Walker and Company Essay

3040 Words Mar 24th, 2013 13 Pages
Instructions Required: Question #1What emphasis should Walker & Co. place on the children’s book line over the long term and why? | Question #2Assume that Ramsay is committed to publishing 9 new titles in the picture format, but the target number of titles for each of the other four formats (within the children’s book line) must still be set. What targets should be set for new titles for each of the remaining formats within the children’s book line in 1998 and why? | Question #3Complete Ramsay Walker’s profit plan for the children’s book line (Income Statement section of Exhibit 5 only). What are your working assumptions (limit to 3)? Which of these assumptions are critical to your analysis? Use the …show more content…
What we need is a single variable that would link that data together. I am considering using Return-on-Assets as our primary “critical performance variable.” This could act as a proxy for our return-on-investment. We would set ROA goals for the next fiscal year, 1998, at 10%. We know that large publishing companies are achieving 15% ROA. We believe that our business is at least good enough to achieve 10% ROA. In addition, I want to set free cash flow goals based on reducing working capital. After the changes Ramsey made in 1991, Walker and Company had published 100 new trade books a year in five different editorial segments: 1. Nonfiction: Walker published 20 new titles a year in hardcover and paperback covering health, baseball, history, and humor. These books were sold primarily to bookstores and required extensive publicity to pull the books out of the channel. In 1995 and 1996, Walker had enjoyed considerable success in this category with hits such as Longitude. 2. Mystery: Walker published 20-24 new titles a year in hardcover only. Traditionally, the company had been known for British mysteries, but in recent years it had moved to more “hard-boiled” American mysteries, mostly by male writers. These books were sold primarily to public libraries and a few mystery

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