Can you do this project prefectly ? it isabout Business Management

The Ten Commandments of Case Analysis If you observe all or even most of these commandments faithfully as you prepare a case either for class discussion or for a written report, your chances of doing a good job on the assigned cases will be much improved. Hang in there, give it your best shot, and have some fun exploring what the real world of strategic management is all about. To be observed in written reports and oral presentations , and while participating in class discussions . 1. Read the case twice , once for an overview and once to gain full command of the facts; then take care to explore every one of the exhibits. 2. Make a list of the problems and issues that have to be confronted. 3. Do enough number crunching to discover the story told by the data presented in the case. (To help you comply with this commandment, consult the summary guide of financial ratios to prob e of a company's financial condition and financial performance.) 4. Look for opportunities to apply the concepts and analytical tools in the text chapters. 5. Be thorough in your dia gnosis of the situation (make a one - or two - page outline of your assessment). 6. Support any and all opinions with well -reasoned , logical, research - based arguments and numerical evidence; do not say or write "I think" and "I feel" in y our assessment , but instead, rely completely on "My analysis shows … " 7. Develop charts, tables, and graphs to expose more clearly the main points of your analysis. 8. Prioritize your recommendations and make sure they can be carried out in an acceptable time frame with the availa ble skills and financial resources . 9. Review your recommended action plan to see if it addresses all of the problems and issues you identified in a SPECIFIC way – do not be too general . 10. Avoid recommending any course of action that could have disastrous consequences if it doesn't work out as planned; therefore, be as alert to the downside risks of your recommendations as you are to their upside potential and appeal. A SUMMARY OF KEY FINANCIAL RATIONS, HOW THEY ARE CALCULATED, AND WHAT THEY SHOW Profitability Ratios Ratio How Calculated What It Shows 1.Gross profit margin Sales - Cost of goods sold / Sales An indication of the total margin available to cover operating expenses and yield a profit. 2.Operating profit margin (or return on sales) Profits before taxes and before interest / Sales An indication of the firm's profitabilit y from current operations without regard to the interest charges accruing from the capital structure. 3.Net profit margin (or net return on sales) Profits after taxes/Sales Shows after tax profits per dollar of sales.

Subpar profit margins indicate that t he firm's sales prices are relatively low or that costs are relatively high, or both. 4.Return on total assets Profits after taxes/ Total assets or Profits after taxes + interest/ Total assets A measure of the return on total investment in the enterprise. It is sometimes desirable to add interest to aftertax profits to form the numerator of the ratio since total assets are financed by creditors as well as by stockholders; hence, it is accurate to measure the productivity of assets by the returns provided t o both classes of investors. 5.Return on stockholder's equity (or return on net worth) Profits after taxes /Total stockholders' equity A measure of the rate of return on stockholders' investment in the enterprise. 6.Return on common equity Profits after taxes - Preferred stock dividends/ Total stockholders' equity - Par value of preferred stock A measure of the rate of return on the investment the owners of the common stock have made in the enterprise. 7.Earnings per share Profits after taxes - Preferred stock dividends /Number of shares of common stock outstanding Shows the earnings available to the owners of each share of common stock. A SUMMARY OF KEY FINANCIAL RATIONS, HOW THEY ARE CALCULATED, AND WHAT THEY SHOW Liquidity Ratios 1.Current ratio Current assets/Current liabilities Indicates the extent to which the claims of short -term creditors are covered by assets that are expected to be converted to cash in a period roughly corresponding to the maturity of the liabilities. 2.Quick ratio (or acid -test ratio) Current assets - Inventory/ Current liabilities A measure of the firm 's ability to pay off short -term obligations without relying on the sale of its inventories. 3.Inventory to net working capital Inventory/Current assets - Current liabilities A measure of the extent to which the firm's working capital is tied up in inven tory. Leverage Ratios 1.Debt -to -assets ratio Total debt/Total assets Measures the extent to which borrowed funds have been used to finance the firm's operations. 2.Debt -to -equity ratio Total debt/Total stockholders' equity Provides another measure of th e funds provided by creditors versus the funds provided by owners. 3.Long -term debt - to -equity ratio Long -term debt/Total stockholders' equity A widely used measure of the balance between debt and equity in the firm's long - term capital structure. 4.Time s-interest - earned (or coverage) ratio Profits before interest and taxes/ Total interest charges Measures the extent to which earnings can decline without the firm becoming unable to meet its annual interest costs. 5.Fixed -charge coverage Profits before t axes and interest + Lease obligations/ Total interest charges + Lease obligations A more inclusive indication of the firm's ability to meet all of its fixed -charge obligations. A SUMMARY OF KEY FINANCIAL RATIONS, HOW THEY ARE CALCULATED, AND WHAT THEY SHOW Activity Ratios 1.Inventory turnover Sales/Inventory of finished goods When compared to industry averages, it provides an indication of whether a company has excessive or perhaps inadequate finished goods inventory. 2.Fixed assets turnover Sales/Fixed assets A measure of the sales productivity and utilization of plant and equipme nt. 3.Total assets turnover Sales/Total assets A measure of the utilization of all the firm's assets; a ratio below the industry average indicates the company is not generating a sufficient volume of business, given the size of its asset investment. 4.Ac counts receivable turnover Annual credit sales/Accounts receivable A measure of the average length of time it takes the firm to collect the sales made on credit. 5.Average collection period Accounts receivable/ Total sales/365 or Accounts receivable/ Aver age daily sales Indicates the average length of time the firm must wait after making a sale before it receives payment. Other Ratios 1.Dividend yield on common stock Annual dividends per share/Current market price per share A measure of the return to owne rs received in the form of dividends. 2.Price -earnings ratio Current market price per share/ After tax earnings per share Faster -growing or less -risky firms tend to have higher price -earnings ratios than slower -growing or more -risky firms. 3.Dividend pay out ratio Annual dividends per share/After tax earnings per share Indicates the percentage of profits paid out as dividends. 4.Cash flow per share After tax profits + Depreciation/ Number of common shares outstanding A measure of the discretionary funds o ver and above expenses that are available for use by the firm. Note: Industry -average ratios against which a particular company's ratios may be judged are available in Modern Industry and Dun's Reviews published by Dun & Bradstreet (14 ratios for 125 line s of business activities), Robert Morris Associates' Annual Statement Studies (11 ratios for 156 lines of business), and the FTC -SEC's Quarterly Financial Report for manufacturing corporations.