goal CORPORATION analysis
The purpose of this note is to evaluate the performance of the last goal and compare five proposed capital budget projects target.
first SuperTarget store opened in Omaha, Nebraska in 1995. differentiated itself from Wal-Mart and Target by focusing on the shopping experience of its customers. The company has largely succeeded in enhancing its brand awareness with a big advertising campaigns and further enhance the customer experience for shopping, and offered to target credit for qualified customers through red cards have.
first goal in the performance rating assessment
Wal-Mart's revenue = $ 315700000000 Wal-Mart debt rating = AA Wal-Mart beta = 0.80
Costco revenue = $ 52.9 billion Costco rating religion = and Costco beta = 0.85
target revenue 52.6 billion = $ target debt rating = A + goal win = 1.05
table 1: sale company retail financial information
table shows 1 that the total target revenues are the lowest compared with Wal-Mart and Costco, but a better performance with respect to the company's debt management. The aim of the debt rating A + outperforms Wal-Mart or Costco to classify the debt. This indicates that the target has a debt management system is very effective in her company, despite the fact that they need to get more funds for the implementation of the capital budget projects and the risk of them defaulting on their loans to pay is very low. However, it seems that the target of the most serious company with a beta of 1.05, the highest of the two other companies ratio. I think that the goal beta of 1.05 is not too big an issue as total beta for the retail sector is 1.96 and beta goal is still far less than the industry as a whole house.
second. Financial target ratios assessment
Net Profit Margin (05) = 6.89% (06) = 4.58%
return on assets (ROA) (05) = 5.84% (06) = 6.88%
Back on equity (ROE) (05) = 24.55% (06) = 16.95%
ratio of turnover of assets (05) = 1.44 (06) = 1.50
ratio inventory turnover (05) = 5.84 (06) = 5.98
table 2 financial indicators targeted for
table 2 shows that the net target profit margin has declined since dropped 05. return on shareholders' equity also since 05, but increased return on assets since decreased net margin of 05 profit goal since 05, it's down interest expenses in 06. the goal has seen growth in sales and a decrease in benefits from 05 to 06, which is a good sign for the company expenses despite the fact that this led to a decline in the net profit margin. This decrease also resulted in net income to decline in return on equity. Low return on equity is not a bad sign for the goal of equity and total shareholders' rights in fact increase 05-06, which also caused a decline in return on equity. Improving return on assets 05-06 which indicates that the management is good in the targeted asset management to generate profits.
asset turnover ratio and inventory turnover rate has improved since 05, indicating that the goal is to become more efficient in asset and inventory management. Turnover ratios are very important in the retail industry to ensure that the company will be able to keep their costs low and highly lucrative. Improvement in inventory turnover rate for the goal of demonstrating that the objective is able to reduce storage costs and inventory in 06 through effective inventory management. It also led to an increase in the sales target in 06.
III. Capital budget projects compared to
a gopher place
the total population in the region where it is located is one of the lowest among others. There is a possibility of cannibalism in this area if the target undertake this project as there is a high density of Target stores already in the field. In addition, Wal-Mart also plans to add two new supercenters there. The competition in this area to be very high with such a low population and many stores. This project may not be able to generate a large number of sales or profits to the goal despite the enormous and the average high-income population increase.
B. Allen Court
has the highest net present value due to its location in the most populous region. It will also bring brand awareness that the goal has always sought to Otkadim free publicity for all passers-by. However, the initial investment required for this huge project and raises concerns on the target on its funding capacity. Risks associated with this project is very high as a slight reduction in the amount of sales will lead to a negative net present value and huge losses for the company. This project may not be able to generate high amount of sales or profits to the goal of which is expected to remain constant with low population increase sales.
C. Barn
and requires less investment produces a net present value very favorable. This small rural area to enable the target to expand their businesses into a new market. However, it is located in the region with the second-lowest total population. The average income of the population is also very low. Goal can make huge profits in this area as it required only a small amount of sales to make huge returns, and the goal will not face losses when sales drop. This project will generate a large amount of the profit target despite the possibility that the amount of sales may be one of the lowest compared with other projects.
D. Goldie Square in
has the lowest net present value of all the other projects do not look attractive from the standpoint of the net present value . However, it is located in a densely populated who have a high average income. Populous middle-income high may lead to the target gain many loyal customers. There is also a high population growth rate which indicates that sales will increase in the future. This project can generate a high amount of sales and profits from the target as growth is achieved.
E. Stadium Remodel
It is located in with the highest average income and the highest percentage of adults with 4+ years of college area. Sales potential looks promising. However, there is not enough information to support that sales had dropped earlier. Outlook does not look very promising for this project. It's not a profitable venture to undergo for in this moment.
fourth. Conclusions and Recommendations
Based on my assessment of the goal, and saw an overall improvement in the performance of the target. I think that the goal will be able to earn huge profits and sales through its insistence on the careful analysis of future projects and projects barn marketing strategy Goldie Square in the two types of projects that I would recommend because this is the most profitable among other projects.
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