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Corporate Finance Nautilus
Finance & Accounting
Pages 10 (2510 words)
Corporate Finance Nautilus Executive Summary Sales growth is very poor, and the products are not sufficiently balanced or diversified Equity investors cannot be pleased with the company’s performance, which offers very low or negative returns The company is not profitable, as it has been making heavy losses during most of the period under study Assets are not working hard enough, and have been showing steady decline in value Financial leverage has been increasing and is inappropriate, as it is not only high, but is also not accompanied by corresponding growth in assets.
The appropriate discount rate is 6.04%, which is the weighted average cost of capital. The present value of the firm with this discount factor and the predicted cash flows is $12,885,000. Introduction Nautilus Inc. is a Consumer Fitness Products Company founded in 1986 and headquartered in Vancouver, Washington. The company was incorporated in 1993 in the state of Washington. The company targets individuals and enthusiasts who wish to enjoy the benefits of regular exercise and thereby improve their health. The company sells its products through two channels – direct and retail. The main objective of corporate finance is to maximize the value of shareholders by making proper investment and financing decisions. This paper examines the extent to which Nautilus has been successful in meeting this objective, and whether the stocks of the company represent a safe and worthwhile investment. Observations In order to evaluate the performance and financial status of the company, some of the important financial ratios, trends and market information were collected and analyzed. ...
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