Aperture Cameras consistently returned the highest net income (Fig.3), which provided the base for strong earnings per share (EPS) and return on equity (REO). For example, Year 6 earnings per share was $3.57 and increased in each subsequent year, ending Year 12 at $7.25. The improved EPS was accomplished with providing consistent well thought out modifications to the business model and not significant stock repurchase. The company did strategically make annual stock repurchases starting in Year 8. Return on Equity (ROE) was maintained at a consistent weighted average of 23.7, representing the average of ROE from a low of 21.0 to a high of 27.1. Management elected to operate the company with sound business principals and avoid aggressive changes in the balance sheet and/or P&L, which could dramatically swing the ROE.
It was management’s opinion what consistent reliable business practices would add a sense of security to the company’s operations, employees and shareholders. The financial consistency of the company provided shareholders with comfort in their investment with the stock price at $43.92 in Year 6 and steadily rising to $128.11 by Year 12. As previously noted, the financial results were accomplished by providing consistent high net earnings on its operations each accounting year. The company did not incur long term debt and operated its business without having to utilized its bank operating line of credit (no interest cost), thus maintaining a healthy
The Corporation's performance metrics highlights three significances for raising shareholder value: returns, leverage, and growth. The Corporation's main concern of growth concentrate on sales through similar companies or club sales and unit square feet growth; the importance of leverage incorporates the Corporation's objective to raise its operating income quicker than the growth rate in net sales by increasing its administrative expenses, selling, and operating expenses, at a measured rate than the progression of its net sales; and the importance of returns emphasizes on how proficient the Corporation engage its assets through return on investment also, how efficiently the Corporation achieves working capital and capital expenditures through free cash flow. (See Figure
Higher interest rates, levels of unemployment, consumer debt levels, and unsettled financial markets are general economic factors that can adversely affect the company’s financial performance. These key elements play an important role in how a company chooses to move forward operationally and financially. Therefore, it’s imperative that we as investors understand a company’s business strategy as well as have a general knowledge of issues which may impact their decisions. Prior to investing, we should review a company’s operations, stock price, and their
In the financial decision, probably not paying enough dividends was our biggest issue in term of finance. We were not able to find the balance between investing in the growth of the company and providing fair dividend to our stakeholders. By looking at our final performance we could have easily provide a higher dividend, which would have shown the stability and good financial position of our company and increase our ROE.
The board decided that the company should be judged on its ability to make a profit, gain market share, provide positive ROA and make money for our shareholders with an increasing stock price. Our target was a stock price of $38
The income over the last three years has been fluctuating.. This tells us the company has an initial growth period. Sales also drop between years 7 and 8 and the gross profit margin decreased as well. This may be due to operating expenses. This leads to the prospect of stable future sales. The stakeholders are continuing to back the company and the company does predict sales will remain stable. The modest increase in sales does not show enough to recover without making adjustments to free capital.
It is working efficiently within its resources and does not require any additional funds from outside resources for its operations. Its plan to pay off its debt by applying the company’s profits to repay long term debt is a good plan for the company to lessen incidental expenses that relates to it. The company should regularly review its performance and match it against the industry mark in order to ensure that it is functioning at an optimum and effective level which is beneficial to its
Life through the Lens focuses on producing a quality product at a reasonable price for both our entry-level and multi featured cameras. In order to ensure our cameras are of the highest quality we spend large amounts of money on R&D every year; having spent $4 million on multi-featured camera R&D in year 12 alone. For our workers, we pay them a yearly wage of $21,091 with a 1% raise minimum every year (reaching $21,302 in year 13). They also receive a $2.00 bonus per unit in order to reduce warranty claims, and keep both worker and customer satisfaction high. We’ve had a positive affect from our incentive bonuses given out because our warranty claims have decreased. To ensure workers are on time and are working to full capacity, we reward PAT members with $45 per quarter bonus for perfect attendance. We also seek to maintain a positive public image through “going green” with our products and production line, having spent $2 million on “green initiatives” in year 12. We’ve won the Gold Star Award two years in a row for corporate citizenship due to our large charitable contributions
Exhibit 4 gives a good analysis of how these policies have affected the business’ performance and situation. Although sales growth has been consistently large, operating profit margin has decreased overall since his strategies were implemented. Return on equity and net assets have increased and in the year 2000 were 10.3% and 8.4% respectively. This is a good result for the business and shows efficient management of assets.
The purpose of this report is to analyze Target Corporation’s financial statements, determine the future growth potential of the company, and make a recommendation for or
During this time, sales increased from: $7.11 billion in 2010 to $7.99 billion in 2012. Earnings improved from $2.84 to $3.57. While the total amount of dividends rose from $1.00 to $1.72. These figures are showing how the company has been continually increasing sales, earnings and dividends over the last three years. In the future, the management predicts that their current strategy will increase returns. As, executives believe that their focus on building the brand and accounting for costs will lead to net earnings of $5.20 to $7.19 annually by
Referring to Vice President of Finance, he want to pursue the current approach because they are in profitable based on contribution margin by 35 percent. The company just needs to monitor their margin in control their cost well.
As the financial analyst of the company, this report is written in respect to how the financial position of the company can be improved. This report is aimed for the senior management team.
Review of Financial Research Report: This assignment is an analysis of a US publicly-traded company; its common stock could be a prospective investment. The report is due in Week 10, in needs to be at least 5 pages, and it needs to cover the following topics:
Excellent financials, low debt load, 2001 was the 16th consecutive year with record performance. Price/earnings ratio is positive.
Our choices led to a constant increase in net income over the three years. Short term debt increase by approximately 100% percent but steadily reduced over the next three years. We were happy with the positive growth of the company and the fact that we were able to pay off most of the initial short term funding required by the increase in working capital requirement. Overall the current situation of the company in 2018 is good, although the total value created is less than 20% of that created in phase 1. From this we learned that the value of the firm can be significantly increased more through a reduction in working capital requirement than through increasing the firm’s sales and net income.