Managing through information (finance exam) Essay

Managing through information (finance exam) - Essay Example However, the major point of concern is the Gearing Ratio, which has dramatically increased from 0% to 36.1446% in a year due to the long-term loan, this increases the risk of investment, and in addition the Dividend Payout Ratio has also decreased from 40% to 21.28%, which is a bad signal for the shareholders. In 2008 no interest had to be paid, but in 2009 interest also needs to be paid from the reserves, thereby reducing reinvestment into the company. Johnsons Ltd. should focus upon clearing the debt as early as possible, and clarify to the investors that it is for the betterment of the company. Furthermore, it should try to reduce the gearing ratio by increasing ordinary shares, either through new issuance or issue of bonus shares. Financial ratios aid in analyzing, controlling and improving the performance of a company, it also helps in attaining loans from banks, it can provide sufficient information to analyze the liquidity and performance of the firm, and points out the areas requiring improvement. However, ratios have certain limitations as well, for larger companies it is difficult to make comparative analysis as it becomes extremely complicated, firms set their targets at average instead of following market leaders, hampering the efficiency of the company. The major drawback of ratio analysis is that it does not account for inflation and therefore can mislead the managers. Apart from inflation, seasonal variations can create distortions in the results as well, furthermore many valuations used in the ratios such as depreciations, inventory, bad debts etc are approximates and can thus affect the end result. The user of these ratios must know how to differentiate between wrong results and should be capable of adjusting to various situations (Besley and Brigham, 2008, 68). It is obvious from the calculations that none of the three proposals is good, since they give fewer profits than the current system, Proposal A

Injectronics Essay Example | Topics and Well Written Essays - 1500 words

Injectronics - Essay Example The initials IM stand for innovative mechatronics. This was the new name that was taken up since the year 2012. The merger involved four organizations namely RAE ignition and sensors, DAT equipment, Injectronics and MAP- mechatronic auto parts. Initially, Injectronics used to remanufacture and repair automotive products for resale. They then started manufacturing of automotive equipment and also embarked on extensive testing equipment to ensure they have the widest range of products in stock ready for sale. They were the first automotive company in the southern hemisphere to be given ISO 9001 accreditation. The IM group has lived up to the same expectations regardless of the mergers and still remains the only automotive organization in the southern hemisphere that is ISO certified. The remanufacturing process follows the step of a customer trading in already used automotive equipment or perhaps even a car. This equipment will be remanufactured and then the customer will be able to pu rchase the remanufactured equipment or new equipment depending on their choice. The MAP (mechatronic auto parts) is a new and exciting brand that was recently added to the IM group; it is aimed at providing unique and high quality automotive products to the southern hemisphere. ... These key rubbers usually do not have a replacement but the MAP products effectively do the trick. These products come with a duly explained replacement user manual thereby making it easy for the user to change. RAE ignition and sensors is another branch of the IM group, which deals with ignitions and sensors. They present different ignitions for various makes of vehicles in the industry, which are ISO certified. These are also replacements for defective or faulty ignitions and sensor systems. The Injectronics branch of IM group continues the initial trade of the original Injectronics. This is the initial business of buying of used automotive parts and selling of new automotive parts. DAT equipment is yet another branch of the IM group that deals with automobile diagnostics. Such equipment includes gadgets that show faults or confirm the state of vehicle parts and their efficiency. Equipments are electronically tested, with ignition spark tester being an excellent example. This elect rically checks for the ignition sparks performance. All the above products of the IM group have played a big role in finding the break -even point for the firm thereby making it continuously viable. The emergence of the above subsidiaries led to a lot of change in the market share for the firm; this played a big role in making top-level management to change the company name from Injectronics to the name Innovative mechatronics. The name innovative mechanics well suits the organization as it only deals with a very special niche in the automotive field. Not many automotive companies are exploiting the above niche, which is well favored by the Australian population. IM group however, also exports her products to other countries. This is also another avenue of