StudentShare solutions
Triangle menu

Hansson Private Label , Inc (HPL) Evaluating an Investment in Expansion - Assignment Example

Extract of sample
Hansson Private Label , Inc (HPL) Evaluating an Investment in Expansion

This would require an investment above $50,000 by HPL which is unprecedented in its history. Hanson’s executives have made cash flow and WACC projections using their traditional estimates as well as some external consulting with banks etc. However, Trucker Hanson is not sure of their methodologies and needs to review it. The initial part of the report performs a qualitative analysis of the company where the key risks and positives for the company are identified. The report then delves into financial analysis where the WACC and cash flow calculations are done. The limitations of these analyses are also discussed. Thereafter, the sensitivity of NPV to various factors is discussed. Finally, the key options in front of Hanson and the corresponding recommendations are discussed. 1. Introduction Hansson Private Label (HPL) is a firm which is exclusively into the manufacturing of private label products for large retailers and supermarkets. ...
Hanson’s managers and executives have tried to evaluate the proposal from various dimensions. However, Tucker Hanson faces a lot of unresolved issues and needs to come to a decision quickly. However, the market growth is quite small and driven by price rise. 2. Key issues and risks The key issues faced by Hanson Private Limited and the risks involved are discussed below: 2.1. Large size of investment The biggest issue HPL faces is regarding the size of the investment. The company has never made such a large investment in a single project at one go. This would practically stall investments into all other projects in the pipeline for the medium term. Hence, the company is not in a position to afford any failure in this project. 2.2. Short Payback Period The retail partner is willing to agree to a 3 year contract only. However, with such a large investment, there is a risk of not getting the money back within 3 years. It is possible that the products fail or are rendered obsolete at the end of 3 years. 2.3. Large debt requirement The company faces a risk of debt trap. Right now, HPL maintains a highly favorable debt position. For adding new capacity, there are constraints in raising money through equity and almost all the financing will have to be done through debt. This raises the risk exposure of the company enormously. 2.4. Intense Competition Hanson manufactures private label products in the personal care space where the competition is very intense. A large number of branded and non-branded companies are vying for a limited shelf space. Hanson already covers 28% of the private label market in personal care space. Therefore, there is a limit to the scope of further acquiring the market share. 2.5. ...Show more


Table of Contents Executive Summary 2 1.Introduction 3 2.Key issues and risks 3 2.1.Large size of investment 4 2.2.Short Payback Period 4 2.3.Large debt requirement 4 2.4.Intense Competition 4 2.5.Stagnant growth in market 5 2.6.Method of evaluation 5 3.Key positives 6 3.1.Huge customer base 6 3.2.Deterrent for other private label manufacturers 6 4.Financial Analysis 6 4.1.WACC and Discount Rate 6 4.2.Limitations of Dowling’s approach 7 4.3.Cash Flow and NPV analysis 9 4.4.Validation of Gate’s projections and Sensitivity Analysis 9 5.Key Options & Recommendations 13 References 14 Executive Summary The report assesses the situation of a company Hanson Private Limited (HPL), which produces …
Author : hodkiewiczloma
Hansson Private Label , Inc (HPL) Evaluating an Investment in Expansion essay example
Read Text Preview
Save Your Time for More Important Things
Let us write or edit the assignment on your topic
"Hansson Private Label , Inc (HPL) Evaluating an Investment in Expansion"
with a personal 20% discount.
Grab the best paper

Check these samples - they also fit your topic

National Branding vs Private Label Branding
In all probabilities, consumers believe that the national brands are typically of higher quality. Whether this belief is factual or not is irrelevant to the outcome in the market, as long as consumers believe it. There is very small difference in quality between some national brands and private brands; yet consumers pay more for the national brands.
3 pages (750 words) Essay
Label and Delinquency (Criminal Justice)
The paper also aimed to assess the explanatory powers of the formal and informal labeling given to delinquents. This study also aimed to assess a model including only theoretically derived labeling variables and background
5 pages (1250 words) Assignment
Development task 2... assignment with label sketch
However, the depth of the trench and the amount of concrete required is greater as compared to deep strip foundation. The first step is to dig the ground and after the digging process, the trench is laid, which is later packed with
2 pages (500 words) Assignment
The Situation of a Company Hanson Private Limited
According to the author of the text, HPL is a firm which is exclusively into the manufacturing of private label products for large retailers and supermarkets. It is also stated that Hanson had 4 plants operating above 90% capacity. Besides, HPL’s largest retail customer has put a proposal in front of the company to make a significant increase in HPL’s share.
7 pages (1750 words) Assignment
Private Unions
Employers have organizational goals to achieve, while workers seek to improve their overall welfare. Coherence between employers and employees is realized from balancing their powers in the actual environment of interaction. Unions,
1 pages (250 words) Assignment
Evaluating Technology
It is with this in mind that I would develop a program that could be taught to various community health workers and nurses that could have the potential of providing them with the necessary skills and education on how to
6 pages (1500 words) Assignment
Investment and Private banking
The author gives recommendations to the UK banking sector. To register more growth and increase the customer base of high net worth individuals, it should open more branches across the UK, it should tighten its IT system to safeguards the funds of the customer seeking personalised services through private banking.
13 pages (3250 words) Assignment
Evaluating Contracts
On the other hand, a cost-reimbursement contract is one where the business will enter into an agreement with the agency, under terms covering the costs of materials; the business
6 pages (1500 words) Assignment
International Expansion
It is also difficult to acquire business operation license in some countries and entrepreneur will incur a lot of money. Foreign investors have to pay government taxes and this
1 pages (250 words) Assignment
Safeway Inc
As one of the largest food retailers, Safeway Inc. demand was affected in many ways. Some of their products that are considered
1 pages (250 words) Assignment
Hire a pro to write
a paper under your requirements!
Win a special DISCOUNT!
Put in your e-mail and click the button with your lucky finger
Your email
Comments (0)
Click to create a comment
Contact Us