Part A
Technical Analysis
1.SWOT Analysis
Strengths:
Merbatty has a strong, well-recognised brand name, and good reputation, which gives clients confidence in their products. The company has been around for many years, and has shown rapid growth in profitability in recent years, which suggests good management. A wide range of boats, and optional extras, attract a wider client base. The company has sales agents worldwide who are well incentivised to maintain a close relationship with the clients. Chairman, Alberto Blanc, is very knowledgeable in his field due to a lot of experience and is well-known in the industry. Merbatty has well-equipped production facilities, in two countries, which operate at nearly 100% capacity. There are skilled …show more content…
Operating Profit Margin = Operating Profit /Sales
2012 : 76/502*100 = 15.1%
2011 : 65/445*100 =14.6%
A fairly good increase in operating profit margin could be the result of the newly implemented IT system.
Net profit margin = Profit for the year – Preference share dividend /Sales
2012 : 40/502*100 = 7.97%
2011 : 31/445*100 = 6.97%
An increase of 1% which is a good improvement.
Earnings per share = Profit for the year – Preference share dividend / Number of ordinary shares issued
2012 : 40/180 = 0.22
2011 : 31/60 = 0.52
A decrease in earnings per share as more shares were issued in 2012.
Return on Total Assets = Profit for the year – Preference share dividend /Total Assets
2012 : 40/964*100 = 4.15%
2011 : 31/571*100 = 5.42%
The company's earnings in proportion to its assets have decreased by over 1% in 2012. The greater the coefficient from this calculation, the more effectively the company is using its assets to generate profits.
.
Return on common equity = Profit for the year – Preference share dividend /Total Equity – Preference share capital
2012 : 40/(621-90)*100 = 7.53%
2011 : 31/(185-30)*100 = …show more content…
Business issues affect revenue, cost and profit directly and there is a link between it and the financial performance of a business. It is important to be aware of these problems so that they do not affect the business in any way or the least way possible.
An ethical issue is a problem which arises dealing with principles of morality i.e what is right (acceptable) and what is wrong(unacceptable) with regards to conduct. Ethical dilemma is not one that is governed by tight legislation. Ethical behaviour may enhance your reputation or improve your sales. Businesses should behave ethically regardless of business consequences.
This case included a few ethical issues such as: Merbattys ethical position on greenhouse gases and emissions and sources of renewable materials Potential faults that appear on software test program which Alain Miina( Technical Director) is ignoring. Alberto Blancs (Chairman) has promised to give Jesper which is his son a “loyalty bonus” of €3 million to stop him from selling his shares CCL. Termination of a sponsorship which would have cut costs. Merbatty has not given clients the option to have new navigation software on
Technical Analysis
1.SWOT Analysis
Strengths:
Merbatty has a strong, well-recognised brand name, and good reputation, which gives clients confidence in their products. The company has been around for many years, and has shown rapid growth in profitability in recent years, which suggests good management. A wide range of boats, and optional extras, attract a wider client base. The company has sales agents worldwide who are well incentivised to maintain a close relationship with the clients. Chairman, Alberto Blanc, is very knowledgeable in his field due to a lot of experience and is well-known in the industry. Merbatty has well-equipped production facilities, in two countries, which operate at nearly 100% capacity. There are skilled …show more content…
Operating Profit Margin = Operating Profit /Sales
2012 : 76/502*100 = 15.1%
2011 : 65/445*100 =14.6%
A fairly good increase in operating profit margin could be the result of the newly implemented IT system.
Net profit margin = Profit for the year – Preference share dividend /Sales
2012 : 40/502*100 = 7.97%
2011 : 31/445*100 = 6.97%
An increase of 1% which is a good improvement.
Earnings per share = Profit for the year – Preference share dividend / Number of ordinary shares issued
2012 : 40/180 = 0.22
2011 : 31/60 = 0.52
A decrease in earnings per share as more shares were issued in 2012.
Return on Total Assets = Profit for the year – Preference share dividend /Total Assets
2012 : 40/964*100 = 4.15%
2011 : 31/571*100 = 5.42%
The company's earnings in proportion to its assets have decreased by over 1% in 2012. The greater the coefficient from this calculation, the more effectively the company is using its assets to generate profits.
.
Return on common equity = Profit for the year – Preference share dividend /Total Equity – Preference share capital
2012 : 40/(621-90)*100 = 7.53%
2011 : 31/(185-30)*100 = …show more content…
Business issues affect revenue, cost and profit directly and there is a link between it and the financial performance of a business. It is important to be aware of these problems so that they do not affect the business in any way or the least way possible.
An ethical issue is a problem which arises dealing with principles of morality i.e what is right (acceptable) and what is wrong(unacceptable) with regards to conduct. Ethical dilemma is not one that is governed by tight legislation. Ethical behaviour may enhance your reputation or improve your sales. Businesses should behave ethically regardless of business consequences.
This case included a few ethical issues such as: Merbattys ethical position on greenhouse gases and emissions and sources of renewable materials Potential faults that appear on software test program which Alain Miina( Technical Director) is ignoring. Alberto Blancs (Chairman) has promised to give Jesper which is his son a “loyalty bonus” of €3 million to stop him from selling his shares CCL. Termination of a sponsorship which would have cut costs. Merbatty has not given clients the option to have new navigation software on