Hansson Private Label Essay

2640 Words Feb 10th, 2014 11 Pages
CRAM Exclusive
Essay Sample: Page 2
EBIT = Revenue – COGS – SGA

OCF = EBIT – Taxes + Depreciation

Second, we calculate the changes in working capital using the DSO, DSI and DPO ratios provided in the request form.

Capital Expenditure = Change in Net Working Capital

Net Working Capital = Current Asset – Current Liabilities

= A/R + Inventory – A/P

A/R = DSO * (Revenue / Number of days in Period)

Inventory = DSI * (COGS / Number of days in Period)

A/P = DPO * (COGS/ Number of Days in Period)

Afterwards we have all calculation available to estimate the Free Cash Flow (FCF), calculated as following

FCF = OCF – Capital expenditure

Referring to Exhibit 5, Executive VP of Manufacturing Robert Gates based his capital request form on a ten-year deal to estimate the project’s FCFs. However, from the information provided in the case we know that “the customer would commit to only a three-year contract”. Robert Gates financial assumptions expect capacity utilization to be increasing during the course of the project, but don’t take into account the operational risks that might occur from a changing “relationship with the customer” or a disappearing “demand (…) at the end of the initial three-year contract”.

Consequently, this would decrease revenue and reduce the FCF. Also, the risk measurement for a ten-year estimation shouldn’t be neglected. First, “making this (…) investment and incurring the associated debt (…) increases HPL’s (…) risk of financial distress should
CRAM Exclusive
Stick92091Orange

Related Documents

  • Hansson Private Label Essays

    Hansson Private Label | ACF - I | 1. How would you describe HPL and its position within the private label personal care industry? HPL manufactures personal care products that are sold under the band label by other companies. The company has stable whole sales growth rate and has become successful by efficient manufacturing, good expense management and appropriate customer service. In the recent years, the company has been facing a great amount of competition in the private label industry

    Words: 804 - Pages: 4
  • Essay about Hansson Private Label

    Case Study: Expansion and Risk at Hansson Private Label, Inc.: Evaluating Investment in the Goliath Facility Final Project by Rodrigo Montechiari Company´s Business Operations, Strategy and Past Performance HPL is a manufacturer of personal care products for retail partners. Its strategy has always been to focus on efficiency, cost control and customer relation to guarantee solid revenue grows until 2007. Expansions have always been carefully analyzed and the Company never worked below 60% capacity

    Words: 1338 - Pages: 6
  • Genetically Modified Foods: To Label or Not To Label? Essay example

    genes that cannot occur in nature or in traditional crossbreeding.” (Non-GMO Project). This type of genetic modification has started to worry people. Companies are currently not required to label their products to inform customers that their product contains GMOs, and only a few of the many companies voluntarily label their products as GMO-free. Many such as, Journalist for the Santa Fe New Mexican, Jessica Emerson, feel like it is our right to know what companies are putting in the foods we are buying

    Words: 1344 - Pages: 6
  • Essay on The Definition of Private

    The Definition of Private Anyone who has ever received one of those pesky telemarketer phone calls during dinner most likely understands the idea of a private phone number. No one likes to have their phone line invaded by paid phone operators who just want your money. Working long and hard on a group presentation regarding technology threatening/improving privacy, one can realize that the word private has several different connotations and meanings. Yet, when generally facing the word, it usually

    Words: 535 - Pages: 3
  • Multi-Protocol Label Switching - MPLS Essay

    Multi-Protocol Label Switching - MPLS Multi-Protocol Label Switching, more commonly referred to as MPLS, was defined in the late 1990sas a traffic engineering mechanism to replace IP over ATM in Internet backbones. In the mid-90s efforts were made to combine IP and ATM technologies, the first one being IP switching developed by Ipsilon, competition came very quickly

    Words: 2383 - Pages: 10
  • Starting an Independent Record Label Essay

    Starting an Independent Record Label Introduction Throughout these four chapters I will be discussing how to start your own record label. Part one will be talking about how to get started, like what a record company does. Part two will be talking about setting up the actual label, like record deals, contracts that you will need, and making your business plan. Part 3 will be discussing how to find the group you will represent, like what to look for in an artist, what is the artist looking

    Words: 2974 - Pages: 12
  • Essay on Misleading Food Labels

    industries. However, it is hard to know what exactly you are consuming if food industries provide false nutrition content and mislead consumers by placing false advertisements on the packaging. When a company produces a product that contains misleading label, consumers are not receiving complete information about the food they are eating which could lead to health issues including allergies and problems with diabetes. At this point, the FDA (Food and Drug Administration) has started increasing regulations

    Words: 1763 - Pages: 8
  • Eradication of Race Labels Essays

    Race labels have been present in society, not only in the United States, but all around the world, for hundreds of years. However, the concept of race has not always existed. In ancient times, while people were often divided by characteristics such as class, religion, and others, they were never divided by the color of their skin. “Race” in the context of classifying humans was not even used in the English language until it was used in 1508 in a poem by William Dunbar (California Newsreel, 2003)

    Words: 991 - Pages: 4
  • The Private Choice Essays

    The Private Choice Think of all the notable people you may consider as highly educated. If you look deep enough, chances are you can find out about their education, which is often private. Why do some people prefer a private education? What even classifies as a private school? One definition given by the Encyclopedia of American Education is “in modern American education, any school not operated or directly funded by a governmental agency” (793); these include religious, non-sectarian

    Words: 1560 - Pages: 7
  • Public vs Private Funding Private Stadiums Essay examples

    billion, but in some instances the sums have far surpassed that amount ( Preuss, 2004). China reportedly incurred costs in excess of $58 billion to host the event in 2008 (Upegui, 2008). Such sums of direct public investment to build infrastructure for private businesses or events are generally rare in other sectors of the economy. For this level of public investment, it is reasonable to ask the extent to which professional sports serve to promote local economic development. Who Gains Benefits from Funding

    Words: 1126 - Pages: 5