...articulate, concise, and theoretically sound answer. Answers need to be supported with examples from the texts and Exhibits. This may require some due diligence on your part. Please retype the question and your response. 1. How much business risk is associated with Sterling’s proposed acquisition of the germicidal, sanitation, and antiseptic products unit of Montagne Medical? Be sure to define business risk in your answer. 2. Verify the growth rates for sales and inflation (cost of goods sold, CGS) that are described in the case. This can be calculated from the income statement (Exhibit 1). An excel sheet containing the information described in the case can be found on Blackboard. What is the formula for finding the average compounded growth rate? 3. Find the growth rates for the rest of the items on the Income Statement and Balance sheet. Use Sparklines to provide a graphical representation of the trend. 4. Describe why Net Income for Sterling has decreased from 2010 to 2012. 5. Describe the five categories of financial ratios. Create a new tab, ‘Financial Ratios’, and calculate the following ratios for Sterling: Liquidity | Solvency | Asset Management | Profitability | Market Value | Current | Total Debt | Inventory Turnover | Profit Margin | EPS | Quick (Acid Test) | Times Interest Earned (TIE) | Days’ sales in Inventory | EBITDA Margin | PE | Cash | Cash Coverage | Receivables Turnover | ROA | Market-to-Book | | | Days’ sales in receivables...
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...30, 2013 WILLIAM E. FRUHAN CRAIG STEPHENSON Sterling Household Products Company January of 2013 brought a new year and an important new opportunity to the management team of Sterling Household Products Company. Sterling manufactured and marketed a wide line of consumer goods, including laundry products, soaps, cosmetics, toilet preparations, and cleaning, disinfecting and sanitizing products, which were sold domestically and internationally, and were used every day in millions of households around the world. Sterling’s family of quality products included many highly regarded brand names, and the company had consistently delivered impressive sales and profits to the investment community. Sterling’s financial measures for all recent years showed that the company was successful, but a time series analysis of these same financial measures quickly isolated Sterling’s current challenge: growth rates for unit volume, sales, and profits were very low, and company management was looking to expand into businesses and products with more potential for growth. Sterling had identified health care as an industry with more growth potential, and a detailed search for health care products which could fit well into the company’s existing operations led to discussions between Sterling and Montagne Medical Instruments Company. Sterling was interested in acquiring Montagne Medical’s germicidal, sanitation, and antiseptic products unit, and Montagne Medical was willing to sell the...
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...Sterling Household Products Company is a leading manufacturer and marketer of a wide range of customer product that include laundry products, soaps, toilet preparations, cosmetic, cleaning disinfecting and sanitizing products. Sterling Household Products Company has highly trusted and recognized brand names that result in consistent sales and profit investment community. Despite the fact that the company has achieved constant growth in the sales and profit, but analysis of financial measures shows that the growth rates for the unit volume, sales and profit are very slow. Therefore, the company wants to expand into businesses and products with more potential growth. Sterling Household Products Company identified Health Care as a more potential sector and find out one unit of the Montagne Medical Instruments Company to be the best fit into company’s existing operations. Sterling Household Products Company negotiation with the Montagne Medical Instruments Company result in the $265 million as a right price for the acquisition. The Sterling Household Products Company case has four primary learning objectives: 1.To illustrate a situation where one company is acquiring a products unit in a completely different industry. In such a transaction, the risk and required rate of return for the target is different from that of the acquirer; the acquirer’s existing cost of capital cannot be used to value the target, and students should recognize this fact. 2.To present financial information...
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...Sterling Household Products Company Acquisition of the Germicidal, Sanitation and Anitseptic Unit of Montagne Medical Instruments Company Executive Summary Sterling Household Products Company manufactured and marketed a wide variety of consumer goods products which were sold domestically as well internationally. Despite having great products and being positioned well in the industry, Sterling’s growth prospects were limited. Sterling’s decision to acquire the germicidal, sanitation and antiseptic production unit of Montagne Medical Instruments Company could provide the much needed growth. Furthermore, the division was well aligned with Sterling’s existing operations, helping Sterling diversify its business without compromising on its core competency. Assuming the growth rate of 3% for terminal value calculation, aligned with the GDP growth of US, the net present value (NPV) of the investment comes to $99.7 million. We also analyzed the NPV of acquisition under two scenarios - 0% growth and terminal value calculated using multiples of 9. As the acquisition provides immense opportunities for Sterling to further expand its production capacity, we calculate the NPV of $167 million. We firmly believe that Sterling should acquire Montagne Medical’s unit as it presents positive synergistic effect on Sterling’s cash flows. Business Risk The unlevered asset beta represents the pure business risk of the company. It does not take into consideration the effect of debt leverage...
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...Sterling Household Products Company Case Note Adapted from Harvard Business School Sterling Household Products Company (Sterling) is a comprehensive investment analysis case that requires students to consider a broad range of quantitative and qualitative issues in evaluating a significant strategic acquisition. Suggested Questions and Analyses: 1) Determine the risk associated with the proposed acquisition of the germicidal, sanitation, and antiseptic products unit of Montagne Medical Instruments Company (Montagne). Discuss the inputs and assumptions that underlie your calculations. a) What is the cost of equity capital appropriate for evaluating the free cash flows associated with this investment? b) What is the correct capital structure and weighted average cost of capital to use in discounting the investment’s free cash flows? 2) Determine the value of the base case acquisition opportunity. Discuss the inputs and assumptions that underlie your calculations. b) What are the amounts and timing of the investment’s free cash flows from 2013 through 2022? b) What is the terminal value of the final 10 years of the acquisition, as of 2022? c) What is the net present value of this base investment? 3) Determine the value of the follow-up expansion investment opportunity. Discuss the inputs and assumptions that underlie your calculations. c) What are the amounts and timing of the expansion investment’s free cash flows from 2013...
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...accounted for around 70% of the stock of lending to businesses, 75% of the stock of mortgage lending, and 50% of the stock of consumer credit (excluding student loans) at end-December 2014. The report also draws on intelligence gathered by the Bank’s network of Agents and from market contacts, as well as the results of other surveys including the Bank of England’s Bank Liabilities Survey and Credit Conditions Survey.(3) The focus of the report is on lending, but broader credit market developments, such as those relating to capital market issuance, are discussed where relevant. The report covers data and intelligence gathered up to end-March 2015. Unless stated otherwise, the data reported cover lending in both sterling and foreign currency, expressed in sterling. Integration of the Credit Conditions Survey, Bank Liabilities Survey and Trends in Lending The Credit Conditions Survey (CCS) and the Bank Liabilities Survey (BLS) improve the Bank’s understanding of developments in banks’ liabilities and credit conditions. The...
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...WAHINGTON D.C. CAMPUS APRIL 19, 2011 This research plan was made to support introducing the product and service of Dewi Sitha for its business in Silver Jewelry. Dewi Sitha is based in Indonesia and has been in business since 1970. This company is still growing especially in these days where the price of gold is very high. The silver jewelry business is low on cost and high in margin. The retail markup on silver jewelry products is about three to four times the production cost, meaning if cost to produce it is $8 then retailers will sell it for $30. This research paper has three goals: • To identify the Market segment in jewelry business • To discuss the target market for the company. • To conduct SWOT analysis for the better future of the company. • To know the market position of the company’s product and services. Identify the marketing segment for the product and explain why this segment was selected Market segmentation can be defined as the process through which people (both retailers and customers) with similar needs, wants and characteristics are grouped together, so that a jewelry business can use greater precision in serving and communicating with these groups (marketing). When attempting to segment the market for silver jewelry in the jewelry industry, we used demographic (income, age, gender, household composition) and physiological segmentation that we learned in class. According to the well respected...
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...CONTENTS Page(s) 1. Introduction 2. Company Background 3. Swot Analysis 4. Strengths 5. Weaknesses 6. Opportunities 7. Threats 8. Recommendation/ Conclusion APA Referencing 1 1 1–2 3-4 5-6 7 8-9 10 10 - 12 1.0 Introduction The purpose of this report is to identify the factors found in the internal and external environments that could affect Holland and Barrett, a franchise brought to Singapore by the Jay Gee Melwani Group. 2.0 Company Background Holland & Barrett is a leading European brand, selling vitamins, minerals and herbal supplements (Holland and Barrett, 2013). The Melwani Group is a family run business, which represents and markets leading brands like Aigner, Aldo, Levis, Celio, Adidas Kids and many distinctive household brands (Jay Gee Melwani Group, 2013). The company brought Holland & Barrett to the Singapore retail scene and to date, they have 22 outlets (Holland and Barrett, 2013). 3.0 SWOT Analysis We will be adopting the SWOT model of analysis, looking at the strengths, weaknesses, opportunities and threats this business franchise maybe facing, so as to evaluate what are the possible internal and external environments that could affect the business. SWOT is widely used by companies when it comes to strategies planning (Coman, Ronen, 2009, p.1). It is a tool used by management to identify the strengths and weaknesses of a company within the internal environment, as well as opportunities and threats in the external environment (Kotler, P., Keller...
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...qwertyuiopasdfghjklzxcvbnmqwertyuiopasdfghjklzxcvbnmqwertyuiopasdfghjklzxcvbnmqwertyuiopasdfghjklzxcvbnmqwertyuiopasdfghjklzxcvbnmqwertyuiopasdfghjklzxcvbnmqwertyuiopasdfghjklzxcvbnmqwertyuiopasdfghjklzxcvbnmqwertyuiopasdfghjklzxcvbnmqwertyuiopasdfghjklzxcvbnmqwertyuiopasdfghjklzxcvbnmqwertyuiopasdfghjklzxcvbnmqwertyuiopasdfghjklzxcvbnmqwertyuiopasdfghjklzxcvbnmqwertyuiopasdfghjklzxcvbnmqwertyuiopasdfghjklzxcvbnmqwertyuiopasdfghjklzxcvbnmqwertyuiopasdfghjklzxcvbnmrtyuiopasdfghjklzxcvbnmqwertyuiopasdfghjklzxcvbnmqwertyuiopasdfghjklzxcvbnmqwertyuiopasdfghjklzxcvbnmqwertyuiopasdfghjklzxcvbnmqwertyuiopasdfghjklzxcvbnmqwertyuiopasdfghjklzxcvbnmqwertyuiopasdfghjklzxcvbnmqwertyuiopasdfghjklzxcvbnmqwertyuiopasdfghjklzxcvbnmqwertyuiopasdfghjklzxcvbnmqwertyuiopasdfghjklzxcvbnmqwertyuiopasdfghjklzxcvbnmrtyuiopasdfghjklzxcvbnmqwertyuiopasdfghjklzxcvbnmqwertyuiopasdfghjklzxcvbnmqwertyuiopasdfghjklzxcvbnmqwertyuiopasdfghjklzxcvbnmqwertyuiopasdfghjklzxcvbnmqwertyuiopasdfghjklzxcvbnmqwertyuiopasdfghjklzxcvbnmqwertyuiopasdfghjklzxcvbnmqwertyuiopasdfghjklzxcvbnmqwertyuiopasdfghjklzxcvbnmqwertyuiopasdfghjklzxcvbnmqwertyuiopasdfghjklzxcvbnmrtyuiopasdfghjklzxcvbnmqwertyuiopasdfghjklzxcvbnmqwertyuiopasdfghjklzxcvbnmqwertyuiopasdfghjklzxcvbnmqwertyuiopasdfghjklzxcvbnmqwertyuiopasdfghjklzxcvbnmqwertyuiopasdfghjklzxcvbnmqwertyuiopasdfghjklzxcvbnmqwertyuiopasdfghjklzxcvbnmqwertyuiopasdfghjklzxcvbnmqwertyuiopasdfghjklzxcvbnmqwertyuiopasdfghjklzxcvbnmqwertyuiopasdfghjklzxcvbnmrtyuiopasdfghjklzxcvbnmqwer...
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...Introduction Growth is the only evidence of life (Newman, 2010). This statement holds true not only for life but for other things as well. As people evolved, the things surrounding them also did. It won’t be an exaggeration to say that electronics developed out of proportion; since, every day something new is added to the market. Everything boils down to creating value for the customer, all the research and development done by companies is to understand the need of consumers and create a product or service which caters to their need. (Armstrong, 1996) The extent to which a business organisation goes to know their customers is baffling. Coke actually knows how chilled the Can should be when it comes out of the vending machine, it knows how many people like to have coke with their breakfast. Companies go a long way to understand their consumers so that they can provide value, satisfaction and quality. This paper studies how televisions developed over the years, how the needs and wants of consumers changed and what efforts did companies put in to provide the best to the...
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...and Dot is one of the Inc 500 companies that lead in sales for selling premier jewelry. With a signature line of innovative, premium and affordable jewelry, Stella and Dot targets consumers of all ages and backgrounds. Stella and Dot has reinvented the jewelry shopping experience for individuals, groups of friends and families, by selling high quality jewelry at a reasonable price, while being in the comfort of someone’s home. Stella and Dot are known for their home networking technique, in which consumers are able to work as an independent sales representative, selling their favorite jewelry. Our marketing plan will design a product strategy, marketing goals, competitive analysis and different tactics that we will use as a company to achieve a more profitable goal for the upcoming years. With this new marketing plan, we will lay out our budget for the next year to ensure we are utilizing our marketing budget in the best way possible for Stella and Dot. Situational Analysis Stella and Dot is known for their high end, yet very reasonably priced fashion jewelry at home shows. Stella and Dot cliental is primarily woman, since all of Stella and Dot’s jewelry and accessories are for women’s fashion. Stella and Dot have a price range that is reasonable for the working adult that enjoys high quality fashion at a lower cost than shopping at an expensive boutique or store. In today’s business world, finding out who a targeted customer is for a product or how many people in a certain...
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...EXECUTIVE SUMMARY COMPANY HISTORY American Home Products Corporation was created in 1926 when a group of managers from Sterling Products and Household Products resolved on how to cheaply combine their resources in acquiring small companies as cheaply as possible. They successfully created products to have become household names such as Black Flag, Woolite, Chef Boyardee, Easy-Off, Anacin, Preparation H, Sani-Flush, Gulden’s Mustard and Ekco in the line of houseware. One the other hand, their largest and most profitable business included prescription drugs, antihypertensives, tranquilizers and oral contraceptives. The company was able to acquire Anacin, Bisodol Co. (Bisodol laxative), A.S. Boyle Co. (Old English floor wax), Kolynos Co., (Kolynos dentifrices), Wyeth Chemical Co. (Hills nose drops, Jads salts), Midway Chemical Co. (Aerowax), Preparation H hemorrhoid ointment, Three-in-1 Oil and Black Flag insecticide in the 1930s. Their marketing strategy started with a modest advertising budget in 1930 that eventually rose sharply in 1934 as it penetrated radio sponsorships with Blackett-Sample_Hummert. As 1936 entered, Advertising Age figures released that they were already ranking as number 8 advertiser in radio and they were able to maintain this for the rest of the decade. The company’s total spending in radio advertisements rose to more than 2.5 miliion in 1937 and remained as is until World War II. Come 1940s, Amercian Home Products Corporation additional products were included...
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...operates. It highlights where Tesco has developed a competitive edge over its rivals. Potential entrants: Throughout the recession Tesco has continued to invest into expanding the company and developing efficiencies, making it as competitive as ever to defend against the threat of new entrants (Datamonitor, 2010, p. 19). The threat of a new competitor entering this sector is relatively low, due to the huge capital investment required to be competitive and establish a brand identity that stands out. One of Tesco's main advantages is their ability to buy in vast quantities, making them highly price competitive. Along with being the cost leader in many areas, they are also one of the few retailers to offer convenience services, like on-line shopping, home delivery and self-service checkouts. All of which helps to protect them from the threat of new competitors. Subsitutes: There are many substitute options in the food retail sector and there are no switching costs to the consumer. Whereas, the switching costs for Tesco's financial services can be high and therefore a significant deciding factor for the customer. To reduce the risk of customers turning to substitute major food retailers, Tesco expanded into many non-food areas including clothes, telecommunications, electronics and financial products, this provides customers the convenience of satisfying many of their consumer needs at one location. Tesco also expanded into "express stores" to cater...
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...Market Segmentation and Product Positioning John Johnson Prof. XXX Marketing Management – MKT 500 May 2, 2010 1.0 Executive Summary John’s Lawn Service (John’s) is a residential lawn care service. John’s will target suburban middle class homeowners with large yards. A big portion of this demographic is located in John’s surrounding neighborhood. John’s will leverage his association with fellow neighbors to sign up clients. Having a footing in the neighborhood helps create a trust bond that can be leveraged as John’s builds his client base. The mission of John’s Lawn Service is to furnish clients with professional lawn care. The goal is to attract and maintain customers. Services will surpass all client expectations. John’s Lawn Service is a seasonal commercial enterprise. John’s revenue activity occurs from March through November. John’s Lawn Service will target one particular grouping of clients, the suburban middle class. John’s is targeting middle-aged homeowners as they are more than likely to rely on a lawn service. Younger homeowners are more inclined to do their lawns. Additionally John’s will target households that don’t have teenagers at home to help out with the lawn. The median income is $65-$125k, equitable enough to have disposable income for lawn service. John’s Lawn Service will target lawns between 4,000-8,000 square feet. The reason is that the profit margin is higher with larger lawns once you factor in transportation time and price. Only white-collar...
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...RESEARCH PAPER I. Title: Lining Our Silver Box: A Two Phase Study on the Usage, Attitude and Image of Silver Jewelry II. Background of the Study Sterling silver is a material commonly used in making hand-crafted jewelry. It is a silver-alloy made up of 92.5% silver and 7.5% other metals. Sterling silver jewelry is a popular accessory choice among thrifty shoppers who wish to look stylish and trendy. Buyers of sterling silver jewelry can replicate their favorite accessory trends, look and feel stylishly classy, while only paying a fraction of the cost of genuine silver, gold, or platinum. Silver Box started out in 2006 as a small humble company with a mission to design, execute, and distribute sterling silver jewelry creations of best value to Filipinos all over the country. From its initial launch at a Christmas bazaar, the small business has come far, branching out all around the metro. Despite its initial success and the rising demand for silver, Silver Box’s sales have declined. The company needs to have a clearer vision of what target market it is capable of achieving. In addition, Silver Box currently does not subscribe to any particular marketing strategy. For these reasons, this paper aims to conduct a thorough research on the consumers of sterling silver in order to find the appropriate market segments, brand strategies, and plans of action for Silver Box to reach a higher level of profitability. III. Objectives A. To identify the appropriate target...
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