INTRODUCTION Beverly Flax and Rick Rosenfield founded California Pizza Kitchen in 1985 in Beverly Hills, California. California Pizza Kitchen is a casual dining, full service restaurant concept that specializes in gourmet pizzas with unique topping combinations. At the end of the second quarter of 2007 they operated 213 locations in 28 states and in 6 foreign countries. The company derives its revenue from three sources: sales at company-owned restaurants, royalties from franchised restaurant
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find a mutually acceptable debt structure that will minimize lender risk while increasing company value. Constraints: 1) realistic cash flow projections, 2) Bank safety levels Situation for each Business Group Bank: Over extended and is in a bad situation. Lending exceeds reasonable levels and is not collateralized or subject to covenants. An $8 million loan is abnormal for the bank. The company’s management does not appear to understand the unrealistic debt situation, the impact on firm
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(GAAP) in determining financial statement content and how companies ensure the accuracy of their financial statements. * Why do we need financial accounting and reporting? * Companies want to raise capital to fund their business * Debt from Creditors/Banks * Investments from Investors (in the form of stock) * Who owns a business? * Investors own a business that is publicly traded. * Investors have managers run that business on their behalf.
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Definition: It is a method of raising long-term debt financing for major projects based on lending against the cash flow generated by the project alone. It is a financial discipline that has developed rapidly over the last 20 years. Project Finance is not the same thing as “financing projects.” Traditionally: In developed countries: • Large-scale public sector projects in developing countries were financed by public-sector debt • Private-sector projects were financed by
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Running Head: Financing Alternatives Lester Electronics Financing Alternative Benchmarking for Bernard Lester University of Phoenix MBA – 540 Introduction In this paper will compare and contrast issues that various companies had experienced in past mergers to the issues presented in the Lester Electronic Scenario. The companies benchmarked are Disney-Pixar, Lucent-Alcatel, Monaco Coach Corporation, SMC Corporation, Infosmart-Cyber Merchants, Fidelity Bank of Nassau, Royal Bank
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Home Depot Financial Analysis Introduction Home Depot is an American public corporation founded in 1978 (Homer, 2011). Home Depot’s shares are listed in the New York Securities Exchange with the abbreviation HD. The company retails construction and home improvement commodities and services. Home Depot runs stores of the big-box format across the United States, Mexico and Canada. Home Depot’s headquarters are in Cobb County, Atlanta. Home Depot is the largest retailer of home improvement products
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mixture of debt and equity it is called Capital Structure. A firm’s capital structure decision includes its choice of a target capital structure, the average maturity of its debt, and the specific types of financing it decides to use at any particular time. The value of a firm’s operations is the present value of its expected future free cash flow (FCF) discounted at its weighted average cost of capital (WACC). The WACC depends on the percentages of debt and common equity, the cost of debt, the cost
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(both debt and equity), or, from an investor's point of view "the shareholder's required return on a portfolio of all the company's existing securities". It is used to evaluate new projects of a company as it is the minimum return that investors expect for providing capital to the company, thus setting a benchmark that a new project has to meet. Cost of debt The cost of debt is computed by taking the rate on a risk free bond whose duration matches the term structure of the corporate debt, then
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corporate debts), easy transferability of ownership, and easier to raise funds. Disadvantages of a corporation are increased taxation and government regulations. 3. Proprietorships and partnerships receive favorable tax treatment compared to corporations and are easier to form than corporations. They are also owner controlled. Disadvantages of proprietorships and partnerships are unlimited liability (proprietors/partners are personally liable for all debts) and difficulty in obtaining financing compared
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corporate debts), easy transferability of ownership, and easier to raise funds. Disadvantages of a corporation are increased taxation and government regulations. 3. Proprietorships and partnerships receive favorable tax treatment compared to corporations and are easier to form than corporations. They are also owner controlled. Disadvantages of proprietorships and partnerships are unlimited liability (proprietors/partners are personally liable for all debts) and difficulty in obtaining financing compared
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