Notes


  • Home Area eats first-inventory is transferred to other areas from the home area 
  • Low Cost: Unit cost, market share measured by revenues, 
  • high cost: net income 
  • financial leverage: debt financing 
  • lower ownership equity the higher: financial leverage 
  • don't just borrow money and put it in your cash account; must do something productive with the funds e.g. build ne plant; 
  • basic financial statments 
  • income statment 
  • cash flow statment 
  • balance sheet 
  • pandau uses rupees 6 rupees to 1 dollar; exchange rate can change 
  • net sales to affiliate +20% line sales of inventory 
  • good available for sale 
  • consolidated sales numbers: sales to affiliates are not in it 
  • only care about the outside transactions: consolidated financial statments 
  • consolidated cost of goods sold: ignore affiliates 
  • intra company sales- home area sales total 
  • depreciation is measured through the straight line method 
  • build 
  • plant: add production lines 
  • equiptment depreciates 
  • operating leverage: high fixed cost , low operating cost 
  • low fixed costs then it will be high operating costs 
  • ramp up production must pay overtime 
  • pandao double time for overtime rate: there is no night shift 
  • off you add lines you have to make an addition to the plant 
  • lines " hours" " weeks" " units per hour " 
  • reduce labor costs through training 
  • game likes consistency 
  • don't change so much and bounce around 
  • depreciation has no effect on cash outflow 
  • quarter 4 is the highest sales
  • goals: a desired future state that a company attempts to realize 
  • should be : 
  • percise 
  • competative advantage 
  • porters 5 forces 
  • purpose: understand why some industries have higher profit margins and what factors can change long-run industry profitability 
  • risk of new entry 
  • rivalry among established firms
  • bargaining power of buyers 
  • barganing power of suppliers 
  • threat of substitute products from other industries 
  • company situation analysis: 
  • internal: strengths and weaknesses 
  • external: opportunitiws and threats 
  • shift from analysis to synthesis- what does it all mean 
  • levels of strategy 
    • corporate level- business level-functional level \
    • - retrenchment- combination 
    • Corporate Strategy: stability-expansion
    • Vertical integration- making all your own products by buying out other companies. That are related i.e. cars and tires 
  • function of corporate culture 
    • conveys a sense of identity 
    • generates employee commitment 
    • Adds to original stability 

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