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Finance & Accounting
Pages 5 (1255 words)
The case is about the different ways through which Victoria Chemicals plc can fund the modernization of the Merseyside works project from the corporate headquarters in order to improve its financial performance in order to increase its Earnings per Share.
Earnings per Share are a portion of profit for the company which is allocated to each outstanding share of common stock. The company had been under pressure from its investors for it to improve its financial performance because of the accumulation of the firm’s common shares by a well known corporate raider. The Earnings per Share had fallen from 180 pence per share by the end of 2007 from 250 pence per share by the end of 2006. To increase its earnings per share, the company required to modernize the Merseyside production process which was old. Lucy Morris, the plant manager at Liverpool believes that the funds for the modernization of the Merseyside Works project could be obtained from the corporate headquarters until several questions were raised. It is therefore quite important for the plant manager and Frank Greystock the controller to address and analyze each question keenly. Based on these issues, Morris will determine the way forward towards modernizing the Merseyside Works project. This way forward includes the analysis of the project in different aspects to determine whether its implementation will be for the good of the overall company. The plant manager will have to choose which category the product lies on based on whether it is a new product or market, market or product extension, engineering efficiency and safety or the environment. ...
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