...bru6171X_case02_023-038.qxd 11/24/12 2:24 PM Page 23 CASE 2 Bill Miller and Value Trust Bill Miller’s success is so far off the charts that you have to ask whether it is superhuman. Quite simply, fund managers are not supposed to be this good. Is it mortal genius, or is it celestial luck?1 By the middle of 2005, Value Trust, an $11.2-billion mutual fund2 managed by William H. (Bill) Miller III, had outperformed its benchmark index, the Standard & Poor’s 500 Index (S&P 500), for an astonishing 14 years in a row. This record marked the longest streak of success for any manager in the mutual-fund industry; the next longest period of sustained performance was only half as long. For many fund managers, simply beating the S&P 500 in any single year would have been an accomplishment, yet Miller had achieved consistently better results during both the bull markets of the late 1990s and the bear markets of the early 2000s. Over the previous 15 years, investors in Value Trust, one of a family of funds managed by the Baltimore, Maryland–based Legg Mason, Inc., could look back on the fund’s remarkable returns: an average annual total return of 14.6%, which surpassed the S&P 500 by 3.67% per year. An investment of $10,000 in Value Trust at its inception, in April 1982, would have grown to more than $330,000 by March 2005. Unlike the fund’s benchmark, which was a capitalization-weighted index composed of 500 widely held common stocks, Value Trust only had...
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...Case Three CHEF’S TOOLKIT INC. Cash Budgeting 企业现金需求分析和预算 1 Case Explanation: cash budgeting History: Jefferys, invention of Pasta server Production: data Marketing: data Financial Implication: data Data: Composition of Canadian Households; Balance sheet(July 15, 1994) Jefferys Personal balance sheet (July 15, 1994) Production Schedule in Unit 2 Study Questions Q1：What is the Case? (1)event?(2)Companies?(3)Persons?(4)Time? What is the problem?(5)Why is the problem?(6)Possible Solutions? Q2：Analyses (1) Background of Chef’s Toolkit Inc. ? (2) CV of managers? (3)What is the invention? (4)Company Size-up: production, marketing, and financial status? Q3：Budgeting(monthly sales : 10,000; 5,000; 30,000): production schedule, cash budget, Pro-forma income statement, Pro-forma balance sheet Q4：How can the firm avoid loss? Break –even calculation? Q5: How much money do the firm need for financing? Should Dale Raid invest? What are his risks? 3 Case Summary（案例） M r. P eter Jeffery President of Chef’s Toolkit Inc. M r. Dale Reid Private Investor 风险投资家 Obtain funds to start manufacturing and marketing a new pasta server. 4 Case Summary（案例） Produce Sell Chef’s Toolkit Inc. Pasta Server 意大利通心粉 Chef or Housewife 5 Objectives（目标） Produce projected income statements, balance sheets, and cash flow statement up to July 31, 1995. 预计财务报告 Obtain fund from Dale Reid. 6 Why Budget? 预算 If you know where you are going...
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...McDonald’s MCD: McDonald’s Corp (NYSE) Case Study Worksheet and Template Version 0.0: 1-9-2015 Presented by: Ashley Westbrook Worksheet Company information Name | McDonald’s Corporation | Address | 2111 McDonald’s Dr. | City, state, ZIP Code | Oak Brook, IL 60523 | Phone number | 1 (800) 244-6227 | Biography: McDonald’s has been serving the community since 1955, making billions in revenue and serving over 62 million customers daily. McDonald’s focuses on providing affordable fast dine-in food—burgers, shakes, and fries, The Mac Brothers, Dic and Mac McDonald, were approached by Ray Kroc to make the corporation what it is today. McDonald’s history includes operating in 119 countries since 2011, celebrating its 50th anniversary in 2005, and one of its signature meals, the Happy Meal, turns 25 years old. McDonald’s has a global structure, and it’s business structure includes CEO, President and branches off to Purchasing Department, Personal Development, Vice President Operations and Chief Financial Officer and starts to become catered to the main fast food chain with Managers. Even the international markets have individual Presidents. McDonald’s main products and services include their menu which involves selling hamburgers, shakes, fries, and other fast food items and international growth. With it having a global structure, McDonald’s is located almost everywhere. The fast food chain is located in United States, Canada, Australia, Japan...
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...Will Semsch 17/02/2015 Case Study #1 In offer number one you would receive $1,000,000 now, $200,000 from year 6-15, then 3,000,000 if the product did $100,000,000 in sales, which had a 70% probability. To calculate to present value of 3,000,000 in 15 years you first have to multiply it by the possibility, 0.7 giving you 2,100,000. I then used the equation. 2,100,000* 1/(1.1)^15 giving an answer of $502,723.30. After that I calculated the value of the ordinary annuity from year 6-15 by using the equation 200,000*1/(1.1)^6 with the exponent increasing by one for each year. The annuity came to a total of $763,058.55. Once I added up all three payments it comes to a total present value of $2,265,781.85. Year | Payment | Present Value | 1 | $360,000 | $327,272.73 | 2 | $504,000 | $416,528.93 | 3 | $705,600 | $530,217.72 | 4 | $987,600 | $674,544.09 | In offer two 30% of the Bayer pharmaceutical profits were offered per year for four years. Bayer’s gross profit margin was 60% and sales were expected to increase 40% each year, with the expected first year sales of $2,000,000. With all that said here was what the payments would look like over four years. I used 1 as the “N” which increased by one for each payment. The payment amount I used as future value and 10% interest. This offer results in a total cumulative present value of $1,948,563.47 For offer number three I found the present value to be $2,275,931.61. To find this I used 16 as the total number of...
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...FIN 6310 Case Studies Purchase Case Studies (4) • Harvard Case Studies (2) o Courses available at o https://cb.hbsp.harvard.edu/cbmp/access/18322840 • Ivey Case Studies (2) o Register for an account at Ivey Cases https://www.iveycases.com/RegisterUser.aspx o Put the following two cases studies in your cart. Make sure Digital Download is selected which will cost $3.40 per case. o Burgundy Asset Management: The Wescast Investment Decision https://www.iveycases.com/ProductView.aspx?id=31479 o Valuing Wal-mart 2010 https://www.iveycases.com/ProductView.aspx?id=48332 o Download the Wal-mart case spreadsheet for free. o Valuing Wal-mart 2010 – Spreadsheet for students https://www.iveycases.com/ProductView.aspx?id=52705 Case Report Guidelines 1. Place case title at top of first page with team member names (maximum four members per team). 2. Answer questions in numerical order. 3. Include graphs and tables if appropriate. 4. Print out case report and hand-in at the beginning of class. Harvard Management Company (2001) Questions 1. Is HMC’s recent payout policy consistent with the goal of preserving the real (adjusted for Harvard’s expense growth) value of the endowment and its distribution into perpetuity? 2. Could payout be raised to meet recent budget pressures without changing the risk-return profile of the portfolio? 3. What value has the HMC’s policy portfolio...
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...Corporate Finances Case Study Negative Cash Flow This is the phenomenon most common with the business when they experience several expenditures that surpass the earnings of the business thus resulting into a deficit in meeting some of the business financial obligations. This situation is most common with the business in the first and second years (Ross, Westerfield & Jordan, 2011). When the situation arises, some businesses will resort to loans and equity financing as a way of mitigating the crisis of the business. With view of the Mason Corporation, a prognosis can be done to see into it that the business will be in a financial crisis given the financial trend observed. In this case, the business has to take some precautionary measures to cushion the business form such financial meltdown. In a business, it does not matter the amount of profit your company is making in a day, a month or quarterly, the most important thing to ensure is the continuity of the cash flow of the business. In this case a cash flow forecast is important and an integral part of any business successes. Without doing the forecast, one is destined to have problems in paying suppliers as well as meeting the basic business financial obligation and this will results into failure of the business to operate (Ross, Westerfield & Jordan, 2011). In this regard based on the information of the cash flow of the business, there are several options open for the business to evade the financial crisis. There are...
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...1. Using the historical data as a guide, construct a pro forma (forecasted) profit and loss statement for the clinic's average month for all of 2014 assuming the status quo. With no change in volume (utilization), is the clinic projected to make a profit? The below pro forma profit and loss statement states that the clinic is currently operating at a loss of $3,173 per month, considering that subtraction of fixed and variable costs. The contribution margin per month totals $48,138 or divided out equals to $35.67 per visit. The hospital is not sustaining itself at this point or even paying for its fixed costs. 2. Now consider the clinic's situation without the new marketing program. How many additional daily visits must be generated to break even? Construct a breakeven graph that can be included in your report. Without the new marketing plan, the clinic will need an additional 19.8 - 20 patients each day to break even. 40.66(net revenue/visit)X =79,059 X= total number of visits that are needed to break even X= 1944.39 1944 Average # of JanFeb 1,350 visits 3. Repeat the Question 2 analysis, but now assume that the new marketing program is implemented. With the new marketing plan, the breakeven point is at an additional 32 patients visits per day. 40.66(net revenue per visit)X =93,861 (92,511-1350,)/30days= 31.94patients per day 32 patients per day 4. Now focus solely on the expected profitability...
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...GCC P. 28 GIF Magazine Special Report: Takaful in 2010 and Beyond P. 23 gif Interview Interview with Dr. Alberto Brugnoni: “Islamic Finance is not the exception, but the rule of normal financial behaviour” . Dr. Alberto Brugnoni is an international consultant in Islamic finance and ethics and is Founder and Director General of AASAIF, an organisation that participates in some of the most important international initiatives in Islamic finance. Dr. Brugnoni acted as Chair for the recent International Takaful Summit 2010 in London and moderated the session entitled “Enabling and Expanding the Scope of Takaful”. Here, Dr. Brugnoni speaks with Global Islamic Finance Magazine about why the Summit was such a big success, his work with Islamic microfinance, and the state of the Islamic finance industry in Europe. How did you find the International Takaful Summit? It was a great success for two reasons. 1) It was very well attended, with more than 450 delegates signing in. 2) We had institutional support. Nick Anstee, the Lord Mayor of London attended the opening session and spoke, as well as sitting in on several sessions. We also had dinner in the House of Lords at the invitation of Lord Mohamed Sheikh, which added credibility to the event. It was nice weather, nice atmosphere: It was 38 Global Islamic Finance September 2010 not just a formal event but also provided the opportunity for networking. To be honest with you, sometimes conferences can be hot air...
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...1. What is the most important thing that you can do when saving money? Financial Expert Michelle Singletary believes that putting money aside each week is key to a successful budget. 2. What is a subsidized loan? There is generally no interest until the loan is due. 3. What are some of the financial challenges that individuals face when they first live on their own? They do not put their money where it needs to go. They need money for rent and groceries. They buy extra stuff like $6 coffee. They have toi be able to have enough money to pay their bills and take care of themselves first. 4. How can you prepare to manage your money on your own? You can keep everything that is important and you also need to budget each week. You should keep important...
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...Malcolm Barraza FIN4606 23 April, 2013 Case Study Santander Consumer Finance 1. Please describe and evaluate the Country/Political Risk faced by this organization and describe its successes and failures. Having established itself as a strong financial leader within the financing sector of Spain, Santander has shown great strides in the overall growth towards becoming a worldly recognized leader concerning their involvement in finance on a global scale. The globalization process demonstrated by Santander is of grand success in comparison to many financial business endeavors throughout a multitude of various demographics, lifestyle and economic sectors. It is because of this extreme diversity within the business structure that Santander faces many obstacles in their decision making process. The level of difficulty in understanding each financial and economic sector relative to the various outreaches of each individual company demonstrates the need for strong initiative and research in assessing the components of each economy. Of these various concerns, once studied and researched, will provide answers to the questions presented within the case study. The decision of continuing to consolidate or expand and venture into new financial markets will be based on current performers within each market with respect to the competition branches within each individual segment. Understanding the influence of political powers within each business sector will allow the decision of flow...
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...IntroductionAftertaking a back seat to education program reform during the 1980s, school finance has returned as a highly visible issue. With therecent, sweeping state supreme court decisions overturning schoolfinance stnictures in New Jersey, Texas, and Kentucky, and activeorplanned cases in 16 additional states, school finance litigation, fiscalinequities, and school finance reform have rebounded to high placesonstate education policy agendas. This policy white paper discusses thechanging contours of school finance through the 1`./70s and 1980s, and outlines the key school finance issues for the 1990s. I. School Financein the 1970s and1980sSchoolfinance inequities derive from the way states finance public elementary and secondary schools....
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...This report will present a discussion on the financial challenges and issues based on the Ruritanian Project case study. The report is concerned with analyzing the investment environment of the host nation, maximizing the investment return and minimizing the risks which could have a negative impact on the financial performance of the Ruritanian project. Firstly, the national economy environment will be discussed based on the national GDP growth and inflation rate; secondly, there is a discussion on the foreign exchange risks of Rutitania Crown against international currency; third, the issue of joining the Euro zone will be analyzed in terms of benefits and drawbacks; next, the taxation effect in the investment decision making will be accessed and finally there will be a discussion on the political environment. THE NATIONAL ECONOMY AND THE IMPLICATIONS FOR THE PROJECT 2.1 The Relationship between National Economy and the Foreign Direct Investment (FDI) The economic growth of the host nation has always had a positive relationship with the foreign direct investment decision making. The positive effect of host country economic growth on investment decision making has been supported by various studies (Ericsson and Irandoust, 2000; Dhakal, Kamal and Upadhyaya, 2007; Barrell and Pain, 1996; Grosse and Trevino, 1996; Taylor and Sarno, 1999; Trevino et al., 2002). Traditionally the economic growth of the host nation induces FDI inflow when FDI is seeking consumer markets, or when...
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...4040 OCTOBER 08, 2009 TIMOTHY LUEHRMAN JOEL HEILPRIN Blaine Kitchenware, Inc.: Capital Structure On April 27, 2007, Victor Dubinski, CEO of Blaine Kitchenware, Inc. (BKI), sat in his office reflecting on a meeting he had had with an investment banker earlier in the week. The banker, whom Dubinski had known for years, asked for the meeting after a group of private equity investors made discreet inquiries about a possible acquisition of Blaine. Although Blaine was a public company, a majority of its shares were controlled by family members descended from the firm’s founders together with various family trusts. Family interests were strongly represented on the board of directors as well. Dubinski knew the family had no current interest in selling—on the contrary, Blaine was interested in acquiring other companies in the kitchen appliances space—so this overture, like a few others before it, would be politely rebuffed. Nevertheless, Dubinski was struck by the banker’s assertion that a private equity buyer could “unlock” value inherent in Blaine’s strong operations and balance sheet. Using cash on Blaine’s balance sheet and new borrowings, a private equity firm could purchase all of Blaine’s outstanding shares at a price higher than $16.25 per share, its current stock price. It would then repay the debt over time using the company’s future earnings. When the banker pointed out that BKI itself could do the same thing—borrow money to buy back its own shares—Dubinski had asked...
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...In our current political system, Democrats and Republicans rarely agree on anything. The majority of their views on campaign finance reform fit this status quo. As with most issues, Republicans favor less legislation that would place limits on campaign funding. They often claim this would be a case of the government infringing on citizens’ rights to free speech. Democrats, on the other hand, are pushing for increased limits on campaign funding. They claim that the massive spending from very wealthy donors limits the influence of the average person. With that said, both parties accept an astounding amount of outside funding for their campaigns. In the 2016 election cycle, a total of more than 647 million dollars was raised by the 17 initial...
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...MBA Program Course: Financial Analysis and Decision Making MBA730 Instructor: Marlena L. Akhbari Wright State University Finance and Financial Services McGraw-Hill/Irwin =>? McGraw−Hill Primis ISBN: 0−390−42334−3 Text: Case Studies in Finance: Managing for Corporate Value Creation, 4/e Bruner This book was printed on recycled paper. MBA Program http://www.mhhe.com/primis/online/ Copyright ©2003 by The McGraw−Hill Companies, Inc. All rights reserved. Printed in the United States of America. Except as permitted under the United States Copyright Act of 1976, no part of this publication may be reproduced or distributed in any form or by any means, or stored in a database or retrieval system, without prior written permission of the publisher. This McGraw−Hill Primis text may include materials submitted to McGraw−Hill for publication by the instructor of this course. The instructor is solely responsible for the editorial content of such materials. 111 MBAP ISBN: 0−390−42334−3 MBA Program Contents Bruner • Case Studies in Finance: Managing for Corporate Value Creation, 4/e II. Financial Analysis and Forecasting 1 1 6 16 16 39 52 52 60 66 66 84 100 100 6. The Financial Detective, 1996 11. ServerVault: ‘‘Reliable, Secure, and Wicked Fast’’ III. Estimating the Cost of Capital 12. ‘‘Best Practices’’ in Estimating the Cost of Capital: Survey and Synthesis 15. Teletech Corporation, 1996 IV. Capital Budgeting and Resource Allocation 19. Diamond...
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