Denver Furniture Corporation Case Summary
Following data is given from the proposals and on the current state of the company. The data given of the proposal with the effect cannibalization represents a sort-of worst-case scenario.
With the above data, we can calculate the return on assets ratio, the asset turnover ratio, and the profit margin. The return on assets ratio presents a picture of the profitability of the company by giving the number of dollars made in …show more content…
If the factory has excess capacity for the company's sales volume, they could increase their efficiency by selling their capital, which also gives a momentary cash boost. This option is far less risky. Another option is to use their excess capacity to start building completely new products which are complementary to their furniture products in order to increase sales. For example, Apple sold more computers with the launch of iPod because the existence of the iPod increased the value of an Apple computer. DFC could sell things, pillows or throws for example, which go together with their existing products to increase their