Ethical Dilemmas in Business

Ethical Dilemmas in Business
Ethical Dilemmas in Business

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Ethical Dilemmas in Business

Purpose: 

In the first assignment, you have the opportunity to gain an understanding of how to identify different types of ethical dilemmas that occur within business, apply ethical theories to solve dilemmas, and after comparing the results, take a critical stance of determining a theorist who can best address all three dilemmas. 

Outcome Met by Completing This Assignment:

  1. Identify ethical issues that arise in domestic and global business environments using an understanding of ethical concepts and of legal and business principles
  2. Develop and evaluate alternatives to, and recommend solutions for, ethical dilemmas, taking into account ethical and legal requirements and the essential mission of the business enterprise
  3. Effectively communicate to internal and external business stakeholders the complexities of ethical issues, suggesting and analyzing various solutions in order to ensure appropriate business practices and accountability

NOTE: You are expected to understand the Academic Dishonesty and Plagiarism Policy, and know that it is your responsibility to learn about instructor and general academic expectations with regard to proper citation of sources as specified in the APA Publication Manual, 6th Ed. (Students are held accountable for in-text citations and an associated reference list only). 

Ethical Dilemmas in Business

Instructions: 

Step 1: Create the introductory paragraph. 
Within this paragraph, provide a brief overview of the scenario. Then, provide a thesis statement and tell the reader the main topics covered in the paper. The introductory paragraph is the first paragraph of the paper. View this website to learn how to write an introductory paragraph: http://www.writing.ucsb.edu/faculty/donelan/intro.html

Step 2: Read critically and analyze the case scenario under Week 3 Content area. 

Step 3: Identify and discuss the three business dilemmas and one personal dilemma presented in the case scenario. Explain the facts that you have relied upon to make the selection. Use the course material to support your reasoning and conclusions.

Step 4: Identify and discuss the common ethical issues categories to which each of the three business dilemmas belong. Use the course material to support your reasoning and conclusions.

Step 5: State each dilemma in question form and then apply the ethical theories of Kant, Rand, and Bentham to answer the question: How would each of these theorists solve the dilemma? You need only chose one theorist per dilemma but all three theorists must be used in discussing the three dilemmas. Explain in detail how the conclusions were conceived using the class material, the facts from the case scenario, and any additional resources necessary to define the answer.

Step 6: In a final paragraph, compare the results and select one theorist who would best solve all three dilemmas. Since this last part is reflective of your personal opinion, be sure to support the conclusion with the class material, facts from the case scenario, and a definition of any personal ethical values that influenced the decision process. 

Step 7: Proofread the paper for spelling and grammatical issues and third person writing as this assignment requires college-level writing.
Use the spell and grammar check in Word as a first measure;Have someone who has excellent English skills to proof the paper;Consider submitting the paper to the Effective Writing Center (EWC). The EWC will provide 4-6 areas that may need improvement.

Step 8: Submit the paper in the Assignment Folder (The assignment submitted to the Assignment Folder will be considered a student’s final product and therefore ready for grading by the instructor. It is incumbent upon the student to verify the assignment is the correct submission. No exceptions will be considered by the instructor).

Ethical Dilemmas in Business

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Ethical dilemmas in business

Introduction

The maximization of profits, minimization of expenditure and the expansion of any venture are some of the core objectives that every business strives to achieve. In a bid to reach these objectives, there are various issues that businesses, both domestic and global grapple with. They include legal concerns, customer satisfaction, dealing with employees at every level, ensuring that the management understand the objectives of the business and strive to achieve them and lastly ethical concerns.

In the making of decisions that affect the business, most of the decision makers grapple with ensuring that the said step taken is considered as right. This is all in an effort to ensure that they keep their customers loyal as well as attract new ones and also maintain the motivation of their employees to always strive to be the best. The major obligation in businesses however lies in distinguishing of good and evil.

There are ethical issues that have to be looked at that many businesses include, the mechanisms put in place to guide the hiring and termination criteria of their employees, the process of making decisions, the maintenance of trust and issues of integrity, the internal policy that deals with managing diversity in the business and how the business handles compliance and governance issues. All these have to also be looked at through the legal lenses to ensure that the domestic and international legal obligations are met in the management of a given business. In the case provided, there are various issues, both legal and ethical that needs to be addressed with regards to the conduct of Kerry and Nunez.

The issues this paper intends to deal with are the dilemmas that businesses face every day when their agents violate set legal and ethical rules in pursuit of landing business deals.

Ethical issues in business

There are various issues that businesses face every day with regards to the actions and decisions made. Many of these are looked at within the context of right or wrong. In the case the ethical dilemmas that presented themselves include fundamental issues that affected the trust and confidentiality agreement between Nunez and the ALE, the issues with regard to decision making in terms of who to share the business secrets with and matters to touch on governance and compliance with the legal and policy issues.

Kerry however had a personal dilemma with regards to alerting the management of the business of the conduct unbecoming by Nunez in him sharing the confidential information about the business secret with a potential client to gain competitive advantage. This was despite the advantage it gave them in clinching the contract.

In the sharing of the business secret with Milan, Nunez wanted to gain contractual advantage in order to clinch the multimillion dollar contract. This violates the fundamental principle of trust between an employer and their respective employee. It also puts the reputation of the business at risk as the secrets were unknowingly sent to all his twitter contacts hence the confidentiality of the business with other business partners put at risk. In the world of business, the issue of trust is key to the acquisition and retention of partners (Poppo, Zhou and Li, 2016). Despite the advantageous position the sharing of such information gave, the confidence and trust of the other business partners was equally important.

Another issue that is raised by the sharing of the business secret is the protection of intellectual property rights of trade secrets. As a scientific venture, the profitability and the commercialization of the trade secret in the design of their product is key. The employment relationship is governed by several written and unwritten rules that are all made to safeguard the interests of the business (Milgrim and Bensen, 2016).

In sharing of the information, the trade secret that was initially protected now ceases to have that advantage and hence the competitive advantage as well as the profitability of the methods ALE used in maintaining an edge in the production of plant products. This is because the duration given to legally protect the trade secret can be extended indefinitely as long as it is kept confidential in addition to remaining commercially viable under the Uniform Trade Secrets Act, 1979.

The same case also applies to Kerry since he failed to inform the relevant authority, Joshua Hellman of the said breach. This has an effect on the level of trust and confidence bestowed upon him. Due to his silence, the issue of trust and confidence in him was also affected.

The ethical dilemma here is the acquisition of a contractual advantage to the business as against the protection of the secrets that have ensured the business maintains it competitive and profitability advantage over the rest. In leaking the business secrets to Milan, the issue of trust and maintenance of confidentiality for both Kerry and Nunez is brought to light.

The Kantian theory posits that the actions of one are an indication of the respect they have to the other. It also points to the fact that for the maintenance of relationships trust is crucial. In this case however, the actions by Kerry and Nunez have led to a breakdown in the trust the business had in them to conduct business as their agents…….

Ethical Dilemmas in Business

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Multinational Enterprise: International Finance Paper

Multinational Enterprise
Multinational Enterprise

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Multinational Enterprise

Order Instructions:

Please comment/answer the following two questions:

1. What are the main reasons that the cost of capital for a MNE tend to be lower than a domestic counterpart domiciled in the same country?
2. Describe a situation/reasons where the cost of capital for a purely domestic firm might be actually lower than for a MNE that is headquartered in the same country.

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Multinational Enterprise

Reasons why the cost of capital for an MNE tend to be lower than a domestic counterpart domiciled in the same country

A multinational enterprise operating in the global and international markets will tend to have a lower cost of capital. There are a number of scenarios and reasons for this phenomenon. A first is that the MNE has access to a wide array of capital markets, and hence a choice of more sources of funding (Moffett, Stonehill, & Eiteman, 2015, p. 292). Within these sources, there is a high probability of finding capital at a lower cost than is available in their home country.

A second reason is that the portfolio of securities available to a firm with operations in one country is only appealing to a small circle of investors within that state. On the other hand, an MNE has a portfolio of securities that appeal to both local and international investors (2015, p. 293).

A situation and/or reasons where the cost of capital for a purely domestic firm might be actually lower than for an MNE that is headquartered in the same country.

In some countries, the capital markets are well developed. Such scenarios are primarily in the economies where there is a high dependence on manufacturing……

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Constructing Effective Business

Constructing Effective Business
Constructing Effective Business

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Constructing Effective Business

Order Instructions:

1. Select a product or service for this assignment in which you believe your organization should invest capital resources to develop for sale in a global environment.
2. Review Ch. 4 of Business Communication Essentials.
3. Create a Microsoft® Word analysis of no more than 1000 words that includes the following:
A. Describe the product or service, including its main characteristics.
B. Why do you believe this product is worthwhile?
C. A profile of your audience/s. Why are these audience/s important? How different would you approach each audience?
D. Explain how you would establish credibility.
4. Explain why you selected the channel.
5. Select the appropriate channel for delivering your message based on context, audience, and purpose.

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Constructing Effective Business

For this assignment, the selection of a product that should sell in the global marketplace is critical. The product should be one that the organization is willing to spend capital resources on for it to develop as a global brand. This paper will look into the characteristics of the chosen product and explain why it is worthwhile. In addition, a profile of the various audiences, their importance, and the different approaches are outlined, as well as an explanation on establishing credibility and the rationale behind the selection of a suitable channel for business communications.

A description of the main characteristics of the product

The product of choice that will be developed by the organization is an environmentally friendly bag. The bag is reusable as opposed to the single-use alternatives used in most retail stores and homes today. This eco-friendly bag will be produced in several shapes and sizes and targets to replace the single-use plastic bags. The bag has a special feature where it completely decomposes down in ten days.

Once thrown into a pit, which is the recommended method of disposal, the bag should be watered and covered with earth, and the decay process begins. The bag is made from natural materials that are interwoven to create a strong fabric. This strength enables users to carry heavy loads without the bag ripping apart.

Why the product is worthwhile

The proposed product is important not only to the firm but also to the society. The eco-friendly bag is a worthwhile project for the organization to invest in due to the effect it would have on the environment. The replacement of plastic carrier bags and especially the single-use plastic bags should help reduce the levels of environmental pollution caused by the polythene bags that are currently in use around the world (Bucher, Drake-Brockman, Kasterine, & Sugathan, 2014).

In addition, once the user has the ability to use the bags for multiple tasks over the lifetime of the eco-friendly bag. Once the environmentally friendly bag completes its usefulness, it is buried and becomes beneficial as a form of organic manure. This should lead to a reduction of the over-dependence on various types of fertilizers on enriching the soil.

A profile of the audiences

            The communication messages targeting the proposed environmental friendly bag has a number of audiences. The profile of the product’s audience is composed of governments and government agencies, retail stores, and individual users.

Why the audiences are important

The three identified audiences are important for various reasons. Firstly, the three audiences are direct and indirect users of the plastic bags that the eco-friendly alternative aims to replace. Second, the environmental impact of the garbage caused by the single-use polythene bags affects all three, as do the costs of environmental maintenance. A third reason is that the three groups are important beneficiaries of the better agricultural practices boosted by the use of the bags as manure after they are disposed of. The three groups are the target customers of the proposed product and, therefore, the audiences of the business communication.

Constructing Effective Business

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International Joint Ventures

International Joint Ventures
International Joint Ventures

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International Joint Ventures

Order Instructions

The Board of Directions of an International Joint Venture Company must take important strategic decisions about the direction of the collaboration. Therefore, in setting up a new JVC, it is essential to consider how such decisions would be made. taking into consideration the desire of partners to expert an “appropriate” level of control over their JVC:
(a) Critically compare the relative merits and limitations of making decisions by vote or by consensus (through power of veto)
(b) if consensus is needed but then cannot be reached on a vote concerning a significant issue for the business, what options do the partners have to move forward? 

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International Joint Ventures

Introduction

            The concept of joint venture companies has been instrumental in the success of various firms across the world. The most common of these being strategic and international joint ventures, where two or more independent firms come together in a bid to conquer a market that neither of them would have achieved as individual entities (London Business School Review , 2013; Anderson, 1991, pp. 19 – 20). Prior to the success from the establishment of international joint ventures, a lot of work in terms of planning goes into the formation of the joint venture.

Among the critical points of the planning process involves the definition of terms of the joint venture agreement. Key among the terms in the agreement is the structure, control, and voting procedures of the board of directors of the joint venture company (Gutterman, 2017; Yan & Luo, 2016, pp. 87 – 89). Such terms in the preliminary stages of the formation of the joint venture outline, among others, the use and direction of decision-making tools.

Such tools include the use of veto power and the sharing, or lack thereof, of voting rights between the partners who make up the joint venture. This paper looks to expound on the use of voting as a tool to reaching a consensus within the board of directors of a joint venture company and the options available to them if there is no consensus on a vote.

Decisions by vote or consensus

            During the course of operations, the board of directors in the strategic international joint venture will have to make many decisions regarding an array of issues. In spite of the issue at hand, there will be a need for consensus among the board members. Various decision tools are useful during such times, including authoritarian decisions, brainstorming, and voting. Of these examples, most international strategic joint ventures opt for the use of voting, since it provides a conclusive decision based on majority (Demirbag, 1997, pp. 143 – 146).

Other closely related options include the use of veto power and reaching a consensus through discussions before putting the issue at hand to a vote. The section below looks into the use of voting in an international joint venture by enumerating the various merits and limitations of using voting as a decision-making tool within the organization.

Merits of making decisions in a joint venture by vote

            The use of the voting method as a decision-making method in a joint venture entails the casting of ballots to decide on an issue at hand. All the members of the board of directors will have a reasonable if not total understanding of options prior to casting of the votes. A key advantage of using this method is the ability to combine individual skills, strengths, and knowledge into a formidable block to push for decisions and relevant changes. Members with similar ideology will unite and provide a united front to discuss the ideas from a varied viewpoint in terms of skills and contributions toward the needed changes.

            The use of the voting method for decision making in a joint venture company helps provide a unified front for the board of management. In this case, once the board completes the voting process, they come together and discuss the next steps. This allows for the enhanced understanding of the criterion of the decision, as well as the presentation of a collective effort to engage and act on the decision made. This is imperative to the continued operations of the joint venture organization and allows for fluid operation of the company through a united front from the directors.

            By using the voting method, there is a sense of an enhanced commitment from the entire board of directors. The engagement of all the members of the board in the process instils a sense of belonging and camaraderie. In addition, in spite of their leaning on the decisions, the participation in the voting process and the implementation ensures a greater commitment from the entire team. This sense of commitment and belonging spurred by the voting method is vital to the effectiveness of the board in carrying out their mandate within the organization.

            The method of voting as a decision making instrument in a joint venture will serve to inspire a sense of team spirit among the directors. The choice of voting helps bring together individuals with different points of view to collaborate on implementing a given task. In addition, the process serves as a team building activity through constant interaction with other board members who may not meet too often. This enhancement of team spirit allows the board to operate better together in times of unity and disagreement.

            The use of voting in a joint venture is useful when the board of directors is pressed for time. When the directors need to make a quick decision on the direction that the firm should take on a given matter, a vote helps since it may be conducted in a single sitting from the individual views of the members. Such a scenario does not require prior engagement and the decision is made in a matter of a few hours. This allows for the quick turnaround on time-bound decisions that could be potentially beneficial to the organization.

            In the same light of the ability to use the voting as a fast-paced method of decision-making in a joint venture company, the board of directors may use the method to eliminate non-critical decisions. At some point in the operation of the organization, the board will be faced with the challenge of making a number of simultaneous decisions that are time bound. In such a scenario, the use of voting could help the directors to eliminate the non-critical decisions quickly, thereby leaving room and time for discussions on the more demanding issues.

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Businesses and the Balanced Scorecard

Businesses and the Balanced Scorecard
Businesses and the Balanced Scorecard

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Businesses and the Balanced Scorecard

Compute activity-based costing rates for a law firm, and then write a 1–2-page analysis of the role of the balanced scorecard approach to performance management.

By successfully completing this assessment, you will demonstrate your proficiency in the following course competencies and assessment criteria • Competency 3: Operate service-based cost accounting systems.

Compute activity-based costing for a service business.o Compute budgeted overhead rates for cost pools.
• Competency 4: Apply cost analysis to assist management decision making.
o Analyze the impact of preparing a balanced scorecard on a business strategy plan.
o Compare and contrast three organizations’ use of the balanced scorecard approach.

Context

In contrast to a job-costing system that collects costs for each unit produced, process-costing systems accumulate costs in a department for an accounting period and spread them evenly, or average them, over all units produced in that accounting period. For example, a print shop collects costs for each order, a defense contractor collects costs for each contract, and a custom homebuilder collects costs for each home that is built.

Process costing is used when it is not possible or practical to identify costs with specific lots or batches of product. Process costing assumes that each unit produced is relatively uniform. If a product moves through various stages during its assembly or creation, it is likely that the costs were accumulated by the department and applied at the end of the assembly line. For example, it is probably not important for Intel to know whether the cost of the 10,001st microprocessor chip is different from chip number 10,002, particularly if the unit cost is calculated primarily to value inventory for external reporting purposes.

Businesses and the Balanced Scorecard

Resources

The following resources are required to complete the assessment.
• Assessment 5 Template.
• Cutler, T. R. (2010). The language of cost. Industrial Engineer, 42(9), 47–50.• Jagolinzer, P. (2000). Cost accounting: An introduction to cost management systems. Cincinnati, OH: South-Western College Publishing.• Kren, L. (2014). Tracking value created by efficiency improvements in a traditional overhead cost management system. Engineering Management Journal, 26(1), 3–7.

• Lee, R. T. (2013). Target: Carrying costs. Industrial Engineer, 45(8), 38–42.• Marshall, P. D., & Dombrowski, R. F. (2003, February/March). A small business review of accounting for primary products, byproducts and scrap. National Public Accountant, 10–13.
• Pachura, R. (1998). When is enough, enough?. IIE Solutions, 30(10), 33–35.• Rao, S. S. (1997). ABCs of cost control. Inc. Tech, 19(9), 79–81.• Rikhardsson, P. M. (2004). Accounting for the cost of occupational accidents. Corporate Social – Responsibility and Environmental Management, 11(2), 63–70.• The payroll handover. (1997, August). Management Today, 13.
VanDerbeck, E. J. (2013). Principles of cost accounting (16th ed.). Mason, OH: South-Western Cengage Learning.o Chapter 9.

Businesses and the Balanced Scorecard

Assessment Instruction

For this assessment, complete the following two parts:

Part 1: Use the Assessment 5 Template (linked in the Resources) and the scenario it contains to compute activity-based costing rates for a law firm. Also compute the budgeted overhead rates for each of the three cost pools identified in the template.

Part 2: Consider what you know about cost accounting and service businesses as you write a 1–2-page analysis that addresses the following:
1. Analyze the reasons a company should bother with a balance scorecard approach to performance measurement when its primary goal is to earn a sufficient return on investment for its shareholder.
2. Search online for and examine organizations currently using the balance scorecard as part of their financial and strategic planning. Select three different companies or organizations, and compare and contrast their use of the balance scorecard approach.

Write your analysis in Microsoft Word. Use 12-point font, and double space. Follow APA style for citations and references.
Submit both the completed template and the Microsoft Word document for this assessment.

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Businesses and the Balanced Scorecard Essay

Balance score card is the current approach used by the management as thinking, it consists of both financial and non-financial indicators. Balance score card is based on three areas which are responsible for the success of the company (Shutibhinyo, 2013). The areas that balance score card do focus on; financial perspective, internal business perspective, learning and growth and customer perspective.

Financial perspective; this is a perspective that is modified the company performance by comparing market future price or value of the stock with the current value.  The second area that balance scorecard puts an emphasis on is the customer perspective; this is how company customers view the company (Shutibhinyo, 2013). Under this perspective, there are four areas that the company should consider. These include customer satisfaction, customer loyalty, and acquisition of customers and market share of the company.

The third perspective is the internal business perspective; this perspective gives an idea of how a company can stay ahead of its competitors by emerging the top in the market. A company has to review its internal structure to ensure that both customer’s demands and shareholder’s interests are considered in order for the company to reach the higher limits set by management.

The fourth and last perspective of balance scorecard is learning and growth perspective; a company must be innovative in order to achieve its growth desires. Company growth involves having competence staff and degree of uniqueness of the products that a company produces. Staffs should set their profession to match any technical changes for example change in tax laws. This is needed for full customer satisfaction and improve the corporate image (Shutibhinyo, 2013).

This approach is used by companies because it is based on both financial and non-financial performance. The approach focuses on maximizing the shareholders wealth and meeting consumer demands. Non-financial issues that balance score card address ii customer satisfaction, self-motivation, and innovation…..

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Company Performance Analysis

Company Performance Analysis
Company Performance Analysis

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Company Performance Analysis

ORDER INSTRUCTIONS:

Please read the cases 10 and 12 and answer the following questions

Assignment of case 10

1)  Review the two exhibits for Lowe’s & Home Depot (Exhibit 7 and 8). Examine ratios. See the excel file of case 10.

Prepare ratios for Lowe’s, using data from exhibit #5, which should be identical to those in exhibit 7 modeled by Home Depot. See below:

Fiscal year
19971998199920002001
Working capital (CA-NIBCL*)
Fixed assets
 Total capital
Tax rate
 NOPAT (EBIT*(1-t))
Return on capital (NOPAT/Total capital)
Return on equity (Net earnings/S. Equity)
Gross margin (Gross profit/Sales)
Cash operating expenses/Sales
Depreciation/Sales
Depreciation/P&E
Operating margin (EBIT/Sales)
NOPAT margin (NOPAT/Sales)
Total capital turnover (Sales/Total capital)
P&E turnover (Sales/P&E)
Working capital turnover (Sales/WC)
Receivable turnover (Sales/AR)
Inventory turnover (COGS/M. inventory)
Sales per store ($ millions)
Sales per sq foot ($)
Sales per transaction ($)
Total sales growth
Sales growth for existing stores
Growth in new stores
Growth in sq footage per store
 Total Capital/Equity

Which firm is the better performing one? On what basis do you conclude the better performance?

2) Who deserves the “Management of the Year” award in the retail building-supply industry? Compare based on 2001 firm performance.

  • Conduct DuPont analysis for both two firms and analyze their return sources?ROE=(NI/sale)*(sale/total capital)*(total capital/total equity)

*Prepare a DuPont analysis to evaluate the differences in performance?

  • Why the two firms have the same beta (exhibit 3), but the WACC are different?
    • Compare the two firms return on capital in 2011.
      • According to ROC, which one is better?
      •  Consider their WACC.
    • Which firms stock performs better during 2001? Why?
    • What is the bottom line to measure manager performance? Future or history?

3) How does the Home Depot forecasting model work? Why do we use ratios to forecast financial statements?  Hint: walk through the mechanics of the model, focusing on the 2002 forecast (exhibit 8)?

Company Performance Analysis

Assignment of case 12

  1. What is the current situation?
  2. Why did the company run out of cash? Think of the source and use of cash.
  3. What are the consequences for the company?
  4. what is the effect of running out of cash to the company?
  5. What are Kumar’s alternatives for action? And the effect and feasibility of each possible action:

1: Slower growth:

2: Improving profitability

3: Cutting dividends

4: reduce investment

  • What impact might the below two proposals have on the financial needs of the firm?

a): Proposal from the transportation manager to reduce raw material inventory.

b): Proposal from the operations manager to level production.

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Company Performance Analysis Essay

Ratio analysis for Lowe’s

VALUE LINE PUBLISHING, OCTOBER 2002
Ratio Analysis for Lowes
Fiscal year
19971998199920002001
Working capital (CA-NIBCL*)7721,0121,4601,5392,063
Fixed assets3,1103,7595,3197,2018,816
 Total capital3,8814,7716,7798,73910,879
Tax rate38.9%39.2%39.0%38.8%38.6%
 NOPAT (EBIT*(1-t))3815077158581,104
PROFITABILITY
Return on capital (NOPAT/Total capital)9.8%10.6%10.5%9.8%10.1%
Return on equity (Net earnings/S. Equity)13.7%15.4%14.3%14.7%15.3%
MARGINS
Gross margin (Gross profit/Sales)26.5%26.9%27.5%28.2%28.8%
Cash operating expenses/Sales18.0%17.9%18.0%18.5%18.3%
Depreciation/Sales2.4%2.2%2.1%2.2%2.4%
Depreciation/P&E8.0%7.5%6.5%5.8%6.2%
Operating margin (EBIT/Sales)6.2%6.8%7.4%7.5%8.1%
NOPAT margin (NOPAT/Sales)3.8%4.1%4.5%4.6%5.0%
TURNOVER
Total capital turnover (Sales/Total capital)2.62.62.32.12.0
P&E turnover (Sales/P&E)3.43.43.12.72.6
Working capital turnover (Sales/WC)13.112.110.912.210.7
Receivable turnover (Sales/AR)85.685.1107.5116.6133.5
Inventory turnover (COGS/M. inventory)4.34.34.14.14.4
Sales per store ($ millions)21.323.527.628.929.7
Sales per sq. foot ($)254.3256.2279.1277.1274.0
Sales per transaction ($)43.945.753.254.956.0
GROWTH
Total sales growth20.8%29.9%18.1%17.7%
Sales growth for existing stores10.8%17.3%4.6%2.9%
Growth in new stores9.0%10.8%12.8%14.5%
Growth in sq. footage per store10.0%7.6%5.4%4.0%
LEVERAGE
 Total Capital/Equity1.491.521.441.591.63
*Non-interest-bearing current liabilities

Company Performance Analysis

Which firm is the better performing one? On what basis do you conclude the better performance?

The analysis indicates that Home Depot is performing better than Lowe’s. The basis of this conclusion is a number of performance metrics and ratios from the analysis above. For example, in terms of profitability, Home Depot has a consistently higher return on capital and as well as a return on equity compared to Lowe’s. In terms of margins, Home Depot also had a consistently higher gross margin, operating margin, and NOPAT margin during the period.

In terms of the turnover, Home Depot has a higher turnover result from their capital allocation, P&E, working capital, and inventory. In addition, average of the sales per store, sales per square foot, and sales per transaction is higher for Home Depot than Lowe’s.

In terms of growth, the average is higher in each metric for Home Depot than that of Lowe’s. In each case, the average of the period is higher for Home Depot than Lowe’s. This implies that the growth in total sales, the growth of sales in the existing stores, the growth in new stores, is higher for Home Depot than it is for Lowes during the same period. As such, the various metrics and financial ratios in the analysis above point towards better performance for Home Depot compared to Lowes.

Who deserves the “Management of the Year” award in the retail building-supply industry based on 2001 firm performance?

The DuPont analysis conducted below indicates the return sources for both Home Depot and Lowe’s. The analysis also indicates various differences in the performance between the two companies.

DuPont analysis for Lowe’s
ROE13.7%15.4%14.3%14.7%15.3% 
NP Margin4%4%4%4%5% 
TATO1.941.931.761.651.61 
FLM2.012.021.922.072.06 
DuPont analysis for Home Depot
ROE16.3%18.5%18.8%17.2%16.8%
NP Margin4.8%5.3%6.0%5.6%5.7%
TATO2.152.242.252.142.03
FLM1.581.541.381.431.46

Beta is a financial ratio that measures the level of risk the company has in relation to the market (Bodie, Kane, & Marcus, 2013, pp. 171 – 172). The reason behind the firms’ similar level of risk exposure as indicated by the same measure of beta is due to the fact that both Lowe’s and Home Depot operate in the same segment of the same industry.

As such, they are exposed to the same market forces which direct the same level of market risk in the way of the retail stores in the building-supply industry. In addition, the WACC is different for the firms because they have different levels of leverage, with Lowe’s being higher as shown by the higher FLM ratio as indicated in the analysis above…..

Company Performance Analysis

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Cost Summary and Related Journal Entries: Business

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Cost summary
Cost summary

Cost Summary and Related Journal Entries: Business

Prepare a standard cost summary using a provided template, and then write a 1–2-page analysis of variances in a standard cost summary and how the variances could be corrected.

By successfully completing this assessment, you will demonstrate your proficiency in the following course competencies and assessment criteria:

  • Competency 1: Operate product-based cost accounting systems.
    • Apply procedures for recording standard costs to account for departmental factory costs.
    • Prepare journal entries related to standard costs.
  • Competency 4: Apply cost analysis to assist management decision making.
    • Analyze favorable and unfavorable variances for management decision making.
    • Analyze how variances can be corrected.

Cost Summary

Context

All production costs, other than direct materials and direct labor, are lumped together into one category, termed overhead. In a manufacturing company, overhead is also known as factory burden, or manufacturing overhead. This cost category contains a wide variety of cost items. Many inputs, other than direct materials and direct labor, are needed to produce a finished product. Examples include:

  • Depreciation on buildings and equipment.
  • Maintenance.
  • Supplies.
  • Supervision.
  • Materials handling.
  • Power.
  • Landscaping of factory grounds.
  • Property taxes.
  • Plant security.

There are a number of procedures associated with the handling of overhead costs. They include:

  • Identification of each overhead cost’s behavior.
  • Determination of the budget for overhead costs.
  • Recording and tracking actual overhead costs.
  • Application of overhead estimates to actual production levels.
  • Analyzing budgeted and actual overhead costs for cost control.

Cost Summary

Questions to Consider

To deepen your understanding, you are encouraged to consider the questions below and discuss them with a fellow learner, a work associate, an interested friend, or a member of the business community.

  • What is the difference between the standard cost and the actual cost of production?
  • Is it possible that a variance of one type might be partly or fully offset by another variance? Explain.

Resources

The following resources are required to complete the assessment.

  • Wild, J. J., Shaw, K. W., & Chiappetta, B. (2011). Financial and managerial accounting: Information for decisions (4th ed.). New York, NY: McGraw-Hill.

Assessment Instructions

For this assessment, complete the following two parts:

Part 1: Use the Assessment 4 Template (linked in the Resources) to prepare a standard cost summary and related journal entries, based on a scenario provided in the template.

Part 2: Read each statement below (a through h). Then, write a 1–2-page analysis identifying what might cause these variances in a standard cost summary for materials, labor, and factory overhead. In addition, analyze, from a manager’s perspective, how each variance could be corrected and explain why.

Cost Summary

  1. An unfavorable materials price variance.
  2. A favorable materials price variance.
  3. An unfavorable materials quantity variance.
  4. A favorable materials quantity variance.
  5. An unfavorable labor rate variance.
  6. A favorable labor rate variance.
  7. An unfavorable labor efficiency variance.
  8. A favorable labor efficiency variance.

Write your analysis in Microsoft Word. Use 12-point font, and double space. Follow APA style for citations and references.

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Competing Values Framework Video

Competing Values Framework Video
Competing Values Framework Video

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Competing Values Framework video

Order Instructions:

Watch the Competing Values Framework video

DeGraf, J. (January 29, 2012). Competing values framework introduction. Available at:

https://www.youtube.com/watch?v=45veR-Se-rI (about 8 mins long)

Identify what quadrant you think you are (be honest), then identify your balancing quadrant. Describe how you contribute (as this quadrant) to the healthcare setting you are currently employed in or your future healthcare setting once you complete school. Reflect on how your quadrant and its balancing quadrant contribute to the framework as a whole.

Consider the health system problems and reforms about which you have been reading. Can some organizational cultures respond to some of the problems better than others? What about the reforms?

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Organization for Economic Cooperation and Development (OECD)

Organization for Economic Cooperation and Development (OECD)
Organization for Economic Cooperation and Development (OECD)

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Organization for Economic Cooperation and Development (OECD)

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Describe the organization. Discuss what kind of organization it is. If it is an NGO, what generation is it? If it is a TNC, what kind of business does it do? If it does not fit either NGO or TNC categories, comment on why not. What is the normative underpinning of this organization (i.e., under what ethical orientation(s) does it operate)?

Organization: Organization for Economic Cooperation and Development (OECD)

The Organisation for Economic Co-operation and Development is an intergovernmental economic organisation with 38 member countries, founded in 1961 to stimulate economic progress and world trade.

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