Studentshare
Subjects
Business
Financial Management:Benson Corporation

Financial Management:Benson Corporation - Assignment Example

Summary

The financial performance of Benson Corporation, in terms of financial ratios is given below: Ratio Formula 2009 2010 2011 Comment LIQUIDITY Current Current Assets 2.37x 2.36x 1.62x Poor Current Liabilities Quick Current Assets - Inventories 0.87x 0.88x 0.62x Poor Current Liabilities ASSET MANAGEMENT Inventory Turnover Sales 11.42x 12.16x 12.5x OK Inventories Day Sales Outstanding Receivables 7 days 6 days 7 days OK Annual Sales/360 Fixed Assets Turnover Sales 1.82x 1.8x 1.67x Low Net Fixed Assets Total Assets Turnover Sales 1.01x 1.05x 1.03x Low Total Assets DEBT MANAGEMENT Debt to Asset Total Debt 53% 55% 59% High (Risky) Total Assets Time Interest Earned EBIT 2.66x 2.77x 1.73x High (Risky)…

Download full paper File format: .doc, available for editing

GRAB THE BEST PAPER96.1% of users find it useful

Read Text Preview

Subject: Business
Type: Assignment
Level: Undergraduate
Pages: 4 (1000 words)
Downloads: 2
Author: emardeula

Extract of sample "Financial Management:Benson Corporation"

Download file to see previous pages

As compared to its 2009 performance, company seems to be in a much more difficult position. All four major financial aspects (liquidity, asset management, leverage and profitability) of Benson Corporations are prone to severe dangers. Liquidity position of the company is worsening as the current ratio and quick ratio has decreased from 2.37 times to 1.62 times and from 0.87 times to 0.62 times respectively which indicates that the Benson Company ‘s current assets are running short to cover their liabilities.

The only slight satisfactory position of Benson Corporation lies in asset management of the company where the performance of the company seems to be more stable. . Gloomy and dark profitability pictures can also be witnessed as profit margin has severely declined from 3.45% to 2.2%. Return On Assets and Return on Equity also disappointing shareholders as the decrease in ROA and ROE from3.5% to 2.27% and 7.54% to 5.64% can be observed. Cash flows for the Benson Corporation Project $ in million Years 0 1 2 3 4 5 6 Capital Investment (2.000) - - - - - - Cumulative Working Capital (0.200) (0.250) (0.313) (0.344) (0.378) (0.416) - Sales - 1.200 1.500 1.875 2.063 2.269 2.496 Fixed Cash Operating Expense - (0.150) (0.150) (0.150) (0.130) (0.130) (0.130) Variable Cash Operating Expense - (0.480) (0.585) (0.713) (0.784) (0.862) (0.948) Depreciation - 0.600 0.700 0.400 0.200 0.

100 - PBT - (0.030) 0.065 0.613 0.949 1.177 1.417 Tax (30%) - 0.009 (0.020) (0.184) (0.285) (0.353) (0.425) PAT - (0.021) 0.455 0.429 0.664 0.824 0.992 Net Salvage Value of Capital Investment - - - - - - 0.150 Recovery of Working Capital - - - - - - 0.416 Initial Investment (2.000) - - - - - - Operating Cash Inflows (PAT+Dep) - 0.579 1.155 0.829 0.864 0.924 0.992 Incremental Working Capital (0.200) (0.050) (0.063) (0.031) (0.034) (0.038) 0.416 Terminal Cash Inflow (NSV+Rec WC) - - - - - - 0.566 Net Cash flows (Int Inv+OCF-Inc WC+TCF) (2.200) 0.529 1.093 0.798 0.830 0.886 1.

974 NPV at 12% 1.5545 NPV at 12.8% 1.4532 NPV at 13.25% 1.3984 NPV at 13.2% 1.4044 Project Appraisal using NPV Behind the acceptance or rejection of any given project, both financial and non-financial factors need to be considered. On the financial terms, the best measure or tool to evaluate a certain project is to use Net Present Value. NPV approach depicts the present value of expected future cash flows in absolute terms; as a result it

...Download file to see next pages Read More

Cite this document

APA
MLA
CHICAGO

(“Financial Management:Benson Corporation Assignment”, n.d.)
Retrieved de https://studentshare.org/business/1391668-financial-management

(Financial Management:Benson Corporation Assignment)
https://studentshare.org/business/1391668-financial-management.

“Financial Management:Benson Corporation Assignment”, n.d. https://studentshare.org/business/1391668-financial-management.

Cited: 0 times

CHECK THESE SAMPLES OF Financial Management:Benson Corporation

Decisions Based on Data vs Feelings

However, the major role of the corporation is to direct the growth of the production and cost.... On the other hand, the role of plants is to manage the production and cost based on the framed strategies by the corporation (Cohan, 2003).... Analysis It is discussed earlier that too much automation can affect the business operation of a corporation.... Technology management Introduction The major automotive suppliers of Tier 1 have given the significant autonomy to the individual plant in order to foster a strong competitiveness and innovative culture....

6 Pages (1500 words) Research Paper

International Financial Accounting Bosch 2006 annual report

management StructureThe management structure has got an important role to play in the type of accounting system used.... In the words of Hermann Scholl: "Responsible corporate management is partly about striking the right balance - a balance between result focus and values such as responsibility, openness and trust, fairness, credibility,and cultural diversity.... ccording to the 2005 Annual Report the supervisory council is kept informed by the board of management throughout the year and give close attention at its meetings to business developments, corporate strategy, the financial situation, and investment plans....

12 Pages (3000 words) Essay

White Collar Crime and Corporate Crime

Economic or white-collar crimes are performed on a large scale, sophistically such as fraud committed on behalf of organization or against any corporation, and antitrust violations are notoriously difficult to quantify because victims often do not know they have been subject to a criminal offense.... One of the defining characteristics of white-collar crime is their conflicting characteristic both on the one hand of upstanding citizen, in terms of their contribution to voluntary civic activities for example, and on the other criminal, displayed through the harm they caused through their illegal activities (benson, 1984)....

10 Pages (2500 words) Essay

The Regulation of Financial Reporting on Enron

Enron's case has marked history and has been studied from many different perspectives - such as financial, ethical, managerial, corporate governance etc.... Enron is the real wonder of America's largest corporate bankruptcy; which has been in the limelight of the domestic and the international press, the financial people, the organizational behavior and also the ethical proponents.... Here we will, analyze the case mostly from the financial accounting purpose. Enron was found in 1985 from a merger of Houston Natural Gas and Internorth, Enron started of with the first nationwide natural gas pipeline network....

12 Pages (3000 words) Case Study

Human Resources and the Use of Expatriates

Due to the inherent nature of multinational corporations (MCNs) of transcending borders, operational facilities and administrative offices of these conglomerates… However, the sending off of expatriates have been considered as a business undertaking that may be too costly to endeavor as a specialized system to measure the returns on investment is yet to be Furthermore, the ever increasing clamor to mind the working conditions of the expatriates living outside their home countries and in the protection of host countries has been especially resonant with the preponderance of dissatisfaction and failure of MNCs to penetrate local markets....

14 Pages (3500 words) Research Paper

Introduction to Supply Chain Management

From a solely set advance to Supply chain management of the 1970s, we have shifted to a further combined as well as strategic loom.... Therefore, management of… In the contemporary commerce world, corporations are contending not only by means of their merchandise variety and client relationships, but as well by means of their supply chains.... In this, Dell Company has Dell has accomplished to turn into one of the mainstream victorious computer corporations in the human race, by highlighting as well as making straight its strategies with the plan of its management supply chain....

8 Pages (2000 words) Research Paper

Enron and Off-balance Sheet Financing

Such practices had not been blocked by Enron's auditors, Arthur Anderson, and it is claimed that the rules which applied to the company in the US were not robust enough to prevent such accounting practice; this has led to criticism of the auditors and of financial reporting practice and those who regulate it.... In the wake of the collapse, there has been much activity designed to tighten up the rules relating to financial reporting and auditing, including legislation (the Sarbanes- Oxley act) and new rules imposed by the Securities and Exchange Commission and the New York Stock Exchange....

14 Pages (3500 words) Case Study

OCBC Bank Talent Management and Development

At the OCBC learning academy The paper "Oversea-Chinese Banking corporation Talent Management and Development" is a delightful example of a case study on human resources.... nbsp;An Oversea-Chinese Banking corporation (OCBC) has laid a lot of emphasis on training and development of the capacity of its employees.... Question C The approach Oversea-Chinese Banking corporation has used to develop the talent of employees has been a major contributor to the bank's success over its rivals....

3 Pages (750 words) Case Study