...structure of Hill Country Snack Foods Co. EXECUTIVE SUMMARY This report discusses the current operational and financial strategies of Hill Country Snack Foods Co. and analyses the proposed capital structure for it. Part I of the report reviews the company’s strategies and its latest financial performance. Part II illustrates a detailed valuation of the proposed capital structure. Valuation methods involved includes Dividend Discount Model and Discount Cash Flow valuation (the Hamada approach). It is recommended that the company adopt a 40% debt-to-capital structure to fully use its capital and benefit from the external funding. PART I THE OVERVIEW OF HILL COUNTRY SNACK FOODS CO. Background of Hill Country Snack Foods Co. Hill Country Snack Foods Co. is a middle-size snack food company located in Austin, Texas in the U.S.. The snack food industry is very competitive. The main competitors of Hill Country are industry giant PepsiCo and smaller companies like Synder’s-Lance. The current CEO Howard Keener, who is 62 years old and worked in the company for over 15 years, is approaching retirement. He has a very strong personal influence on the company culture and the way it is operated. He is passionate about maximizing shareholder value, believes in keeping tight control over costs, and is very risk adverse in the operation strategy as well as the financing decisions. Considering his near retirement, many investors think there will be a series of change in Hill Country. Operating...
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...9-913-517 OCTOBER 22, 2012 W. CARL KESTER CRAIG STEPHENSON Hill Country Snack Foods Co. The Chief Executive Officer of Hill Country Snack Foods had never enjoyed analyst conference calls, but in late January of 2012, Howard Keener was yet again asked about the company’s cash balances, capital structure, and performance measures. One analyst complained that Hill Country’s growing cash position, absence of debt finance, and large equity balance made it difficult for a company in a mature industry to earn a high rate of return on equity, and recommended a more aggressive capital structure. “Maybe I don’t fully understand capital structure theory and practice,” replied Keener, “but I have observed that companies don’t get into trouble because they have too much cash; they get into trouble because they have too much debt.” Hill Country had seen its sales and profits grow at a steady rate during Keener’s tenure as CEO, and at the end of 2011 the company had zero debt and cash balances equal to 18% of total assets and 13% of market capitalization. Having just celebrated his 62nd birthday, Keener was approaching retirement, creating speculation by investors and analysts that the company might change to a more aggressive capital structure in the near future. Company Background Hill Country Snack Foods, located in Austin, Texas, manufactured, marketed, and distributed a variety of snacks, including churros, tortilla chips, salsa, pretzels, popcorn, crackers, pita...
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...Hill Country Snack Foods Co. Hill Country Snack Foods Co. (HCSF) is an American-based company specializing in snack food industry. Its competitive advantages mainly base on conservative management strategies, cost efficiency, high quality products as well as solid regional position. Despite stable growth over years, one big concern raised among company’s shareholders as well as financial analysts are its capital structure. As HCSF is all-equity funding, many perceived that the company has more potential to increase its financial performance but leverage in the means of introducing debts in its capital structure. This report considers impacts of such suggestion on both HCSF’s future operation and financial performance I. Operating and financial strategies Under the management of the current CEO, HCSF adopts one philosophy in all of its decision- making, which is to maximize shareholder value. This is achieved by employing the efficient cost budgeting, and high level of caution as well as risk aversion * Efficiency management and cost controlling: It is easy to observe that well-managed cost is one of the key strategies for the success of HCSF. In the industry where competition is intense and rise in output is nearly impossible, maintaining input costs at the lowest possible numbers is a way to keep the profit growing. The strategy proves its effectiveness by numbers shown in Exhibition 2 when comparing sales and net income between HCSF and Snyder’s Lance Inc. Although...
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...Hill Country snack food Co. Case Hill Country’s operating strategy and its impact on business risk & financial strategy The operating strategy is to produce high quality products through efficient, low-cost and aggressive operation as well as singular management. In detail, the company provides several kinds of snacks to satisfy different type’s customers. The company expands its presence into sporting events, movie theaters and other leisure events to attract customers. An efficient and low-cost operation is achieved by strong control of budgets and costs. Customers are satisfied by companies’ quick react to their requirements or preferences and reinvent and expand its products, showing the efficient management for the customer requirement. Also, all decisions are made in order to build shareholders' value, indicating singular management. For the business risk, the snack foods industry was very competitive, facing off against competitors like PepsiCo and Snyder’s-Lance very day. In this high rivalry industry, company could not succeed by price increase. And unfavourable cost due to both internal and external factors is not easy to control. In order to control the business risk, the company is actively involved in the budget approval process, and the operating strategy has very important part to keep the costs under control. For the financial risk, the more debt financed the higher financial risk it is. The company's risk avoidance strategy is manifested in its financing...
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...Hill Country Snack Food Co is experiencing steady growth and success due to its effective operations and quality products in its industry. It has unique capital structure with zero debt and large cash balance corresponding to its conservative operation strategy and corporate culture and philosophy. Whether to change to a more aggressive capital strategy and what is the optimal level of debt-to-capital ratio for Hill Country is the key issue in this case. * Hill Country’s operation strategy and its corporate culture The company commits to operating and cost efficiency with high quality products and strong distribution management. This strategy enjoys a steady sales growth rate and positive profits. The management of Hill Country strongly believes to maximize shareholder value and the managerial philosophy is caution and risk-avoidance. * Influence on financial performance and capital structure Hill Country’s conservative operation drove strong financial performances with large increases in net income since 2009 and continuous and growing dividends paying out ratio and sufficient cash flow. The company’s risk-aversion culture also brings about a preference of equity finance, large cash balance and avoidance of debt. The ROE of Hill Country (12.5%) is much lower to Pepsi’s (30.8%) in correspondence to its net profit (7.2%) compared to Pepsi’s (9.7%). The reason is because of its 100% reliance on equity finance. * The impact of a more leveraged capital structure ...
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...Jessica Turner has a master's degree in accounting and an undergrad degree in business. She established Turner Test Prep, a CPA exam review center, after being rejected by the Big Six accounting firms. She decided to bring the company into existence when she was searching for other employment options, and also because she had experience in the field when she worked at a review center's business office before taking up her master's degree. There, she inadvertently started teaching the math portion of the reviews, and received training in teaching. After passing the CPA exam on the first try herself, she decided that she would like to help those who want to take the CPA exam pass on their first try as well. And so she developed a business and marketing plan, convened with various professors to create a comprehensive curriculum, and opened her firm's doors. Instead of the normal review route of using books, software, or online courses, she provided a full service 6 week, 3-6 hours a day review regimen for her clients that include one hour live lectures from various professors, discussions about test taking skills and organizational skills to digest information faster, provided audiotapes that the clients can listen to at home or in their cars, executed timed mini tests as well as practice essay questions, one on one bi weekly client meeting to see how they've progressed and for them to ask questions, and a direct line to her via e mail for any queries the clients may have. She Even...
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...The Industry I decided to do my paper on is the fast food Industry. The fast food industry is a billion dollar industry. The fast food industry spends billions of dollars a month on advertising to capture young people as well as children as. Despite the health warnings that eating fast food on a daily basics will do to one’s body, the industry still is thriving due to a large number of working families, we live in American, which has the largest fast food industry in the world. McDonald’s is one of the largest fast food restaurants in the fast food industry serving around 68 million people daily, in over 118 countries. McDonald’s has a loyal based of customers who have been patronizing the establishment for many years, operated by a franchise agent, an affiliate or the corporation. McDonald’s business strategies has been said to be the best in the fast food industry, maintaining cost leadership while producing dependable food with great service. Today we see McDonald’s in a mature industry that uses product proliferation to meet many needs in the fast food industry while deterring new entrants (Hill and Jones, 205). McDonald’s prides their strategy by setting the standards with their products and within the industry as well. I feel that the strategy McDonald’s incorporates within the company is the best for them, setting the standard to be the best in the industry promotes the necessary competitive edge needed to ensure the company continues to delivery its winning...
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...International Business School Hanze University of Applied Sciences Dutch Food Company Pursuing the Chinese Market Research paper Authors: Nicole Elze, Gediminas Gargasas, Weili Gu, Francia Solórzano Class: MIBM Group A, 2015 - 2016 Group name: SEHCH Date: 11 January 2016 Place: Groningen 0 Abstract The consumer demand for high quality healthy food in East China is increasing and is thus attractive for businesses in the food industry. This paper assessed the Chinese food market from a perspective of a Dutch food company, which is willing to export. Four aspects of international business were covered, namely the involvement in international markets, value chain, dynamic capabilities and marketing. Both perspectives, current theoretical body of knowledge and most recent market information, have been combined to provide a complete and current situation of the food market in China. In the current literature, little is found regarding the Chinese consumer behavior especially towards foreign high quality food. The paper presents the most relevant information on four aspects of international business with an additional focus on marketing and potential clients and distributors in order to lay a foundation for any food exporter willing to export to China. 1 Table of contents 1. Introduction ................................................................................................................................... 3 2. Methodology .....
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...available 24/7 to assist you what you need, Click Here to submit your Order. ======================================================================================= Acquisition of Consolidated Rail Corp. by Benjamin C. Esty Airbus A3XX: Developing the World’s Largest Commercial Jet by Benjamin C. Esty American Chemical Corp.by William E. Fruhan, John P. Goldsberry American Home Products Corp.by David W. Mullins AQR’s Momentum Funds by Daniel B. Bergstresser, Lauren H. Cohen, Randolph B. Cohen, Christopher Malloy Arundel Partners: The Sequel Project by Timothy A. Luehrman AXA MONY by Andre F. Perold, Lucy White Beta Management Co. by Michael E. Edleson Butler Lumber Co. by Thomas R. Piper Cartwright Lumber Co.by Thomas R. Piper Citigroup 2007: Financial Reporting and Regulatory Capital by Edward J. Riedl, Suraj Srinivasan Clarkson Lumber Co. by Thomas R. Piper Cooper Industries, Inc. by Thomas R. Piper Cost of Capital at Ameritrade by Erik Stafford, Mark L. Mitchell Debt Policy at UST, Inc. by Mark L. Mitchell Dell’s Working Capital by Richard S. Ruback DermaCare: Zapping Zits Directly by Richard G. Hamermesh, Lauren Barley Diageo plc by George Chacko, Peter Tufano Dimensional Fund Advisers–2002 by Lauren H. Cohen Dividend Policy at FPL Group, Inc.by Benjamin C. Esty Dividend Policy at Linear Technology by Malcolm P. Baker, Alison Berkley Wagonfeld Equity International: The Second Act by Nicolas P. Retsinas, Ben...
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...The country that we researched to export Peanut Butter & Co peanut butter to is Germany. Germany is located in the Western and Central part of Europe. The Capital is Berlin that is also the largest city in the country. Other large cities in the country include Hamburg, Munich, Cologne and Frankfurt. Germany is part of the European Union, out of all the states that make up the European Union Germany is one of the most populous countries and has the largest economies. We chose to export peanut butter to Germany, because it is a rare item to find in the country. The German people are more familiar with a product called Nutella. Nutella is a creamy Chocolate hazelnut spread that is used on all food such as breads, fruits and more. Peanut Butter and Co offer a variety of product but one similar product to Nutella is their “Dark Chocolate Dream” peanut butter. Peanut Butter & Co could have an advantage over Nutella because recently the price of Nutella rose due to a shortage of hazelnuts. The Dark Chocolate Dream as well as the other peanut products they contains no cholesterol, no trans fats, no hydrogenated oils, and no high-fructose corn syrup. It is also gluten-free, certified vegan, and certified kosher. Since the Germans are all about eating healthy with no artificial additives this product will be a perfect fit in the country. The United States has to follow regulations and directives form the FDA. Germany also has to follow strict protocols in order to receive products from...
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...Introduction to Zhengzhou University Zhengzhou University is a National Key University, formed through merger of three major Universities of Henan province namely Zhengzhou University, Zhengzhou University of Technology and Henan Medical University. It is one of the prestigious **National 211 Project Universities approved by the government of China and the first co-built University under the administration of both the Ministry of Education and the Provincial Government. It is authorized by the Ministry of Education to receive the Chinese Government and the Confucius Institute Scholarship. Zhengzhou University has 11 disciplines - literature, science, technology, medicine, history, philosophy, law, economics, management, education and agriculture. Zhengzhou University covers an area of more than 4.7 sq. km. It has 4 campuses; the new campus covers an area of more than 2.9 sq km. The University has 83 specialties for undergraduates, 126 specialties for postgraduates, 18 specialties for doctorates and 7 post-doctoral research stations. There are more than 40000 students in the university. Among them more than 3000 are postgraduate and doctoral students. University has academic cooperative relationship with over 40 Universities and research institutions abroad, mainly from the United States Great Britain, Canada, France, Japan, South Korea, Australia for joint personnel training and research. The Medical School of Zhengzhou University, previously known as “Henan Medical University”...
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...Executive Summary SQUARE today symbolizes a name – a state of mind. But its journey to the growth and prosperity has been no bed of roses. From the inception in 1958, it has today burgeoned into one of the top line conglomerates in Bangladesh. Square Pharmaceuticals Ltd., the flagship company, is holding the strong leadership position in the pharmaceutical industry of Bangladesh since 1985 and is now on its way to becoming a high performance global player. SQUARE today is more than just an organization, it is an institute. In a career spanning across four and half decades it has pioneered the development of the local business in fields as diverse as Pharmaceuticals, Toiletries, Garments, Textile, Information Technology, Health Products, Food Products, Hospital, etc. With an average Annual turnover of over US$ 200 million and a workforce of about 3500 the SQUARE Group is a true icon of the Bangladesh business sector. Vision satement We view business as a means to the material and social wellbeing of the investors, employees and the society at large, leading to accretion of wealth through financial and moral gains as a part of the process of the human civilization. Mission statement Our Mission is to produce and provide quality & innovative healthcare relief for people, maintain stringently ethical standard in business operation also ensuring benefit to the shareholders, stakeholders and the society at large. Chapter B: Company Profile History...
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...Markets…………………………………………………………………………. ..9,10,11 Positioning…………………………………………………………………………………...11,12 Strategies………………………………………………………………………………………12 Marketing Mix………………………………………………………………………………12,13 Marketing Research…………………………………………………………………………….13 Controls………………………………………………………………………………………….14 Implementation process…………………………………………………………………….14,15 Marketing Organization……………………………………………………………………….15 Contingency Plan……………………………………………………………………………….15 Conclusion…………………………………………………………………………………...15,16 References……………………………………………………………………………………….17 Executive Summary Clif Bar, Inc. was found in 1992 by Gary Erickson. The nature of Clif Bar is the planet, food and community. They are working to reduce their ecological footprint in everything that they do, from the field to their final products. They are the “leading maker in all-natural and organic energy and nutrition food and drinks for men, woman, and children.” (Clif Bar, Inc.) This brings me to a new product that I would like to recommend for Clif Bar, Inc. to market which are baked sweet potato chips. According to Natural News.com sweet potatoes have six facts that everyone...
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...company because we had purchased stock in the Wrigley Company in 1993 as a gift/investment when my youngest son was born. In 2008, the Wrigley Company was bought by Mars and taken private. Our family had to take a small lost on our shares and no longer received the new development of gum each Christmas. However, it was great move on Wrigley’s behave and for the Mars company as well. Mars is a very diverse organization and does provide a very versatile business plan in this ever changing world and economy. I find it to be an intriguing company and envy it’s progression from a small town at home business to the billion dollar international business it is today. The company began in 1911 by Mr. Frank C. Mars as the Mar-O-Bar Company in his country home kitchen located in Tacoma, Washington. His first products were butter cream candy bars which his family and friends said were the best in the land. He soon outgrew his kitchen when the business started booming and opened his first factory of 125 employees. Quality and value were the foundations for his business and his first mission statement. In 1920, Mr. Mars relocated his factory to Minneapolis, where soon the Snickers (without the chocolate coating) and Milky Way bars were developed and launched. Both candies are just as popular 91 years later. The company in 1922 actually loss $6,000 money, but in 1924 had a sales profit of over $700,000. In 1926, Mars changed the name of the company to Mars Candies. By 1928 again the...
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...the truly global organizations in the world with presence in many countries and offering products which are not only unique but carry a great brand value . Since Pepsi Co works in a global environment therefore its strategy is also global and focuses on achieving the strategic objectives of the firm with great greater emphasis on creating a unique set of strategies which are as applicable as they are in one country . Pepsico universally acknowledged as one of the world’s most successful companies of consumer products. Enormous awards have gone in the worlds. In 2009, Pepsico is ranked 175 in the Fortune’s. 18 brands out of its series boast an annual sales volume of over 1 billion USD, including Pepsi-Cola, Mountain Dew, Gatorade, Lay’s, Diet Pepsi, Tropicana, Doritos, Lipton Teas, Quaker Cereals, Cheetos, 7-UP, Ruffles, Aquafina, Mirinda, Tostitos, Sierra Mist, Walkers, Fritos. In addition, PepsiCo entered new markets including Japan and Eastern Europe. However, the company also had its share of crucial missteps – principal of which was entering into the fast food industry. With the purchase of Pizza Hut, Kentucky Fried Chicken and Taco Bell, PepsiCo was well on its way to building a proverbial three-legged stool. The CEO at the time, Wayne Callaway, believed that this new structure would bring the company success and referred to the three legs of the stool as being snack foods, soft drinks and fast food. He believed that there would be significant cost savings and skills...
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