1. Based on the economic machine by Ray Dalio, explain a “beautiful deleveraging” including the 4 components and how they work together to achieve a certain result. What is the result? What happens if one of the components becomes relied on too heavily or isn’t applied at all? Explain using one of the components as reference.  – 1 page

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1. Based on the economic machine by Ray Dalio, explain a “beautiful deleveraging” including the 4 components and how they work together to achieve a certain result. What is the result? What happens if one of the components becomes relied on too heavily or isn’t applied at all? Explain using one of the components as reference.  – 1 page

2. Pick ONE brand identified in the article for analysis:  http://blog.hubspot.com/marketing/instagram-best-brands#sm.001vtyczu15drf3lw0c22lwc6rlee

Do you agree that the brand is successful in their marketing plan at large- not just inside Instagram? Point to factors that support your belief.  Using information available about the brand online, outline what you believe the marketing strategy is on a larger scale.  Who is the target audience?  What is the anticipated result?  If you were head of marketing at the brand, what Key Performance Indicators would you use to PROVE that your strategy is working?  How would you allocate resources (people, content, money) to enhance the direction of the strategy?  Identify how the company is funded- is it private, public, where did start-up capital come from (if newer), or what was the product/service that is attributable to the company’s breakthrough in the market (i.e. if an established brand like Apple, you would point to the iMac, sales, strategy, etc…  As a consumer, would you buy this product or service based on the marketing strategy now that you have a deeper understanding of? Why or why not?  – 1.5pages

3. The following article discusses 7 major problems facing the marketing industry:  https://www.ama.org/publications/MarketingNews/Pages/7-big-problems-marketing.aspx

Please select ONE brand/company as if you were the marketing expert and pick ONE of the listed problems to explain how you think this brand has chosen to deal with this issue in a POSITIVE way with a potentially POSITIVE outcome (if issue is yet to be proven successful, list rationale for projected success base on their strategy). 1.5 pages

4. Using the same article as in Question 3, please select a brand/company that you believe has NOT accounted for ONE of the problems identified:  https://www.ama.org/publications/MarketingNews/Pages/7-big-problems-marketing.aspx Explain why you believe the brand/company has failed (economically, socially, strategically? etc…).  Suggest a remedy to resolve this brand/company problem- whether it’s marketing, people, leadership, financially, etc…  Use your lens, the discussions we’ve had in class AND the insights from our guest speakers to guide you in helping to recommend a solution for the brand/company.

1-1.5 pages

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Mini 6

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Read the Chapter 15 Mini Case on page 651-652 in Financial Management: Theory and Practice. Using complete sentences and academic vocabulary, please answer questions a and b.

Using the mini case information, write a 250-500 word recommendation of the financial decisions you propose for this company based on an analysis of its capital structure and capital budgeting techniques. Explain why you chose this recommendation.

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ETHICAL ANALYTICAL FRAMEWORK

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ETHICAL ANALYTICAL FRAMEWORK

1. Recognize the Ethical Issue

· Could this decision be damaging to someone or to some group?

· Is this decision about more than what is legal or most efficient? How?

· What is the ethical issue?

2. Get the Facts

· What are the most relevant facts?

· What is not known but would be relevant?

· What individuals and groups have an important stake in the outcome?

3. Evaluate Alternative Actions

· What are the options or choices for action?

· Evaluate each of the options in the context of the individuals and groups

· Utilitarian Approach

· Which option will produce the most good and the least harm?

· Rights Approach

· Which option best respects the rights of all who have a stake?

· Fairness or Justice Approach

· Which option treats people equally?

· Common Good Approach

· Which option treats the community as a whole?

· Virtue Approach

· Which option leads me to act as the sort of person I want to be?

4. Make a Decision and Test It

· Considering all the alternatives, which one option best addresses the situation? Why?

· What would [my parents, my religious leader, my friends, a TV audience] reaction be to my decision?

5. Act

· How can my decision be implemented with the greatest care and attention to all the stakeholders?

6. Comparison with Business Evaluation

· Evaluate each of these options in the following context:

· Is it legal?

· Impact to business/company in terms of efficiency, profitability, reputation and other relevant parameters

· What would the reaction of my boss/manager at work be?

· What upside potential or downside risk do I get or do I take?

· What decision would you make?

· If your decision is different than that you would make from an ethical point of you, how do you reconcile this?

Problem 3-13

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Problem 3-13
Warner Company Balance Sheet Warner Company Income Statement
Current Assets Recall from reading checkpoint 3.1
to construct an income statement
in this space, adjusting as needed.
(You may delete these instructions.)
Long Term (fixed) assets
Current Liabilities
Long-term Liabilities
Owners Equity
Total liabilities and equity
Q. What can you say about the firm’s financial condition based on these financial statements?
Q. Using the CSU Online Library find one article that discusses financial statements, cash flow, or ratio analysis. Briefly summarize the key points of the article as it relates to this unit. You may use any of the databases, but Business Source Complete is a good starting place.

3-15

Problem 3-15
Answer the following four questions using the information found in the statements.
a. Does BigBox generate positive cash flow from its operations?
b. How much did BigBox invest in new capital expenditures over the last four years?
c. Describe BigBox’s sources of financing in the financial markets over the last four years.
d. Based solely on the cash flow statement for 2010 through 2013, write a brief narrative that describes the major activities of BigBox’s management team over the last four years.

4-25

Problem 4-25
Instructions to use the Solution Template
Step 1 Enter the given values from the textbook on page 116 in the yellow colored cells below.
Step 2 In Cell E52, Calculate Current ratio using formula “Current Assets / Current Liabilities”
Step 3 In Cell E53, Calculate Times interest earned using formula “Net Operating Income/ Interest Expense”
Step 4 In Cell E54, Calculate Inventory Turnover using formula “Cost of goods sold/ Inventory”
Step 5 In Cell E55, Calculate Total Asset turn Over using formula “Net Sales / Total Assets”
Step 6 In Cell E56, Calculate Operating Profit Margin using formula “Net Operating Income / Net Sales”
Step 7 In Cell E57, Calculate Operating Return on Assets using formula “Net Operating Income / Total Assets”
Step 8 In Cell E58, Calculate Debt Ratio using formula “( Current Liabilities + Long-term debt) / Total Assets”
Step 9 In Cell E59, Calculate Average Collection Period using formula “( Accounts Receivable * 365 ) / Credit Sales “
Step 10 In Cell E60, Calculate Fixed Asset Turnover using formula “Net Sales / Net Fixed Assets “
Step 11 In Cell E61, Calculate Return on Equity using formula “Net Income / Owner’s Equity”
Given
J. P. Robard Mfg., Inc.
Balance Sheet ($000)
Cash
Author: Enter the given values from the text book here Accounts receivable
Inventories
Current assets
Net fixed assets
Total assets
Accounts payable
Accrued expenses
Short-term notes payable
Current liabilities
Long-term debt
Owners’ equity
Total liabilities and owners’ equity
J. P. Robard Mfg., Inc.
Income Statement ($000)
Net sales (all credit)
Cost of goods sold
Gross profit
Operating expenses (includes $500 depreciation)
Net operating income
Interest expense
Earnings before taxes
Income taxes (40%)
Net income
Solution
Current ratio
Author: Current Ratio = Current Assets / Current Liabilities Times interest earned
Author: Times interest Earned= Net Operating Income/ Interest Expense Inventory turnover
Author: Inventory Turnover= Cost of goods sold/ Inventory Total asset turnover
Author: Total Asset turn Over = Net Sales / Total Assets Operating profit margin
Author: Operating Profit Margin = Net Operating Income / Net Sales Operating return on assets
Author: Operating Return on Assets = Net Operating Income / Total Assets Debt ratio
Author: Debt Ratio = ( Current Liabilities + Long-term debt) / Total Assets Average collection period
Author: Average Collection Period =( Accounts Receivable * 365 ) / Credit Sales Fixed asset turnover
Author: Fixed Asset Turnover = Net Sales / Net Fixed Assets Return on equity
Author: Return on Equity = Net Income / Owner’s Equity

Part A

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Part A

Explain the cash conversion cycle (CCC). Describe the CCC for your employer or company in an industry in which you’re interested. What are some specific things that your company could do to decrease your cash conversion cycle? Let’s be sure to describe, in pretty specific terms, the CCC for our company and what could be done to shorten it. Minimum 1 page /no plagiarism/cite

Part B

Be sure to show all work and/or use Excel formulas to demonstrate how you arrived at your answer.

Problems 1–7

(16-1). Inventory Management Williams & Sons last year reported sales of $12 million, cost of goods sold (COGS) of $10 million, and an inventory turnover ratio of 2. The company is now adopting a new inventory system. If the new system is able to reduce the firm’s inventory level and increase the firm’s inventory turnover ratio to 5 while maintaining the same level of sales and COGS, how much cash will be freed up?

(16-2). Receivables Investment Me dwig Corporation has a DSO of 17 days. The company averages $3,500 in sales each day (all customers take credit). What is the company’s average accounts receivable?

(16-3). Cost of Trade Credit What are the nominal and effective costs of trade credit under the credit terms of 3/15, net 30?

(16-4). Cost of Trade Credit A large retailer obtains merchandise under the credit terms of 1/15, net 45, but routinely takes 60 days to pay its bills. (Because the retailer is an important customer, suppliers allow the firm to stretch its credit terms.) What is the retailer’s effective cost of trade credit?

(16-5). Accounts Payable A chain of appliance stores, APP Corporation, purchases inventory with a net price of $500,000 each day. The company purchases the inventory under the credit terms of 2/15, net 40. APP always takes the discount but takes the full 15 days to pay its bills. What is the average accounts payable for APP?

16-7). Cost of Trade Credit Calculate the nominal annual cost of nonfree trade credit under each of the following terms. Assume that payment is made either on the discount date or on the due date.

1/10, net 20

2/10, net 60

3/10, net 45

2/10, net 45

2/10, net 40

P

art

A

Explain the cash conversion cycle (CCC). Describe the CCC for your employer or company in

an industry in which you’re interested. What are some specific things that your

company could

do to decrease your cash conversion cycle? Let’s be sure to describe, in pretty specific terms,

the CCC for our company and what could be done to shorten it

.

Minimu

m 1 page /n

o

plagiarism

/

cite

Part B

Be sure to show all work and/or use Excel formulas to demonstrate how you

arrived at your answer.

Problems 1

–

7

(16

–

1). Inventory Management Williams & Sons last year reported

sales of $12 million, cost of

goods sold (COGS) of $10 million, and an inventory turnover ratio of 2. The company is now

adopting a new inventory system. If the new system is able to reduce the firm’s inventory level

and increase the firm’s inventory turno

ver ratio to 5 while maintaining the same level of sales

and COGS, how much cash will be freed up?

(16

–

2). Receivables Investment Me

dwig Corporation has a DSO of 17 days. The company

averages $3,500 in sales each day (all customers take credit). What is th

e company’s average

accounts receivable?

(16

–

3). Cost of Trade Credit What are the nominal and effective costs of trade credit under the

credit terms of 3/15, net 30?

(16

–

4). Cost of Trade Credit A large retailer obtains merchandise under the credit terms

of 1/15,

net 45, but routinely takes 60 days to pay its bills. (Because the retailer is an important customer,

suppliers allow the firm to stretch its credit terms.) What is the retailer’s effective cost of trade

credit?

(16

–

5). Accounts Payable A chain of

appliance stores, APP Corporation, purchases inventory

with a net price of $500,000 each day. The company purchases the inventory under the credit

terms of 2/15, net 40. APP always takes the discount but takes the full 15 days to pay its bills.

What is th

e average accounts payable for APP?

16

–

7). Cost of Trade Credit Calculate the nominal annual cost of nonfree trade credit under each

of the following terms. Assume that payment is made either on the discount date or on the due

date.

1/10, net 20

2/

10, net 60

3/10, net 45

2/10, net 45

2/10, net 40

Part A

Explain the cash conversion cycle (CCC). Describe the CCC for your employer or company in

an industry in which you’re interested. What are some specific things that your company could

do to decrease your cash conversion cycle? Let’s be sure to describe, in pretty specific terms,

the CCC for our company and what could be done to shorten it. Minimum 1 page /no

plagiarism/cite

Part B

Be sure to show all work and/or use Excel formulas to demonstrate how you

arrived at your answer.

Problems 1–7

(16-1). Inventory Management Williams & Sons last year reported sales of $12 million, cost of

goods sold (COGS) of $10 million, and an inventory turnover ratio of 2. The company is now

adopting a new inventory system. If the new system is able to reduce the firm’s inventory level

and increase the firm’s inventory turnover ratio to 5 while maintaining the same level of sales

and COGS, how much cash will be freed up?

(16-2). Receivables Investment Me dwig Corporation has a DSO of 17 days. The company

averages $3,500 in sales each day (all customers take credit). What is the company’s average

accounts receivable?

(16-3). Cost of Trade Credit What are the nominal and effective costs of trade credit under the

credit terms of 3/15, net 30?

(16-4). Cost of Trade Credit A large retailer obtains merchandise under the credit terms of 1/15,

net 45, but routinely takes 60 days to pay its bills. (Because the retailer is an important customer,

suppliers allow the firm to stretch its credit terms.) What is the retailer’s effective cost of trade

credit?

(16-5). Accounts Payable A chain of appliance stores, APP Corporation, purchases inventory

with a net price of $500,000 each day. The company purchases the inventory under the credit

terms of 2/15, net 40. APP always takes the discount but takes the full 15 days to pay its bills.

What is the average accounts payable for APP?

16-7). Cost of Trade Credit Calculate the nominal annual cost of nonfree trade credit under each

of the following terms. Assume that payment is made either on the discount date or on the due

date.

1/10, net 20

2/10, net 60

3/10, net 45

2/10, net 45

2/10, net 40

Test A Test B Test C

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Test A Test B Test C

Disposable syringe $3.00 $3.00 $3.00

Blood vial 0.50 0.50 0.50

Forms 0.15 0.15 0.15

Reagents 0.80 0.60 1.20

Sterile bandage 0.10 0.10 0.10

Breakage/losses 0.05 0.05 0.05

When the tests are combined, only one syringe, form, and sterile ban­dage will be used. Furthermore, only one charge for breakage/losses will apply. Two blood vials are required, and reagent costs will remain the same (reagents from all three tests are required).

1.As a starting point, what is the price of the combined test assuming

marginal cost pricing?

2.Assume that Allied wants a contribution margin of $10 per test.

What price must be set to achieve this goal?

3.Allied estimates that 2,000 of the combined tests will be conduct­ed during the first year. The annual allocation of direct fixed and

overhead costs total $40,000. What price must be set to cover full

costs? What price must be set to produce a profit of $20,000 on the combined test?

7.4 Assume that Valley Forge Hospital has only the following three payer groups:

Number of Average Revenue Variable Cost

Payer Admissions per Admission per Admission

PennCare 1,000 $5,000 $3,000

Medicare 4,000 4,500 4,000

Commercial 8,000 7,000 2,500

The hospital’s fixed costs are $38 million,

1.What is the hospital’s net income?

2.Assume that half of the 100.000 covered lives in the commercial payer group will be moved into a capitated plan. All utilization and cost data remain the same. What PMPM rate will the hospital have to charge to retain its Part a net income?

3.What overall net income would be produced if the admission rate of the capitated group were reduced from the commercial level by10 percent?

4.Assuming that the utilization reduction also occurs, what overall net income would be produced if the variable cost per admission for the capitated group were lowered to $2,200?

8.1

Consider the following 2011 data for Newark General Hospital (in millions of dollars):

Static Flexible Actual

Budget Budget Results

Revenues $4.7 $4.8 $4.5

Costs 4.1 4.1 4.2

Profits 0.6 0.7 0.3

a. Calculate and interpret the profit variance.

b. Calculate and interpret the revenue variance.

c. Calculate and interpret the cost variance.

d. Calculate and interpret the volume and price variances on the revenue side.

e. Calculate and interpret the volume and management variances on the cost side.

f. How are the variances calculated above related?

8.4 Refer to Carroll Clinic’s 2011 operating budget contained in Exhibit 8.3, Instead of the actual results reported in Exhibit 8.4, assume the results reported below:

Carroll Clinic: New 2011 Results

/. Volume:

A. FFS 34,000 visits

B. Capitated lives 30,000 members

Number of member-months 360,000

Actual utilization per

member-month 0.12

Number of visits 43,200 visits

C. Total actual visits 77,200 visits

II. Revenues:

A.FFS $28 per visit

X 34,000 actual visits $ 952,000

B. Capitated lives $ 2.75 PMPM

X 360,000 actual member-months $ 990,000

C.Total actual revenues $1,942,000

III. Costs:

A. Variable Costs:

Labor $1,242,000 (46,000 hours at $27/hour)

Supplies 126,000 (90,000 units at $1.40/unit)

Total variable costs $ 17.72 ($1,368,000 / 77,200)

B. Fixed Costs

Overhead, plant,

and equipment $525,000

C. Total actual costs $1,893,000

IV. Profit & Loss Statement:

Revenues:

FFS $952,000

Capitated $990,000

Total $1,942,000

Costs:

Variable:

FFS $602,487

Capitated 765,513

Total $1,368,000

Contribution Margin $574,000

Fixed Costs 525,000

Actual profit $49,000

1.Construct Carroll’s flexible budget for 2011.

2.What are the profit variance, revenue variance, and cost variance?

3.Consider the revenue variance. What is the component volume variance? The price variance?

4.Break down the cost variance into volume and management components.

5.Break down the management variance into labor, supplies, and fixed cost variances.

6.Interpret your results. In particular, focus on the differences between the variance analysis here and the Carroll Clinic illustration presented in the chapter.