Question 1 In what ways can Susan Collyns facilitate the success of CPK? We identify a number of areas in which California Pizza Kitchen can improve on both the operation side and the financial side. However, in this analysis, we will focus on the financial side of CPK. We believe that the CFO, Susan Collyns, can facilitate success of the firm by implementing the following measures: • Increase advertising spending • Increase leverage using debt financing by changing the existing capital structure
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tailpipes, and shock absorbers, is currently carrying out its financial planning for next year. In about two weeks, at the next meeting of the firm's board of directors, Frank Bosworth, vice president of finance, is scheduled to present his recommendations for next year's overall financial plan. He has asked Donna Botello, manager of financial planning, to gather the necessary information and perform the calculations for the financial plan. The company’s divisional staffs, together with corporate
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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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field, related these to the known empirical evidence, and suggested promising avenues for future research. They argued that asymmetric information theories of capital structure are less promising than control-based or product-based theories. The financial crisis of 2008-2009 forces to look critically at the modern level of capital structure theory. The problems of many companies were related to their financing policies. The role of asymmetric information and agency problems has to be understood
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M&M Proposition 1 The Modigliani-Miller theorem forms the basis of modern thinking on capital structure. The theorem states that under a certain market price process, in the absence of taxes, bankruptcy cists, agency costs and asymmetric information, an in an efficient market, the value of a firm is unaffected by how the firm is financed. Whether the firm’s capital is raised by issuing stock or selling debt does not affect the value of the firm. This theory is also referred to as the capital
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FFinance: principles of Finance (part 1) Financial markets and management Valuation of investment Value of investment = value of investment’s cash flows * Concept of present value: value of investment = PV(CF°, CF1, CF2…) Important characteristics of cash flows: * Time: for the same amount of money, now is preferred to tomorrow * Uncertainty: risk and return (1 for sure is preferred to half a chance to get 2) Opportunity cost of capital: Definition: opportunity cost of capital
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the health of America; instead, the United States Department of Agriculture (USDA) should require farmers and producers to provide the healthiest diet for animals to eliminate the health risks of the consumers. Problems Studies indicate that grain fed meats lack key nutrients optimal to the health of America. For almost 50 years most American farmers have been using grain to feed his or her livestock (Pollan, 2006). Grain feeding became prevalent not long after World
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Stock Investment Finance Essay In our modern society, money has become one of the basic factors apart from food, shelter, clothing and medicine that human needs to survive. In practice, it is easy to spend money than making it (Mitchell, 1912). One optimal way to make money is investment but a number of subsequent questions have arisen. What are investment opportunities? Which type of investment options do provide the competitive benefit for investors? And what are the benefits and drawbacks of each
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Chapter 4 The economics of Financial Reporting Regulation The case for unregulated markets for accounting information * Support for unregulated marketing all relate to the incentives for a firm to report information about itself to owners and to the capital market. * Agency theory explains why incentives exist for voluntary reporting to owners. * Wider voluntary reporting to the capital market is explained by signaling theory * The arguments supporting unregulated markets for
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Explore the differences in the Japanese and western investment decision-making processes and the conflicts that arise from there a. Difference in financial theory: American’s companies believed that maximization shareholders wealth were realistic and necessary for the growth of the company. This means that the company’s only social responsibility is to maximize profits; its main responsibility is operate for the best interest of shareholders, the company’s true owners, by maximizing
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