Got a tricky question? Receive an answer from students like you! Try us!

Corporate Finance Nautilus - Research Paper Example

Only on StudentShare
Undergraduate
Author : alana30
Research Paper
Finance & Accounting
Pages 10 (2510 words)

Summary

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…

Extract of sample
Corporate Finance Nautilus

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. ...
Download paper

Related Essays

Corporate Finance
At the time of stock market boom, mergers were more appealing. On the other hand, falling share prices can lead to a company being undervalued, and make it an attractive for acquisition. Mergers and acquisitions can either be value destroyers or value creators that depend on factors like company’s cost of capital, its strategies and decisions and cash flows generated from the business operations The performance is not related to the nature of an industry, instead it was driven by the quality and strategy of management. Good strategy by management can produce good results, on the other hand,…
8 pages (2008 words)
Corporate finance: Expand Ltd Case
The paper tells that firms seek to expand and grow their business after being in operation for some time. This is done for a number of reasons such as increasing profits, satisfying the unique needs of the customers, attracting and retaining more customers and remaining highly competitive. Expansion and growth of businesses can be done through various means. Mergers and acquisitions are ways through which this can be achieved. Mergers and acquisitions simply refer to the aspect of corporate finance, management and corporate strategy that deals with the combining, dividing, selling and buying…
13 pages (3263 words)
Corporate finance
Market efficiency is a crucial factor in deciding the investment strategies of an investor. If the securities market is efficient, the best estimate and returns will be reflected in the price of the shares and there will be no undervalued securities that would offer higher return than expected. However, opposite could be the case in the weak efficient markets. (WOOD, DASGUPTA & POSHAKWALE, 1995) THREE FORMS OF MARKET EFFICIENCY BY FAMA (1970): In this aspect the most contributing work was presented by Fama in 1970. He formulated a market efficiency hypothesis (EMH) which discussed the three…
6 pages (1506 words)
Corporate Finance
However, the application of the IRR technique revealed that the project has an IRR of 20.2% which is less than the rates FCL uses to discount their investments. In consideration of the rate of inflation and the fact that there seem to be no basis for using a 21 per cent and a 26 per cent rate of inflation as suggested in a meeting, the recommendation was made to invest in the project. The basis for this suggestion was that the investment would facilitate an increase in the company’s efficiency. Furthermore, it would help to improve FCL’s image and so allow the company to obtain more…
8 pages (2008 words)
Finance (Corporate)
This meant to give each proposal a chance to convince the capital budgeting committee for approval. The initial project concerned expanding an existing Match My Doll Clothing line, which had a demonstrated record of accomplishment in the earlier period. The subsequent project initiated a fresh initiative referred to as New Doll Film/DVD, which applied an online software permitting users to tailor a doll’s characteristic to the customers’ specifications. This required calculation of the Net Present Value (NPV) of both ventures to discover which project is more lucrative. Simulation Process…
6 pages (1506 words)
Corporate Finance
These are part of the benefits of registering a business as a limited liability entity. In addition to the company being an individual entity from the owners, a limited liability company offers the owners of equity capital to practice risk aversion skills. Owners of equity are not the managers of their organizations. Instead, they delegate this function to other people who they believe are capable of perfectly handling these duties. This way, the owners of equity reduce the likely of a risk of loss happening. Some investors start a business in an industry which they have little knowledge of.…
3 pages (753 words)
corporate finance
Blume (1993) had suggested that CAPM provides a model of equilibrium risk/return relationship. The CAPM also denotes that there exists a linear relationship between expected return and non-diversifiable systematic risk which is denoted as beta. This linear relationship is denoted as security market line (SML). In SML, the systematic risk of a share is compared with the risk and return of the market as well as the risk free rate of return for estimating the expected return of a particular share (Arnold, 2008; Pike and Neale, 1999). Figure 1 Source: (Ogilvie, 2008) CAPM defines risk as an extent…
6 pages (1506 words)