...Case 6-3 Report Charles Crutchfield, manager of manufacturing operations at Morgan Manufacturing, was concerned with the health of the operating aspects of the business. And Westwood, Inc. was Morgan Manufacturing’s major competitor. According to the financial statements, Edward Drewery, controller of Morgan Manufacturing, stated the reason why their operations were less efficient than Westwood’s might be their different method to account for inventory. Over 2006, Morgan Manufacturing implemented significant productivity improvements over Westwood. But these improvements were not reflected in the financial statements (Exhibit 1). Morgan Manufacturing used LIFO as its inventory costing method, while Westwood used FIFO. Additionally, comparison of three key ratios indicated relative differences between these two competitors: gross margin percentage, pre-tax return on sales, and pre-tax return on assets. And calculations of these three ratios are below: Ratio | Calculation | Gross margin percentage | Gross margin/ Sales | Pre-tax return on sales | Income before tax/Sales | Pre-tax return on assets | Income before tax/ Total assets | Based on the two different methods they used to account for inventory, here is the 2006 comparison of the three ratios between Morgan Manufacturing and Westwood: Ratio | Morgan Manufacturing | Westwood, Inc. | Difference | Gross margin percentage | 44.5% | 45% | -0.5% | Pre-tax return on sales | 14.5% | 15% | -0.5% | ...
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...Morgan Motor Company An analysis on Internal and external environment i|Page Table of Contents Executive Summary .................................................................................................................. iii 1.0 Current Situation.................................................................................................................. 1 1.1 Current condition ............................................................................................................. 2 1.2 Strategic Posture .............................................................................................................. 2 2.0 Corporate Governance......................................................................................................... 6 2.1 Board of Directors............................................................................................................ 7 2.2 Top Management ............................................................................................................. 9 3.0 External Environment: Opportunities and Threats ............................................................ 11 3.1 Physical Environment: Raw Material ............................................................................ 12 3.2 Societal Environment ..................................................................................................... 14 3.3 Task Environment .............................................................
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...at Attain Learning Kay Sunderland, account director for Attain Learning (Attain), sat in her Brooklyn office furiously scribbling notes in the margin of the research report she had just printed out. It was the second week of January 2011, and Sunderland was preparing for a new client meeting. As she paused to take a sip of her coffee, her phone vibrated with an incoming text. “We have an issue that I need you to deal with. Call me ASAP – Juan Nunez.” Juan Nunez was the Chief Learning Officer for Sunderland’s most important client, Gramen Equipment Company. Sunderland quickly called Nunez and was informed that Mike Morgan, Attain’s content development director, had left several voice mail messages for Nunez. Nunez politely informed her that he did not have the time or inclination to deal with Morgan’s calls and he did not want to be bothered by Morgan again. Sunderland had been focused on another client’s deployment and was not aware of the reason for Morgan’s calls. She was caught off guard by his actions and was extremely annoyed that he contacted the client directly. He knew the account director was supposed to be the sole point of contact with the client. She immediately checked Morgan’s Outlook© calendar and saw he was in a team meeting for the next hour. Attain Learning Inc.: Company History Attain was founded by Caroline Nicholas in 1998 soon after she had completed her MBA at Columbia University’s Graduate School of Business. Nicholas’s professional background...
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...Macquarie University Master of Applied Finance ------------------------------------------------- Emissions Trading ------------------------------------------------- Assignment 2 ------------------------------------------------- Onesteel Prepared by: Wayne Andrews Student number: 41712986 September 2011 Subject Number : ECFS905 Lecturer : Julian Turecek Class : Sydney P. T. Company Selection Select an ASX200 company that is expected to have a carbon exposure equal to or greater than 2% of EBITDA at a $23/t carbon price. Question 1 Determine the company’s carbon exposure, including direct (Scope 1) and indirect (Scope 2) emissions and establish that its exposure is greater than 2%. The following table summarises Onesteel’s actual and estimated for FY10, FY11 and FY12 emissions and imputed carbon cost under the currently proposed Carbon Tax, relative to reported EBITDA. Table 1 – Implied impact of carbon pricing imputed to 2010 results | Company Guidance | Fixed Price imputed for comparison | Fiscal year commencing | FY10 | FY10 | FY11 | FY12 | Carbon Price (FY10/11 theoretical) | 23.0 | 23.0 | 23.0 | 23.0 | EITE Assistance Rate | 94.5% | 94.5% | 94.5% | 94.5% | EBIT DA $Mil | 619.0 | 619.0 | 638.0 | 717.6 | Type 1 Emissions | 2.55 | 2.55 | 2.66 | 3.05 | Type 2 Emissions | 1.34 | 1.34 | 1...
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...Distinguished Professor of Operations & Manufacturing Management INSTRUCTOR BACKGROUND INFORMATION Managing the Innovation Process Panos Kouvelis Emerson Distinguished Professor of Operations & Manufacturing Management PANOS KOUVELIS Emerson Distinguished Professor of Operations and Manufacturing Management Director of Boeing Center on Technology, Information & Manufacturing Sr. Associate Dean & Director of Executive Programs Has Always Been a Good Student !! (avoided “real life” as much as possible) B.S., Mechanical Engineering, NTUA M.S., Industrial & Systems Eng., USC MBA, USC Ph.D., Operations Management, Stanford Loves to Teach 4 years, Business School, UT Austin 5 years, Fuqua School of Business, Duke 14 years, Olin School of Business, Wash.U. (My wife has decorated my home office walls with nicely framed teaching awards, “most popular professor at Olin, ***Bus. Week ranking”) Managing the Innovation Process Panos Kouvelis Emerson Distinguished Professor of Operations & Manufacturing Management PANOS KOUVELIS (cont’d.) Consults Frequently (to any firm having money & troubles to spare) Recent “victims”: Solutia, Duke Hospital, IBM, Aerofil Tech., Express Scripts, LHB Ind., Reckitt & Beckinser, Boeing, Ingram Micro, MEMC, Spartech, MECS, Maxim, Bunge, Smurfit Stone, and Emerson. Writes a lot (“publish or perish”) Three books + over 80 journal articles Textbook: Wiley, Global Operations and Logistics – Text and Cases Online course on “Global Supply...
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...LU M E 1 9 | N U M B E R 2 | S PRING 2007 Journal of APPLIED CORPORATE FINANCE A MO RG A N S TA N L E Y P U B L I C AT I O N In This Issue: Valuation, Capital Budgeting, and Disclosure Enterprise Valuation Roundtable Presented by Ernst & Young 8 Panelists: Richard Ruback, Harvard Business School; Trevor Harris, Morgan Stanley; Aileen Stockburger, Johnson & Johnson; Dino Mauricio, General Electric; Christian Roch, BNP Paribas; Ken Meyers, Siemens Corporation; and Charles Kantor, Lehman Brothers. Moderated by Jeff Greene, Ernst & Young. The Case for Real Options Made Simple 39 Raul Guerrero, Asymmetric Strategy Valuing the Debt Tax Shield 50 Ian Cooper, London Business School, and Kjell G. Nyborg, Norwegian School of Economics and Business Administration Measuring Free Cash Flows for Equity Valuation: Pitfalls and Possible Solutions 60 Juliet Estridge, Morgan Stanley, and Barbara Lougee, University of San Diego Discount Rates in Emerging Markets: Four Models and an Application 72 Javier Estrada, IESE Business School Rail Companies: Prospects for Privatization and Consolidation 78 James Runde, Morgan Stanley A Real Option in a Jet Engine Maintenance Contract 88 Richard L. Shockley, Jr., University of Indiana A Practical Method for Valuing Real Options: The Boeing Approach 95 Scott Mathews, The Boeing Company, Vinay Datar, Seattle University, and Blake Johnson, Stanford University Accounting for Employee...
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...its outstanding common stock as a result of the merger Deal Terms Breakdown: Transaction Value Transaction Consideration Purchase price per WYE share $50.19 Existing Cash Used $22,213 32.7% Cash per WYE share $33.00 New Debt $22,500 33.1% PFE stock value per WYE share $17.19 Total Cash $44,713 65.8% PFE shares per WYE share 0.985 Stock Consideration $23,289 34.2% Premium to 1/23/09 WYE price 29.3% Total Consideration $67,303 100.0% Total WYE shares (MM,diluted) 1,341 Total Equity Value $68,001 Total Enterprise Value $65,339 Exhibit 3: Summary of Terms, PFE Acquisition of WYE at $50.19 per share (Per Credit Suisse Analyst Report) Synergy Effects for the Pfizer and Wyeth Combined Firm: 1. Forming the world’s Premier Biopharmaceutical Company 2. Enhanced in-line and pipeline patent-protected portfolio in key...
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...Fall 2010 Case Discussion Questions Instructor: Professor Edward H. Chow 周行一 Case study: financial bubble Case: Trouble with a bubble (9-808-067) 1. Why did Irving Fisher believe that stock prices had reached a permanently high plateau? 2. Why did the stock market crash in 1929? 3. Why did influential individuals like Fisher, Keynes and Rockefeller believe that the downturn would only be temporary? Case study: investment banking business and global financial crisis Case: Investment banking in 2008 (A): Rise and fall of the Bear (KEL378) 1. What role did Bear’s culture play in its positioning vis-à-vis its competitors, and what role might that culture have played in its demise? 2. 2. How did Bear’s potential collapse differ from that of LTCM in the eyes of the Federal Reserve? 3. What would Bear have done differently to avoid its fate? a. - In the early 2000s? b. - During the summer of 2007? c. - During the week of March 10, 2008? 4. Who stood to benefit from Bear’s implosion? 5. Is market perception of liquidity more important for an investment bank than it is for an traditional manufacturing or distribution business? If so, why? 6. How could Bear have addressed perceptions of its liquidity? Could it have stopped the run on the bank, and if so, how? 7. Did Bear’s failure undermine the viability of so called “pure-play” investment banks? 8. What role should the Fed play in maintaining order in world securities markets? Case: Investment...
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...Investments Fall 2014 Case Discussion Questions Instructor: Professor Edward H. Chow 周行一 Case study: financial bubble Case: Trouble with a bubble (9-808-067) 1. Why did Irving Fisher believe that stock prices had reached a permanently high plateau? 2. Why did the stock market crash in 1929? 3. Why did influential individuals like Fisher, Keynes and Rockefeller believe that the downturn would only be temporary? Case study: investment banking business and global financial crisis Case: Investment banking in 2008 (A): Rise and fall of the Bear (KEL378) 1. What role did Bear’s culture play in its positioning vis-à-vis its competitors, and what role might that culture have played in its demise? 2. How did Bear’s potential collapse differ from that of LTCM in the eyes of the Federal Reserve? 3. What would Bear have done differently to avoid its fate? A. - In the early 2000s? B. - During the summer of 2007? C. - During the week of March 10, 2008? 4. Who stood to benefit from Bear’s implosion? 5. Is market perception of liquidity more important for an investment bank than it is for an traditional manufacturing or distribution business? If so, why? 6. How could Bear have addressed perceptions of its liquidity? Could it have stopped the run on the bank, and if so, how? 7. Did Bear’s failure undermine the viability of so called “pure-play” investment banks? 8. What role should the Fed play in maintaining order in world securities markets? Case: Investment banking...
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...TABLE OF CONTENT Executive Summary..............................................................................................................................3 Industry overview..................................................................................................................................4 Business Overview.................................................................................................................................5 Financial Summary Profitability................................................................................................................................6 Asset Management.....................................................................................................................7 Liquidity.....................................................................................................................................8 Non-recurring items..................................................................................................................8 Valuation Assumptions...............................................................................................................................8 Dividend Discount Model........................................................................................................11 Free cash flow to the firm...........................................................................
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... Mitt Romney, Senior Consultant, Brain Consultancy RE: Securing Inventec’s Future Success Being one of Taiwan’s leading Original Design Manufacturers (ODM), in 2005 Inventec stands at a crossroads. So far Inventec’s economic activities focused on designing and manufacturing electronic products for OEMs, mainly western companies, which distributed them using their strong brand names. Since 1995 notebook PCs have been the mainstay of Inventec’s business (Appendix A). However computer industry-wide price and margin erosions are expected to continue. Having only a few core customers, ODMs have become increasingly dependent on their western counterparts, a circumstance which is used against them to obtain lower prices. This is especially true for Inventec (Appendix B). More diversified contract manufacturing partnerships and an increasing consolidation in their industry have increased OEMs’ negotiating strengths as well. As those clients have adopted aggressive pricing strategies, the only thing that counts is how fast you can deliver the lowest cost product. Exploiting even cheaper labor seems almost impossible, since large ODMs have already moved the largest proportion of their manufacturing to low-cost areas in mainland China. Meanwhile Inventec has also developed and marketed software under its own brands. As the PC hardware sector shows signs of weakening, the software business could be a valuable alternative. Decision Criteria Inventec’s future business strategy...
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...Revlon Revlon is an American cosmetics, skin care, fragrance, and personal care company founded in 1932. ------------------------------------------------- History Revlon was founded in the midst of the Great Depression, 1931, by Charles Revson and his brothers Joseph and Joel Roberts, along with a chemist, Charles Lachman, who contributed the "L" in the Revlon name. Starting with a single product — a new type of nail enamel — the three founders pooled their resources and developed a unique manufacturing process. Using pigments instead of dyes, Revlon developed a variety of new shades of opaque nail enamel. In 1937, Revlon started selling the polishes in department stores and drug stores. In six years, the company became a multimillion dollar organization. By 1940, Revlon offered an entire manicure line, and added lipstick to the collection. During World War II, Revlon created makeup and related products for the U.S. Army, which was honored in 1944 with the Army-Navy "E" Award for Excellence. By the end of the war, Revlon was listed as one of America's top five cosmetic houses. Expanding its capabilities, the company bought Graef & Schmidt, a cutlery manufacturer seized by the government in 1943 because of German business ties. This acquisition made it possible for Revlon to produce its own manicure and pedicure instruments, instead of buying them from outside supply sources. In November 1955, Revlon went public. The IPO price was $12 per share, but it reached $30 per...
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...MORGAN NORTH STANLEY RESEARCH AMERICA Morgan Stanley & Co. LLC Adam S. Parker, Ph.D Adam.Parker@morganstanley.com +1 212 761 1755 Brian T. Hayes, Ph.D Brian.T.Hayes@morganstanley.com Antonio Ortega Antonio.Ortega@morganstanley.com November 26, 2012 Adam J. Gould, CFA Adam.Gould@morganstanley.com US Equity Strategy The 2013 Playbook We are launching our 2013 US equity outlook today. We have been cautious on US equities for much of the last two years. Our concerns around US deficit / debt and the obvious borrowing from the future that occurs from unconventional policy, the European sovereign crisis, and slower growth in emerging markets generally remain, but the acuteness of these issues appears for now to be less sharp. Our 2013 year-end target calls for low-to-mid single digit upside (Exhibit 1) predicated on our view that 2014 corporate earnings are likely to modestly recover from our 2013 forecasted level, perhaps with profits troughing during the April 2013 earnings season. Our year-end 2013 S&P500 price target is 1434, and our bull and bear targets are 1733 and 1135 (Exhibit 1). Our EPS outlook for 2014 is $110.21, up from our 2013 forecast of $98.71, both well below consensus. Improving Michigan Confidence and tightening corporate spreads drive the relative improvement in our earnings outlook. Please see our Interactive Model: S&P500: 2013 Year-End Forecast, also published today, to play with key assumptions and change assumptions for EPS...
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...Appendix : Comprehensive Cases Case 1: Managing Motivation in a Difficult Economy Learning Goals In this case, you’ll have an opportunity to assess a motivational program designed to re-energize a troubled company’s workforce. Acting on behalf of the company’s executive board, you’ll evaluate the board’s current strategy based on survey data. You’ll also advise board members about improving the effectiveness of this program based on what you’ve learned about goal setting and motivation in organizations. Major Topic Areas • Changing nature of work • Diversity and age • Goal setting • Organizational downsizing • Organizational justice The Scenario Morgan-Moe’s drug stores are in trouble. A major regional player in the retail industry, the company has hundreds of stores in the upper Midwest. Unfortunately, a sharp decline in the region’s manufacturing economy has put management in a serious financial bind. Revenues have been consistently dwindling. Customers spend less, and the stores have had to switch their focus to very low-margin commodities, such as milk and generic drugs, rather than the high-margin impulse-buy items that used to be the company’s bread and butter. The firm has had to close quite a few locations, reversing its expansion plans for the first time since it incorporated. Being that this is uncharted territory for the company, Jim Claussen, vice president for human relations, had been struggling with how to address...
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...wanted to make sure he was giving the best advice to his investment clients. Biovail Corporation was one of Canada's largest publicly traded pharmaceutical companies.1 For many years, Biovail had applied advanced drug-delivery technologies to improve the clinical effectiveness of medicines. The company commercialized its products, both directly (in Canada) and through strategic partners (internationally). Historically, its main therapeutic areas of focus had been central nervous system disorders, pain management, and cardiovascular disease. Biovail's core competency was its expertise in the development and large-scale manufacturing of pharmaceutical products. It leveraged this expertise by focusing on (1) enhanced formulations of existing drugs, (2) combination products that incorporated two or more different therapeutic classes of drugs, and (3) difficult-to-manufacture generic pharmaceuticals. In the United States, Biovail distributed a number of pharmaceutical products. These included Zovirax® ointment and cream (topical anti-viral drugs) and Cardizem® LA (for hypertension), which were marketed by strategic partners. In addition, Biovail distributed a number of branded off-patent products referred to as “Legacy” products. The Legacy products portfolio included the well-known brands Cardizem® CD, Ativan®, Vasotec®, Vaseretic®, and Isordil®. These products were not...
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