User Account

All Pages

How well run is kd compared to it industry peers

Assignment Help Financial Management
Reference no: EM131224706

Ratio Analysis - The Knee Depot Case

Knee Depot, a building supplies company, has been lagging the rest of the industry in its performance. So the board has brought in a new CEO, Milo T. Barnsworth to fix things. Since he had a strong financial background, the first item on his todo list was to develop a financial planning section to an overall strategic plan.

Barnsworth began by comparing KD's financial ratios to the rest of the industry. Whenever he encountered a substandard ratio, he would meet with the manager responsible to develop a plan to fix it. You have been hired to help Barnsworth finish his analysis of the company so that he can start implementing solutions. To do so, you must answer the following questions based on the financial data provided:

• Given the data provided in Exhibit 1, how well run is KD compared to it industry peers? What are its primary strengths and weaknesses? Be specific, using ratios in your answer. Be sure to also use the DuPont equation in your analysis.

• Use the AFN equation to estimate KD's required external capital for 2013 if the expected 15% growth rate takes place. Assume the 2012 ratios will stay the same.

• How would the following items impact AFN, holding everything else constant: capital intensity, growth rate, increase in A/P, profit margin, payout ratio.

• What is KD's self-supporting growth rate? How would be it affected by changes in the items listed in question 3?

• Forecast the Balance Sheet and Income Statement for 2013. In this scenario (call it the SteadyScenario) operations are not changed in any way. What is the AFN? Calculate the following items: FCF, ROIC, EPS, DPS and ROE. Use the following assumptions:

  • Operating ratios stay the same
  • No additional long-term debt or equity is issued
  • Interest rate on all debt is 10%
  • Any additional funding will be acquired through a line of credit on the last day of the year (thus no interest for 2013)
  • Dividends will grow by 15%
  • Sales will grow by 15%

• Repeat the analysis in question 5, but this time call it the Improved Scenario and assume that KD changes its operations such that it achieves industry averages for the following items:

  • Operating costs / Sales
  • Receivables / Sales
  • Fixes Assets / Sales

Attachment:- Ratio Analysis – The Knee Depot Case .rar

Reference no: EM131224706

Questions Cloud

Which distribution is preferred by a social welfare function : Which distribution is preferred by a Rawlsian Social Welfare Function? Assume that utility is defined as u, = m, and recall that Rawlsian Social Welfare function would be equal to the minimum utility experienced by any person under the allocation
List the specific nutrition issues affecting individuals : Identify your client's cultural background and give clues as totheir socioeconomic statusand psychosocial variables. For example, your patient may be a senior living alone on a fixed income or might be living in a nursing facility with reputed sta..
How have charitable giving programs helped zappos foster : Briefly explain how Zappos has implemented social responsibility programs into its business. How have charitable giving and volunteer engagement programs helped Zappos foster social responsibility?
How incomplete or false information could affect treatment : Write a 300 plus word paper describing how a health care profession would communicate to a patient and how important a full and accurate history is in health care. Give examples illustrating how incomplete or false information could affect treatmen..
How well run is kd compared to it industry peers : Given the data provided how well run is KD compared to it industry peers? What are its primary strengths and weaknesses?
Create case-specific effect-cause-effect logic tree diagram : Use a systems approach to analyze OCI's performance and develop a case-specific "effect-cause-effect logic" tree diagram using the 5-Whys tool. See the rubric for details on what this diagram should contain.
Approaches used by different companies : What transpires in merger scenarios where methods and approaches used by different companies vary?
Would their organ system still be as efficient : Explain how things would change if the organgutang were to be transplanted to a significantly different environment: Would their organ system still be as efficient? Why or why not?
Evaluate how the 21 century paradigms described by ragins : Question: Critically evaluate how the 21st century paradigms described by Ragins and Karm in The landscape of mentoring in the 21st century will impact on the qualities mentors/coaches/professional supervisors need and the roles they have within me..

Reviews

Write a Review

Financial Management Questions & Answers

  Foreign company acquisition

Acquisition by a foreign company and the effects of that decision and the results of foreign exchange in Euro and the exchange rate differences.

  Financial management for profit and non profit organizations

In this essay, we are going to discuss the issues of financial management in a non-profit organisation.

  Method for estimating a venture''s value

Evaluate venture's present value, cash and surplus cash and basic venture capital.

  Replacement analysis

This document show the Replacement Analysis of modling machine. Is replacement give profit to company or not?

  Business finance task - capital budgeting

Your company is considering using the payback period for capital-budgeting. Discuss the advantages and disadvantages of this technique.

  Analysis of the investment

In this project, you will focus on one of these: the additional cost resulting from the purchase of an apple press (a piece of equipment required to manufacture apple juice).

  Conduct a what-if analysis

Review the readings and media for this unit, including the Anthony's Orchard case study media. Familiarise yourself with the Anthony's Orchard company and its current situation.

  Determine operational expenditures

Organisations' behaviour is guided by financial data. In the short term, such data will help determine operational expenditures; in the long term, historical data may help generate forecasts aimed at determining strategic plans. In both instances.

  Personal financial management

How much will you have left over each half year if you adopt the latter course of action?

  Sources of finance for expansion into new foreign markets

A quoted company is considering several long-term sources of finance for expansion into new foreign markets.

  Long term financial planning

This assignment is designed for analyze Long term financial planning begins with the sales forecast and the key input in the long term fincial planning.

  Explain the role of fincial manager

This assignment explain the role of fincial manager, function of manger. And what are the motives of financial manager.

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

Submit Assignment

Academics

Major Subjects

Majors

Get In Touch

whatsapp: +91-977-207-8620

Phone: +91-977-207-8620

Email: [email protected]

TERMS & POLICIES

HELP & SUPPORT

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd