PRIMO BENZINA
Introduction:
In year 2006 the company named Primo Benzina started operations with its two outlets located in Stuttgart in Germany and two outlets in Basel Switzerland. The company was started as a retail chain of petrol stations with differentiation in product line with its competitors. The company was offering petrol, snacks, restaurant meals, and high-quality service in central Europe. It grew swiftly from 4 outlets and sales of 2.4 million Euros in 2006 to 24 outlets and sales of 38.1 million Euros in 2009.
However the company was growing but it was accompanied by declining profitability and a significant increase in receivables, inventories, and capital investments in new retail outlets. The cash outflows were financed by short-term loans from Dresdner Bank and by slowing payments to trade creditors. Dresdner Bank reluctantly increased the maximum amount available to the company under its term loan to 12 million Euros from 10 million euro’s. In early 2010, Otto Schroder, Chief Executive Officer, and Annegret Heuermann, the company's Chief Financial Officer, completed a review of the company's financial situation. The company's executives were unsure whether the new credit limit would permit the company to implement its growth strategy, since the company now had a limited amount of cash available to finance additional outlays for working capital and capital expenditures.
From this case study the analyses are made on the following questions asked. The Questions that are asked are following:
• Describe the key elements of Primo Benzina’s business strategy and performance from 2006-2009, with reference to the financial statement provided. Also include financial analysis and industry/competitors comparisons. Dis...
... middle of paper ...
..., the company is either generating insufficient margin to cover the high-service level or it is unable to deliver them at an acceptable cost.
A benchmarking analysis against competitors is provided in excel. These data indicate that Primo was performing poorly against its three competitors in terms of day’s receivable and day’s inventory. The fact that day’s payable was 40 days versus 30 days for the credit terms offered by its suppliers, and much higher than for its competitors, helps explain much of the reason for complaints from the company’s suppliers about late payments. In the future, Primo might have limited access to supplier credit, and suppliers might ultimately refuse to sell to the company unless payment is made up front in cash. The data also indicate that the company was performing poorly against its competitors in every profitability metric displayed.
By lowering selling prices across the board, Opossumtown, Inc. reduced its inventory turnover ratio, cutting the number of days to sell inventory from 174 days to 104 days; that is a 40% improvement. Opossumtown, Inc. also cut the number of days it takes to collect its credit accounts from 68 to 44 days, again that is 35% better than the previous year. The company is able to do this while cutting its debt ratio by 10% and increasing its current ratio by 25%, making it appear more favorable in terms of liquidity. As promising as this may look, this is not the whole picture. Opossumtown, Inc. shows an 11% decline in gross profit as well as operating income ratios, and a 3% decrease on the profit margin ratio. The decline of these ratios is a result of the company’s new strategy of decreasing the selling price and increasing its marketing and selling expenses. Opossumtown, Inc. made some noteworthy advancements with the implementation of its new plan for 2014. However, based on the assessment of the balance sheet, income statement and the ratios, the corporation did not achieve its goal to increase operating income by 6% and net income by 4%. Opossumtown, Inc. was only able to grow its operating income by a little more than half of one percent and net income by
This decrease may be an indication that the company’s credit policies have become more lenient and could, in turn, increase the likelihood of not collecting receivables. While the 2015 turnover is not as efficient as 2013, the change is small and there is no need for concern at this time. The accounts receivable should be reviewed in more detail to determine if longer terms have been extended to key customers, or if there are accounts with deteriorating credit
The research questions being proposed in this paper include but are not limited the following
...o renegotiate credit agreements with banks. However, the liquidity was a result of structural changes and would not bring significant effect to the company because it is unusual and infrequent (the extraordinary credits of $15 million fall in this category also). The financial report must be consistent year-by-year. A company should do the same or similar activities, especially operating activities, to generate “money” every year and recognize “money” as its profit. However, this is not the case for Harnischfeger. We are doubtful that the company will perform well in the future. The company recorded modest profit this year because it reduced operating cost not because it increased operating revenue. Since Harnischfeger did not generate its profit by operating activity, it would be too risky to predict if its stock price will reach $6.00 per share in the 1986-87.
Provided an overview of the research study of the past seasons, respectively, as well as the current literature and relevant research methodology was adopted to review the title search has focused on clarifying concepts through. Gather Success in the chapter analysis of the data that the overwhelming conclusion that emerged from the main purpose of the presentation and analysis of data collected from the device. Analytical method to analyze the data is also used in the data analysis chapter. Enveloped before choosing your explanation why the data between the various other analytical methods in the application of qualitative research methodology to explain. Finally, research in the organizational structure according to the system, it is necessary again to provide a means through which chapter of the researchers collected their data sampling and data collection methodology used to explain each specific use. Data collection is the tool of the success and results-oriented research. It has a great role in understanding of the research. The data has been compromised, leading to disaster and failure based on findings, researchers emphasized that the real health and all research data collection operations. Data analyses have a significant role in understanding the object of the research. Data analyses are the tool for the accurate measurement of judging the research methodology and the effects of that methodology. Data analysis is the key to the findings of the research. In fact; no company can survive without the available data analysis. Consider the following examples as follows:
This report comprises of the explanation of two different companies working in different market fields, the two companies I’ve chosen are Primark and Samsung I am going to write about the influence of the 4vs which are the volume of output, variation in demand for output, visibility of production, and variety of output. I am also going to look at the performance objectives in each of the companies. Example, for a given year and how they are able to reach their objectives, and also the effect on the cost efficiency of the operations.
Each division’s performance had been judged on the basis of its profit and return on investment for several years. The said practice creates competition among the company’s divisions because each makes sure that it is more profitable than the others. As such was the case, there was high possibility that one division was enjoying profit at the expense of the other(s).
· There is the possibility of the supplier integrating forwards in order to obtain higher prices and margins. This threat is especially high when
Happy Chips, Inc. is faced with a serious problem, with only having one mass merchandise customer called “Buy 4 Less” being unhappy with the company’s operating performance. Buy 4 Less had several problems cited including frequent stock outs, poor customer service responsiveness, and high prices for the products being supplied. Buy 4 Less came up with solutions they think seem fit to fix the problems they found with Happy Chips, Inc. and if Happy Chips, Inc. wishes to remain a supplier to their company they will have to incorporate these changes. The problem however with this scenario, is that employees of Happy Chip, Inc. are not happy with the demands Buy 4 Less has bestowed upon them which include providing direct store delivery four times a week instead of three, installing an automated order inquiry system to increase customer service responsiveness, and decreasing product prices by 5%. Even though the easiest thing for Happy Chips, Inc. to do is to agree to the changes Buy 4 Less wants them to do, Wendell Worthmann, the manager of logistics cost analysis doesn’t agree to the changes right away. The main problem with this case is that Buy 4 Less is Happy Chips, Inc. one and only mass merchandise customer that accounts for 400,000 annual unit sales and 12% of annual revenue. With the mass merchandise segment having such a high profit potential, Happy Chips, Inc.
There is an enormous prospect for the Pkolino Company to start a business. The current task has adequate resources and a great plan to keep it operational. Nevertheless, dangers that might plunge Pkolino Company into financial disaster are also present. This is due to the fact that there are always a couple of things that tend to advance in an unanticipated direction even in a well- planned plan. For instance, P’kolino Company’s financial statements do not have provisions for the worst, average, and best scenarios.
Evaluating a company’s financial condition can be done by looking at its profitability or its ability to satisfy long-term commitments. These measures can be viewed through an analysis of a company’s financial statements, including the balance sheet and income statement. This paper will look at the status of Scholastic Company’s (Scholastic) ability to satisfy its long-term commitments and at the profitability of Daktronics, Inc. (Daktronics). This paper will include various financial ratio calculations and an analysis of the notable trends. It will also discuss the profitability and long-term borrowing positions of the firms discussed.
The receivables turnover is based on the assumption that all sales are credit sales. The values of receivables turnover for 2004 and 2005 are 10.21 times and 8.83 times, respectively. This means that IQ’s efficiency is considerably declining in terms of cash collection. The decrease in receivables turnover is explained by the higher increase in average net receivables (71%) than the increase in net credit sales (25%).
...ther or mechanical or even customs delay. Customers were upset of these issues when they were expected to have on-time delivery of their shipments.
Toyota Motor Corporation is one of the largest automakers in the world. At its annual conference in Tokyo on May 8, 2008, the company announced that activities through March 2008 generated a sales figure of $252.7 billion, a new record for the company. However, the company is lowering expectations for the coming year due to a stronger yen, a slowing American economy, and the rising cost of raw materials (Rowley, 2008). If Toyota is to continue increasing its revenue, it must examine its business practice and determine on a course of action to maximize its profit.
Through Dupont analysis, we have been able to see the specific strengths and weaknesses of BMW and Audi’s management. BMW’s lower profit margin and asset turnover indicate less efficient cost management and asset management. Their debt multiplier indicates that they’re taking advantage of debt, but the benefit of this isn’t realized because of their problems with cost and asset management. Due to Audi’s more efficient use of their assets, and better cost efficiency, it can be said that their management has performed better than BMW’s over the past year.