1) In November of each year the CFO of Barker Electronics begins the financial forecasting process to determine the firm's projected needs for new financing during the coming year. Barker is a small electronics manufacturing company located in Moline, Illinois, which is best known as the home of the John Deere Company. The CFO begins the process with the most recent year's income statement, projects sales growth for the coming year, and then estimates net income and finally the additional earnings he can expect to retain and reinvest in the firm. The firm's income statement for 2007 follows
( in $000 ):
Sales $ 1,500
Cost of goods sold (1,050)
Gross Profit $ 450
Operating costs (225)
Depreciation expense (50)
Net operating profit $ 175
Interest Expense (10)
Earnings before taxes $ 165
Net Income $ 107
Dividends $ 20
Addition to retained earnings 87
The electronics business has been growing rapidly over the past 18 months as the economy recovers, and the CFO estimates that sales will expand by 20 percent in the next year. In addition, he estimates the following relationships between each of the income statement expense items and sales:
Operating expenses/sales 15%
Depreciation expense ($000) $ 50
Interest Expense ($000) $ 10
Tax rate 35%
Note that for the coming year both depreciation expense and interest expense are projected to remain the same as in 2007:
A) Estimate Barker's net income for 2008 and its addition to retained earnings under the assumption that the firm leaves its dividends paid at the 2007 level.
B) Reevaluate Barker's net income and addition to retained earnings where sales grow at 40 percent over the coming year. However, this scenario requires the addition of new plant and equipment in the amount of $100,000, which increases annual depreciation to $ 58,000 per year, and interest expense rises to $ 15,000.© BrainMass Inc. brainmass.com October 24, 2018, 10:22 pm ad1c9bdddf
For your convenience, I have attached a formatted MS Excel spreadsheet containing the text below. Examination of the cells within the spreadsheet illustrate ...
This file contains a formatted MS Excel file which provides the reader with examples on the calculation of net income and retained earnings based on various assumptions.
Question about Comparing FMC Green River and FMC Aberdeen
An organization is a consciously coordinated social unit, composed of several people whose main focus is to achieve a common goal or set of goals. A successful organization understands the cultural differences in various divisions or branches. It uses culture and group dynamics to overcome management challenges, implement strategic initiatives, and develop business opportunities. Organizations with an exceptional "company" culture are usually run by leaders who understand and practice effective cultural leadership principles. A culture or sub-culture that works effectively in one part of an organization may not work well in another. Those who have made it to the top have done so by building a high performance workplace around the corporate culture.
As you prepare for each assignment your focus should be on developing a basic understanding of leadership, motivation, job satisfaction, etc., and how the corporate culture is what makes something work in one part of an organization, but not another.
Using the appropriate organizational analysis format begin your analysis by focusing on the following areas of interest. During the next five weeks, you will be using this format, and the step-by-step process to look at various areas of interest, culminating in the preparation of a formal proposal for the Plant Manager. So, it is important that you use a consistent format to take "notes" along the way (which will be submitted to your instructor). Start now by developing a paper (your "notes") which addresses:
The Management of Ability
While engaging the step-by-step analytical process keep in mind the differences that exist between FMC Green River and FMC Aberdeen. For example, think about the management of ability. State the what the corporate culture and work environment is like at Aberdeen, then at Green River. How does each operation make the best use of its employees' skill sets? Based on the corporate culture, identify an alternate method for them to leverage their employees abilities. Will the methodology you select for Aberdeen work at Green River? How will you implement your recommendation at each facility? Include your thoughts on these issues with your notes; you can either incorporate them into the "areas of interest" or add them as side notes.
Can you provide with an example to use to build my assignment? Any help will be much appreciated. Provide references for external sources. Thank you.View Full Posting Details