge, swinging outward to release your own ideas and swinging inward to receive the worthy thoughts of others. (Huish,S.) Communication is the process by which a person, group, or organization transmits some type of information to another person, group, or organizations. Is communication inevitable? Communication is something that takes place every minute in our daily lives. It is very difficult for somebody to pass a day without communication. Communication can take place verbally and non-verbally; so however it happens communication is still taking place. Communication is inevitable because communication happen even if we want it to happen or not, communication must take place whether it is verbal, nonverbal or both and communication is something that places a vital role in our life. Firstly, communication is inevitable because communication happen even if we want it to happen or not. Communication is something that takes place without we even noticing it sometimes. Sometime we go through things in our daily lives that discourage from communicating; no matter what we do you will have to communicate. People try to fight from communicating with others but it is really difficult. Is it possible for someone to go a day without communicating? This is really a tricky question. Communication is something that is really hard to run from. Everybody use communication in their daily life, it might not happen every minutes but eh do happen in their daily bases. Secondly, communication is inevitable because it must take place whether it is verbal, nonverbal or both. Verbal communication is the transmission of messages using words, either written or spoken. Nonverbal communication is the transmission of messages without the use of words. An example of verbal communication would be like say Hi, Bye or Hello and some example of nonverbal communication would be like waving your hand, smiling or nodding your head. Sometimes when people communicate they would  prefer to communicate both verbal and nonverbal. They find it more effective and understandable. When some people communicate using nonverbal communication the message is sometimes interpret the wrong way. Thirdly, communication is something that places a vital role in our life. Communication is something that must take place in our life. We can’t live our daily live without communicating. Communication takes place at home, school, work place and more. Communication is important, not communication is like not having a life, and you can’t live without it. Communication plays a vital role in our life because it helps us to learn, understand, and achieve different things. To conclude, communication is important and no matter what we do we can’t avoid from communicating with others. Everybody communication in their daily lives and it can happen verbally, nonverbally or both. Communication is just sending message from one person to the other. Communication is inevitable because communication happen even if we want it to happen or not, communication must take place whether it is verbal, nonverbal or both and communication is something that places a vital role in our life. Always remember that whatever you do that you can never escape from communicating with other. You will always have to communicate even though you wish not to.

Black People and South Africa - 860 Words

The movie invictus portrays a very controversial issue that has been presented throughout history in many ethnic groups and is seen in societies up to these days. The apartheid is clearly pictured in the movie through many of the attitudes and actions that people take towards the other race they live in their day by day. What is more, Mandela constitutes one of the most important figures in South Africa, especially for the black race as he liberated themî€  from the apartheid. From those days Mandela has been recognized worldwide as a major symbol of the rainbow nation; a reality of distinction between the black and the white people and its establishing differe nces. In the movie, it is highly represented the context in which two†¦show more content†¦But as Nelson fought for having a rainbow nation through the rugby, colour people started to change their minds and support their country as they didnî€ t do before. They lea rned to play the sport; they waved the Spring Boks flag and the South African one and also shared the passion for the game with all the African population. The distrust that the white people had towards Nelson Mandela made a twist when he went directly to the important symbol of them, the rugby. All he learned about the other culture was while he spent time in prison, the strategies that he used to make a better country all came to him with the time, and with the 27 years that he had to think while he was alone in his cell. All in all, the movie Invictus is a great demonstration of the history of apartheid that the Republic of South Africa suffered, and also how the powerful symbol of it, Nelson Mandela, fought to reach the end of it, and to reinforce the country, so they could have a rainbow nation, a nation with equality in theirShow MoreRelated1. The History Of The Black People Of South Africa Is Currently1712 Words   |  7 Pages1. The history of the Black people of South Africa is currently and scientifically reported to extent back to some of the oldest human species on Earth. For example, 2.5 million years of human evolution occurred on the territory of South Africa. Approximately, 125,000 years ago the modern human era developed around the Klasies River Caves, a region in the Eastern Cape of South Africa in the Middle Stone Age. The hunter-gathers San and pastoral herders Khoikhoi people developed in the Middle PaleolithicRead MoreNelson Mandela s Legacy Of The Black People Of South Africa1 567 Words   |  7 PagesNelson Mandela was a leader in every aspect for the black people of South Africa from the minute he was born to the minute he died. While Nelson Mandela was on trial for sabotage, [a crime that he did not actually commit] he said these words that defined his legacy until the day that he died, â€Å"During my lifetime I have dedicated myself to this struggle of the African people. I have fought against white domination, and I have fought against black domination. I have cherished the ideal of a democraticRead More South African Apartheid Essay1499 Words   |  6 Pages Have you ever wondered how it would feel to be considered inferior because of your race? The people of South Africa had to endure racial inferiority during the era of apartheid. The apartheid laws the government of South Africa made led to an unequal lifestyle for the blacks and produced opposition. South Africa really began to suffer when apartheid was written into the law. Apartheid was first introduced in the 1948 election that the Afrikaner National Party won. The plan was to take the alreadyRead MoreImperialism In South Africa Essay1299 Words   |  6 Pagesit brings only conflicts and not peace. Africa has been one of the largest places to experience imperialism. Imperialism has affected Africa in many ways for a long time. However, one specific example of how imperialism brought anguish to people is the country of South Africa. An abundance of resources, but particularly diamonds, lead British businessmen and politicians to South Africa. The clash of the beliefs, traditions, and ethics of the the native blacks and whites the lead to tensions and conflictsRead MoreApartheid : A System Of Racial Segregation1176 Words   |  5 Pagesracist political policy in South Africa demanding division of the country’s white and non-white populations for nearly 50 years. In 165 2, a group of people from the Netherlands settled in South Africa. The Netherlands are also known as Holland, and the people who live there are Dutch. These settlers came to be known as Boers because Boer is the Dutch word for farmer. It was the domination and influence of the white South Africans over the Black South Africans. The white South African’s believed theRead MoreHow the Apartheid Came to Be in South Africa1184 Words   |  5 PagesIn 1948, apartheid was introduced to South Africa. Apartheid means apartness and is the political policy of racial segregation. Each racial group was segregated from other races within South Africa. These groups consisted of whites, blacks and coloreds (Asians and Indians). The minority white population had the rule over the whole country. Apartheid did not only detach whites from non-whites, but it also set apart the Blacks from the Coloreds. When apartheid ended in 1994 a legacy was leftRead MoreThe Current State Of South Afri ca1175 Words   |  5 PagesBACKGROUND ON SOUTH AFRICA 1. South Africa was called the hopeless continent 16 years ago. Much of the negative world view stemmed from wounds created by government supported racial segregation which continues to affect South Africa’s economy today; however, the abundant resources and potential economic growth of this country should not be overlooked. Despite wounds from its past South Africa has a wealth of resources which make it an important country to the world and to the United States. South Africa’sRead Moreâ€Å"Awaking on Friday morning, 20 June 1913, the South African Native found himself, not actually a1100 Words   |  5 Pages1913, the South African Native found himself, not actually a slave, but a pariah in the land of his birth† (Gish 18). Desmond Tutu is one of the greatest rabble-rousers for peace that there ever was. He maintains huge political and religious influences even to this day. Most people in South Africa and many more countries hear his voice. His impact on fix ing the apartheid system in South Africa was a major one. This apartheid system was very segregated towards whites and blacks in South Africa. BlacksRead MoreThe Roots of Apartheid: South Africa’s Colonial Experience Essay1673 Words   |  7 PagesIn recent years, there have been efforts to understand the institution of apartheid in South Africa. From the Truth and Reconciliation Commission, to general study into the history of South Africa, much scholarship has been devoted to the study of the effects of apartheid and the atrocities committed in the post-World War II period. However, one topic remains largely un-researched—the origins of the vast apartheid structure instituted by the Herenigde (Reunited) National Party (HNP) in the late 1940’sRead More Nelson Mandela Essay example849 Words   |  4 PagesAparthied From 1948 to 1994 apartheid was enforced in South Africa. Apartheid was the name given to a form of legal segregation is South Africa. Apartheid first came about in 1948 when South Africa’s National party took power. South Africa’s government broke the country’s population into four groups. Those groups were the whites, who consisted of approximately 13 percent of the population, Africans, who were 77 percent of the population, people who were of mixed descent comprised eight percent of