Business and Management

Research a specific company of your choice and identify some of the managerial decisions that were made over time and in response to changes in its market or competitive environment. Use Ashford University Online library and web-based resources for your research. At least 3 external resources must be used. Address all of the following areas:

Focus of the Final Paper

Describe the company and provide a brief history of its operations. Find or use graphs to illustrate its financial performance over the years.
Identify any sources of risk or uncertainty in its operations. Do the financial reports indicate risky or uncertain activities or changes to the economic environment that ultimately appear to have affected the company’s financial outcomes? Be specific.
Are there any government regulations that have affected this company’s operations domestically or abroad? Explain.
Describe the inputs that are used in this company’s production function and identify any challenges to securing these inputs.
Determine if the company has introduced new products in existing markets or created new markets over time. What is the impact on its finances?
Determine if the price of its products increased or declined over time and analyze the reasons for price fluctuations. Study the demand elasticity for its products and discuss the availability of close substitutes for its products. How does that affect pricing decisions?
Analyze the company’s profitability. Identify the economy or industry influences on its costs, operations, and profitability.
Describe the competitive environment in which the firm operates, the distribution of market power, and the strategic behavior of the firm and its competitors. Apply your knowledge of the theory of this company’s market structure. How does the company make pricing and production decisions? Is your observation supported by the theoretical models? Refer to the financial reports for illustration.
Identify any non-price competitive strategies that the company might be engaging in? Provide specific examples.
Evaluate if the company made any mistakes in its decisions over time, and recommend any changes or improvements for the future operations. Refer to the financial reports when making specific observations or recommendations.
Use economic language and demonstrate your understanding of the concepts and theories of this course.

Writing the Final Paper

The Final Paper:

1. Must be 8 to 10 double-spaced pages in length, and formatted according to APA style as outlined in the Ashford Writing Center.

2. Must include a title page with the following:

a. Title of paper

b. Student’s name

c. Course name and number

d. Instructor’s name

e. Date submitted

3. Must begin with an introductory paragraph that has a succinct thesis statement.

4. Must address the topic of the paper with critical thought.

5. Must end with a conclusion that reaffirms your thesis.

6. Must use at least 3 scholarly sources.

7. Must document all sources in APA style, as outlined in the Ashford Writing Center.

8. Must include a separate reference page, formatted according to APA style as outlined in the Ashford Writing Center.

After reading this article, formulate an argumentative essay around the following thesis statement: Article- http://journals.cluteonline.com/index.php/JBER/article/view/2471/2517
Cattaraugus County ReHabilitation Center did an effective job of implementing a balanced scorecard approach in a fashion that reflects their organizational mission and vision. If you do not think this thesis is accurate, you can argue that the Center did not do an effective job.
Expectations:
Introduction: set up your argument by introducing your topic and presenting your position or thesis statement somewhere in this introductory paragraph.
Analysis: present several arguments arguing in favor of your thesis statement. discuss how the Center used the score card quadrants to align with organizational strategy (or how it failed to do so).
Conclusion: Wrap up your argument with a clear and cogent synopsis of your findings.

3 Pages

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True/False Questions: Circle the correct response. (2 points each)

1.	T	F	If a sole proprietorship fails, the owner may lose whatever was invested in the business, but the owner’s personal assets are not at risk.
2.	T	F	A company that has an increase in its return on assets, but no noticeable change in asset turnover, has most likely experienced an increase in financial leverage.
3.	T	F	If a firm is not operating at full capacity, assuming assets grow with sales will likely overstate the firms funding needs.
4.	T	F	A firm with many growth opportunities would likely have a book value less than its market value.
5.	T	F	Joel (the owner) at Dave’s Cosmic Subs decides to get a diamond-encrusted sandwich toaster. This would be an example of an indirect agency cost.
6.	T	F	A grocery store will likely have a higher days’ sales in inventory than a car dealer.
7.	T	F	A Stakeholder is a group or individual who benefits from or is harmed by corporate actions.
8.	T	F	Many software firms capitalize (treat as an asset) the development costs associated with creating new software products. One motivation for doing this is because it increases accounting earnings.
9.	T	F	If a firm sells part of its inventory at a loss, its quick ratio will increase.
10.	T	F	A firm wants to boost sales and reduce inventory so they lower the price of
			their product. All else equal, this will likely lower their profit margin and decrease total asset turnover.
11.	T	F	Tech firms tend to have higher market-to-book ratios than brick-and-mortar firms.
12.	T	F	If a firm uses accounts payable to purchase a new fixed asset, this will make the current ratio move away from one.
13.	T	F	Manufacturing firms will likely have smaller differences between their Times Interest Earned and Cash Coverage Ratios than consulting firms.
14.	T	F	In the secondary market, investors trade previously-issued securities without the involvement of the issuing companies.

15.	T	F	If a firm’s growth in sales is higher than its sustainable growth rate, it will either need to raise money from equity or accept a higher level of financial risk (leverage).
16.	T	F	If a firm pays off accounts payable using cash, this will result in a decrease in its net working capital.
17.	T	F	It’s uncommon for firms to have P/E Ratios above 200.
18.	T	F	Initial Public Offerings take place in the primary market.
19.	T	F	For firms with no debt, the sustainable growth rate and the internal growth rate will both be zero.
20.	T	F	You are interested in purchasing stock in a publicly traded company. You (or your broker) would most likely purchase the shares in the primary market.

Multiple Choice Questions: Circle the correct response. (4 points each)

21.

A firm has a book value of assets of $117 billion, 10.3 billion shares outstanding, and a market price of $38 per share. The firm has $16 billion in cash, and total debt equal to $47 billion. What is the firm’s market to book ratio?

1. a.               0.18 b.               0.30

3. c.                 3.35 d.                 5.59 e.                 6.48 f.                 7.25

22.

A firm has a profit margin of 13% and return on equity equal to 27%. The firm’s debt to equity ratio is 0.72, and its total assets are $43,940. Compute the firm’s level of sales.

a. $ 15,232.53 b. $ 36,388.83 c. $ 53,058.14 d. $ 78,988.56

23. 23. A firm’s ROE last year was 8%. A new plan calls for a Total Debt Ratio of 40%, which will result in interest charges of $10,000 per year. Management projects an EBIT of $24,000 on Sales of $280,000 and it expects to have a Total Asset Turnover ratio of 1.8. Under these conditions, the average tax rate will be 34%. What will the ROE be this year?

3. a) 3.06% b) 5.94% c) 9.00% d) 9.90% e) 15.00% f) 31.43%

24.

This year, a firm had earnings per share of $8 and dividends per share of $2. The addition to retained earnings was $12 million during the year, while book value of equity per share at year-end was $40. If year-end total debt was $120 million, and no new common stock was issued during the year, what was the company’s year-end total debt ratio?

1. a.       0.47 b.       0.54 c.       0.57 d.       0.60 e.       0.72 f.       0.75 g.     0.87

25.

Highland Bakery maintains an inventory of flour worth $644. It has sales of $164,000 and a total bill for flour over the course of the year of $16,744. How old on average is the flour in the bread it sells its customers?

1. a.     14 days b.     16 days c.     18 days d.     20 days

1. 22 days f.     24 days g.     26 day

26. 26. (20 points) The managers of Icona Inc. have made the following predictions for 2014.

• Sales will grow at a rate of 32% during 2014
• Operating costs and cash balances will also grow with sales.
• They would like to manage their inventory more efficiently by reducing day’s sales in inventory to 180 (use a 360-day year for your calculation)
• A purchase of $28,800 in new fixed assets are required to accomodate the growth in sales.
• Accounts payable and Accounts Receivable will grow with sales
• The interest rate on short-term debt is 10% and the interest rate on long-term debt is 12%. The tax rate is 34%.
• The managers would like dividends to increase by 8% relative to the previous year.
• The managers prefer new external financing to come from Notes Payable, then Bonds if necessary, and then Equity as a last resort. Their bankers have insisted that for 2014 the current ratio not fall below 1.6 and the total debt ratio not exceed 0.46 (assume these Prepare Pro Forma Statements for 2014. Round to penni

27. 27. (14 points) ABC Tech Corp has 6.5 billion shares outstanding and a share price of $1 The company is considering developing a new software product in-house at a cost of $500 million. Alternatively, the firm can acquire a firm that already has the technology for $900 million worth (at the current price) of ABC stock. Suppose that absent the expense of the new technology, ABC will have EPS of $0.80.

1. a) Suppose the firm develops the product in house. What impact would the development cost have on the ABC’s EPS? Assume all costs are incurred this year and are treated as R&D expense; ABC’s tax rate is 35%, and the number of shares outstanding is unchanged.

1. b) Suppose ABC does not develop the product but instead acquires the techn What effect would the acquisition have on ABC’s EPS this year? Note that the acquisition expenses do not appear on the income statement, and assume the acquired firm has no revenues or expenses of its own, so the only effect on EPS is due to the change in number of shares outstanding.

1. c) Which method of acquiring the technology has smaller impact on earnings? Is this method cheaper? Explain (one or two sentences is fine).