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Research on a U.S.-based multinational corporation: Northrop-Grumman

1. Briefly describe Northrop-Grumman (in one (1) short paragraph).

2. Determine whose rate of return (i.e., local or parent currency returns) the company you researched should use when evaluating foreign direct investment opportunities and justify the position.

3. Determine the role that accountants play in the managerial planning processor the company you researched and how their advice is likely being used.

4. Make one solid recommendation for how the company you researched can minimize its foreign exchange exposure. Explain the rationale behind your recommendation.

5. Determine if the company you researched would benefit more from a financial futures contract or a forward exchange contract. Explain your rationale.

6.Include three (3) external peer-reviewed sources to support your position

Your assignment must follow these formatting requirements:

Be typed, double spaced, using Times New Roman font (size 12), with one-inch margins on all
sides; references must follow APA or school-specific format. Check with your professor for any
additional instructions.

Solution Preview

I did Northrop-Grumman, the defence contractor. I used their annual report as well as several relevant academic sources. Please find the solution to your question in the attached document.

I guess you know our rules about papers. What I do is give a detailed outline that you can use (all or part). It's just a matter of filling in the blanks.

I am using Northrop-Grumman as an example. For most of these questions , the annual report(s) should do fine.

Briefly describe the corporation you researched (in one (1) short paragraph).

Northrop-Grumman is a high-tech military supplier to the US government. US government sales come to about $25 billion or 92% of sales, and this includes products that are later sold or granted to foreign states. Direct foreign sales is about $1.6 billion. Long term debt looks to be about $4.5 billion (fair value) as of the very end of 2012. Total assets sit at about $26 billion, while costs are around $333 million, with depreciation at about $500 million. These figures have gone down over the last three years. About $1 billion is still due from federal contracts.

NG is almost always in some legal trouble. Especially between 1995-2003, NG was paying a small fortune in fines and legal settlements. Issues include violation of safety standards, environmental pollution, falsified inspection data, and, when NG was hired by the state of Virginia to take care of its computer security, the firm was sued for just about every possible cost overrun and estimate fraud crime possible. No settlement was reached because the Virginia state legislature discovered that state officials colluded with NG in their incompetence.

Determine whose rate of return (i.e., local or parent currency returns) the company you
researched should use when evaluating foreign direct investment opportunities and justify the position.

NG's dominant position forces other states to hold dollars. Since most of NG's foreign work is done via the US government ...

Solution Summary

The solution discusses research on a U.S. based multinational corporation. The role that accountants play in the managerial planning processors that company is researched.

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