...Dow Chemical - Business Analysis Part 2 Historically, the chemical industry has operated in a competitive environment, which is not anticipated to change. Dow experiences significant competitions in each of its operating segments as well as in each of the geographic areas in which it operates. Dow competes globally on the foundation of quality, technology, price, and customer service and operates in an integrated manufacturing environment. Basic raw materials are processed through many stages to produce many products that are sold as finished goods at different points in the process. Dow has two major raw material streams that feed the production of the finished goods which are chlorine-based and hydrocarbon based raw materials. (Dow Chemical Company, n.d.) Business Environment The business environment of Dow is one that has strategically positioned itself to withstand the ever-changing forces of economic, social, political and technological factors it faces daily. Dow consistently identifies opportunities and new technologies before its competition which stimulates their industry-leader position. (1) Financial Health Dow has great financial strength. Their sensible financial discipline has proven beneficial in recent global economic challenges and has actually helped position it for future growth. The recent global economic challenges forced Dow to take steps towards strengthening and diversifying its portfolio. The company has come out on the other side of the...
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...in Cairo School of Business Department of Accounting ACCT 5201 Financial Reporting & Analysis Annual Report Analysis The DOW Chemical Company BASF Chemical Company Contents A. Market Analysis and Company Overview 3 i. The Chemical Industry Overview 3 ii. Companies Overview 7 iii. Competitive Landscape 8 iv. Porter’s Five Forces Analysis 8 v. Corporate Governance 9 vi. Business Strategy 10 vii. SWOT Analysis 10 B. Financial Analysis 11 1. Horizontal Analysis 11 2. Vertical Analysis 11 3. Financial Ratios 16 A. Liquidity 16 i. Current Ratio 16 ii. Acid-Test Ratio 16 B. Activity Measures 17 i. Accounts Receivable Turnover 17 ii. Inventory Turnover 17 iii.Fixed Asset Turnover 17 C. Profitability Measures 18 i. Gross Profit Margin 18 ii. Operating Profit Margin 18 iii. Net Profit Margin 18 iv. Return on Equity (ROE) 19 D. Debt, Financial Leverage, Capital Structure 19 i. Debt Ratio 19 ii. Debt/Equity Ratio 20 iii. Dividend Payout Ratio 20 iv. Price / Earnings Ratio 21 4. Further Findings 21 i. Notes on BASF Income Statement 21 ii. Notes on Balance Sheet 22 C. Conclusion 22 A. Market Analysis and Company Overview i. The Chemical Industry Overview The chemical industry creates an immense variety of products which impinge on virtually every aspect of our lives. While many of the products from the industry, such as detergents, soaps and perfumes, are purchased directly by the consumer, 70% of chemicals manufactured are used...
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...Dow Chemical’s Acquisition of Rohm & Haas (2008-2009) MGT 4066 Professor Jayaraman December 7, 2010 Joseph Dennis Kunal Parbadia Robert Pirkle Will Weston Yash Ghogre Overview In mid 2008, Dow Chemical found itself in an industry that had recently been experiencing some consolidation. As one of the giants in the chemical material industry, it needed to maintain its position as an industry leader or else it would probably lose its foothold near the top. Then there is the target, Rohm & Haas, a smaller chemical materials firm, yet still considered a rival of Dow Chemical. Both companies had been in operation for a combined 200 years and have been creating innovative materials that each and every one of us see or use in our everyday lives without even noticing. On July 10, 2008, Dow Chemical announced the acquisition of Rohm & Haas, which had been approved by the Rohm & Haas Board of Directors. This deal occurred during one of the toughest economic times in recent history, which eventually had a profound effect on not only the financial structuring, but also the final execution of the deal, as you will see in the pages to come. About Dow Chemical The Dow Chemical Company was founded on May 18th, 1897 when Herbert H. Dow established a plan to both manufacture and market bleach and potassium bromide on a factory scale level. In the early years of the company’s existence there was a series of pricing wars between both British and German manufacturers of bleach...
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...Executive Summary In July 2008, Dow Chemical announced an acquisition of Rohm and Haas, a specialty chemicals producer, in an attempt to implement its new strategy of pursuing high growth businesses. The financial crisis that hit in the fall and the termination of PIC joint venture called into question Dow’s ability to finance the deal. Based on the valuation models, paying $78/share for Rohm and Haas remained a good value for Dow post financial crisis as the combined company retained its ability to generate synergies. Dow should proceed with the deal as announced to prevent costly litigations and aim for maximizing long-term shareholder value. To avoid being downgraded to junk status and incurring other concerns of financial distress, Dow should attempt to renegotiate the terms of its financing, particularly its $13 million bridge loan. Table of Contents I. The Firms…………………………………………………...…….p. 3 a. Dow Chemical b. Rohm & Haas c. Petroleum Industries Company II. The Acquisition……………………………………………..……p. 3-5 d. The Rationale e. The Valuation f. The Financing III. The Risks……………………………………………………….…p. 5 IV. The Financial Crisis……………………………………….……...p. 5-7 g. The Macroeconomy and Industry h. The Firms i. The Post-Crisis WACC j. The Post-Crisis Valuation k. The Post-Crisis Financing V. The Recommendations……………………………………………p. 7-8 l. The Options m. The Recommendations ...
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...service, location, section, and position | Correlations toAssignment | | Relevance | | Content Analysis – Breaking it down The Sum of the Parts I have chosen to review the Knowledge Management data collected about the Dow Chemical Company from the prospective of a Knowledge Worker. Since I am becoming more familiar with the term of what is meant by being a Knowledge Worker I feel like I am able to draw from my own experiences to assess the information gathered. About Dow Chemical Company | What the facts mean to me as a Knowledge Worker | Products & Services provided… | “Dow Chemical Company isa leading science and technology businessthat provides innovative chemical, plastic, andagricultural products and services to customersin more than 160 countries.” (Obtained from Transforming Information Management. Dow Chemical Company makes critical knowledge secure and easier to access and share.) | Location & Organization of the company… | “The company whose annual sales are over $57 billion andhave approximately 46,000 employees, they are a Midland,Michigan-based business.” (Obtained from Transforming Information Management. Dow Chemical Company makes critical knowledge secure and easier to access and share.) | Name of the division, is there any significance behind the name… | Proprietary Information Services – Much of this conversion to manage Dow Chemical Company’s Intellectual Assets began with Anne Rogers, Leader Proprietary Information Services in 2001...
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...Introduction and background Dow Chemical Company is the world largest chemical company that uses the power of science and technology to innovate what is essential to human development (The Dow Chemical Company, 2015). Herbert Henry Dow founded the Dow Chemical Company in 1897 through the introduction of new chlorine cell to make bleach as its original product, which contributed to the success of the company today (American Chemical Society, 2015). There are a few types of market and solutions that Dow Chemical Company provides such as agriculture, automotive and building & construction. An example of the solution for building and construction is the GREAT STUFF™ Insulating Foam Sealants that helps to save energy and money by preventing air leaks through gaps such as windows and doors (The Dow Chemical Company, 2015). Although there are numerous solutions that Dow Chemical Company has provided, there are still issues that arise such as: 1) lack of product storage and loading infrastructure due to the increasing demand of consumers in product, 2) increased rate of motor vehicle accident 3) ineffectiveness of project planning and organization. The recommendation to improve the issues are practicing Just-In-Time (JIT), implementing rules and regulation, and implementing employee empowerment. Problem description and analysis Dow Chemical Company had encountered an issue, the lack of product storage and loading infrastructure to meet the rise of consumers demand in product...
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...Business Ethics 22 November 2011 Dow Corning and the Silicone Breast Implants The pressures society places on women’s physical appearances can and often has created a psychological weakness on many women’s state of mind and physical well-being. On average people spend in excess of seven billion dollars per year on plastic surgery. The obsession American women have come to believe is normal concerning their physical beauty drives women to plastic surgeons by the millions each year. Women like Selma Hayek, Pamela Anderson, and Dolly Parton are all in essence physical role models for the average woman. Many companies have created products that are used to enhance the female physic from the inside out. This writing will explore the lengths a company will go to in order to gain profit from women who are desperate to enhance their physical appearance. In addition, the ethical practices of a certain company that were set aside to maintain revenues and side step litigation are examined within this paper. The Dow Corning Corporation was once thought to be a stellar company in terms of its ethical business practices. The Dow Corning Corporation was established in 1897 by a Canadian Chemist named Herbert Henry Dow (Dow Corning Breast Implants, 2011). Dow Corning Corporation rapidly became one of the few major manufacturing producers that made silicone products. Considering the fact that the Dow Corning Corporation is the second largest manufacturer of chemicals in the world and the...
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...McKinsey on Chemicals Number 3, Winter 2011 4 22 40 Chemicals’ changing competitive landscape Innovation in chemicals: An interview with Dow Corning’s Stephanie Burns and Gregg Zank Improving pricing and sales execution in chemicals 10 32 46 A capital-markets perspective on chemical-industry performance Capturing the lean energy opportunity in chemical manufacturing Kick-starting organic growth McKinsey on Chemicals is written Editorial Board: Florian Budde, Copyright © 2011 McKinsey & Company. by consultants in McKinsey’s global Philip Eykerman, Bob Frei, All rights reserved. chemicals practice together David Hunter, Tomas Koch, John Warner This publication is not intended to be with other McKinsey colleagues. Editor: David Hunter used as the basis for trading in the shares of any company or for undertaking This publication offers readers insights into value-creating strategies Art Direction: Veronica Belsuzarri, any other complex or significant financial and how to translate these Shoili Kanungo transaction without consulting strategies into company performance. Design Direction: Veronica Belsuzarri appropriate professional advisers. Design and Layout: Shoili Kanungo To send comments, request Editorial Production: Elizabeth No part of this publication may be copies, or to request permission to Brown, Heather Byer, Nadia Davis, copied or redistributed...
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...INTERNAL ENTREPRENEURSHIP AT THE DOW CHEMICAL COMPANY Overview:The Dow Chemical Company is the second largest chemical manufacturer in the world in terms of revenue and in terms of market capitalization; it is the third largest in the world (as of 20071). There was a steady growth of the market from the year 2002. But before that the company faced a back drop in the profit margin. The company realized its growth in 2002 only after merging with Union Carbi as the company’s sells rose to $27.8 billion. Back in 1998, the company faced the real down turn of the sale to $18.4 billion. Then, for 4 years continuously, the company managed to keep the sales around $20 billion. In the year 2000, the company planned to adopt a different strategy to enhance the sales growth. This gave rise to the production and development of Epoxy.Com. This strategy not only enhanced the growth but also changed the status of the company in the market as an innovator in the field of agricultural products, chemicals and plastics. The primary responsible of the new strategy is to target the small customers, whom the company never served. The Epoxy products and intermediates are responsible for the production and sell of epoxy raisins that added to the manufacture of electrical laminates, composites and coatings. The new profit venture was managed from Dow’s European headquarters in Switzerland. SWOT ANALYSIS:- Strength: • The new venture Epoxy was a high margin business with high capital intensive, as...
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...Specialization-1 vs. Diversification-0 There is an ongoing debate in the business world between specialization and diversification. Companies like Fitbit and Lululemon benefit from their expertise and innovation in niche markets, whereas companies like PepsiCo and Koch Industries benefit from their diverse product and service lines that appeal to a wide variety of customers in several unrelated markets. So which business strategy is more effective in creating value for the company and its shareholders? While this question is not entirely answered by a quantitative analysis, given that businesses are dictated by more than the numbers, this research report addresses the underlying question by analyzing the conglomerate discount using ten company examples. The Conglomerate Discount The general idea behind the conglomerate discount is that companies with multiple unrelated business segments are unfairly valued in the market place as a result of rolling up the various divisions under one, larger parent company. Proponents of the conglomerate discount theory argue that the market essentially penalizes companies that diversify their portfolio of businesses by valuing the conglomerate company at a market value that is less than what the sum of the values of unrelated segments would imply. Because the operations of the business units vary tremendously, an investor that wants to generate a return on one division of the conglomerate must also invest in the multiple other unrelated...
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...Perform an analysis of the Social/Demographic, Technological, Economic, Environmental/Geographic, and Political/Legal/Governmental segments to understand the general environment facing Great Lakes. Describe how Great Lakes will be affected by each of these external factors. Social Demographic Great Lakes began as a small oil and gas exploration company named McClanahan Oil Company. It was based in Michigan. In 1948 Charles Hale took over the company and changed it into a chemical and bromine business. In 1958 Emerson Kampden became the CEO. Hale found bromine and rich deposits in Arkansas. The company subsidiary with Octel Associates allowed the company to produce lead additives which afforded it the opportunity for growth. The company went from $50 million in revenues to a multinational company with $1.8 billion in sales. Technological Great Lakes was the top bromine business. This product allowed Great Lakes to produce a wide array of products as well as household items. Great Lakes also produced several specialty chemicals. Some examples of its products are water treatments, specialty household cleaners, polymer stabilizers, and performance chemicals. Octel gave the company the push it needed by producing tetraethyl lead (TEL). Octel produced lead additives. These additives were used as color stabilizers and as fire retardants. The salt water and bromine extraction process is what made the company international. Economics Some countries were developed and some were not...
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...DERIVATIVES & RISK MANAGEMENT ASSIGNMENT – II By: ATTIKA RAJ, ROLL NO: MS10A009, MBA- 2012 BATCH, DOMS, IITM 2/21/2012 I. Case Analysis – Risk management Policy of Lufthansa Submitted in Assignment 1 II. Case Analysis: Commodity Market Derivatives Case Solutions: 1. Discuss the risk exposure of Amarnath hedge fund. Ans: The Amaranth hedge fund was exposed to following risks: a. Market risk: The risk that occurs from the volatility of investment returns b. Liquidity risk: It measures the degree of difficulty in exiting a given trading position c. Funding risk: It measures the extent to which they were able to meet margin calls on their natural gas position d. Capacity risk: The risk due to putting too much money into one particular strategy 2. What are the negatives to rolling a spread position? Ans: Negatives to rolling a spread position are: When rolling a spread position the investor expects the following months to which the contract was rolled over to be favourable and thus be able to unload its positions. But, if the market moves in a direction opposite to the one anticipated by the investor it can result in huge losses. Also, if the risk increases for a spread position with the increase in the leverage. In the case of Amaranth hedge fund, it had rolled its short positions prior to august into the next month, hoping that market conditions would change and enable it to unload its positions. There were now no more summer months into which it could roll these...
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...products. Sustained by successful customer relations and partnering relationships, Ricerca Biosciences has grown to employ approximately 850 employees in the US, France and Taiwan (http://www.medcitynews.com/2010/03/ricerca-biosciences-completes-35m-buy-of-mds-pharma-units/), with 265 employees stationed at the Concord facility and 585 employees in the US and abroad. The current focus of Ricerca Bioscience is to offer a well-balanced integration of biological and medicinal chemistry services for the development of pharmaceutical and biotechnology products through the pre-clinical stage to the IND stage. Ricerca also provides continued support in CMC development, late stage non-clinical toxicology and metabolisms studies, and clinical sample analysis (http://www.ricerca.com/page12919.asp). Leadership Team R. Ian Lennox-Executive Chairman and Chief Executive Officer Mr. Lennox was appointed Chief Executive Officer position at Ricerca in February 2008 and has been a member of Ricerca’s Board since 2006. Mr. Lennox has spent over 30 years in the pharmaceutical and...
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...DuPont's Financial Health Checkup Ellen Rostron Southern New Hampshire University MBA-520-X3289 Accounting & Fin. Analysis 16TW3 Dr. Christine Oji March 26, 2016 DuPont's Financial Health Checkup As a newly-hired manager at a DuPont, my first task is to review the company’s past and current financial performance and health to begin planning for the upcoming year. My report will include several financial tables, along with a comprehensive narrative describing the organization’s context, financial performance, and health. Organizational Context For two hundred years, DuPont has followed its set of core values. Safety and health are priorities, and in the 90 countries that DuPont services its industry customers, there is a broad range of products that are offered (DuPont, 2016). DuPont is considered a Science Company. The Security and Exchange Commission Standard Industry Classification is Plastic Material, Synthetic Resin/ Rubber, Cellulos (No Glass). In this SIC, there are a handful of companies, overall lowering competition in this field. Appendix I highlights the Industries, the Products/Services, and the vast geographical area of DuPont’s reach. DuPont is inclusive of ten businesses. The six Business Segments are reported as Agriculture, Electronics & Communications, Industrial Biosciences, Nutrition & Health, Performance Materials and Safety & Protection (DuPont, 2016, p.4). Agriculture’s segment performance depends on the weather to cooperative...
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...Clinical Research Organizations Business and advanced analytics can be used to design better trials, forecast patient-based activities, and optimize other operational processes. Applying business and advanced analytics to clinical trial operations represents a new and improved approach to reducing the cost and time associated with managing clinical research projects. As a result, the roles of SAS experts in the biopharmaceutical industry are expanded. Bringing a new drug to market is an expensive proposition—the cost is often estimated at $1.2 billion. DRUG SUPPLY SITE SELECTION SITE MONITORING DATA QUALITY PORTFOLIO OPTIMIZATION AUTOMATED ANALYSIS AND REPORTING DRUG SUPPLY SITE SELECTION SITE MONITORING DATA QUALITY PORTFOLIO OPTIMIZATION AUTOMATED ANALYSIS AND REPORTING Foundation to successfully change the process and to enable the biopharmaceutical industry to develop new therapies with optimized operational activities. OPERATIONAL TRIAL DESIGN SIMULATION PATIENT RECRUITMENT AND RETENTION RESOURCE OPTIMIZATION ADAPTIVE TRIAL DESIGN TRIAL PERFORMANCE MANAGEMENT At the execution level, analytics enable research companies to focus their efforts where they matter the most— accurate forecasts for planning and risk-based leveraging of resources. It cannot be business as usual if the life sciences research organizations want to continue to add to their long history of success. Flipkart.com The Project: With that goal in mind, flipkart implemented...
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