Strong Tie free essay sample

Tie Ltd. a family-owned manufacturing tool producer has managed to maintain stable sales numbers throughout recent years even while the Housing market as a whole was on a negative trend. While this should translate into higher profit margins, the exact opposite trend has occurred. The solution to Strong Tie’s financial problems is an increase in prices of goods and salary cuts. Beginning in 2006 where Strong Tie has Sales of 16. 2 million, the company maintained healthy sales between the 16 and 17. 5 million. However Operating Income decreased by 29% and then another 75% the following year. Two main factors led to this trend: COGS and Depreciation. After analyzing the way Strong Tie has managed their goods. Their Raw Material Turnover was close to par with benchmark numbers at 27 days which means they have been converting the raw materials into finished goods on exceptional timing. The days in Work in Progress was also progressing at a healthy rate going from 4. We will write a custom essay sample on Strong Tie or any similar topic specifically for you Do Not WasteYour Time HIRE WRITER Only 13.90 / page 5 days in 2006 to nearly 1 day in 2008. In other words, they were able to finish goods at faster rates. With these two healthy rates, there should have been increasing profits, however one variable was stopping it from happening; Days in Finished Goods. Strong Tie’s most profitable year was 2006 where days in finished goods was 45 which was close to on par with the benchmark of 51. But by 2008, Strong Tie had finished goods flying off the shelves by 26 days. If customers are buying the products this fast, the prices of these goods are way too low which has resulted in a substantial loss of profit. Therefore the first recommendation would be to increase prices substantially. Depreciation on the other hand was expected to occur but the cost nearly doubled in 2006 from 396k to 720k in 2008 most likely from a major breakdown of equipment and repair costs. Depreciation costs may also have derived from Strong Tie investing on new automated feeders and packaging equipment. So while the balance sheet shows increasing rates of depreciation and selling expenses, expect those costs to lower once again. This investment also has the potential to speed up the rate at which raw materials are converted into finished goods. With more finished goods to sell at higher prices, Operating Income will see a growing trend. Another cause of concern in Strong Tie is the extra dividends that are being paid along with the Salary bonuses. First off the 1 million dollar bonus to the three daughters equates to about 350k per daughter. That type of salary is not justifiable to three employees and is negatively affecting the retained earnings to the business. The 500k being paid every year to someone that has no relationship to the business at all is also a waste of potential gains. Two recommendations here would boost retained earnings significantly. First off the salary of the three daughters needs to be significantly lowered. It would be preferred to hire new employees to fill that position and get paid reasonable wages. Second, it would be in the company’s best interest to seek out a new shareholder for the 500k in dividends being paid every year. Current shareholder needs to be replaced with someone with vision for the company that attends the roundtable meetings and contributes their input to the overall goals of the company. One topic that has the potential to become an issue is the financing of the credit agreement with the Bank of Nova Scotia. Financing is guaranteed only if Strong Tie is able to maintain a variety of benchmarks. First a current ratio of 1.5 or higher was needed. The company started out strong in 2006 with a ratio of 5 but has declined to 3. 13 in its most recent year. This decreasing rate is not too threatening however because the use of resources will be more efficiently used with the new equipment and automatic machinery that has been purchased. The company needed to follow a Long-term debt to Total Capitalization Ratio of 40% or less and has been able to but again is getting closer to that benchmark. The reason for that was the risk that it has taken undergoing the same investment in new capital. The one area that Strong Tie is currently struggling with in the benchmarks they need to maintain is Cash Flow Coverage. They need to maintain over 1, but that number dropped to . 57 in 2008. One of the reasons why this number has dropped below the requirement is because of the increasing cost of depreciation that has been accumulating that is being paid for. Once the company raises its prices on how much they sell their goods for will the Cash Flow Coverage go back to its requirement since Depreciation costs should already be on the process of lowering with the new equipment. Strong Tie’s investment in automation currently has the company on edge at the moment with its net income, but in time that investment will pay off. While the demand for houses in the market went down significantly during this period (2006-2008), Strong Tie has maintained stable sales numbers partly because of how low the prices have been. While 2008 was Strong Tie’s weakest year from an income standpoint, lenders (particularly Bank of Nova Scotia) should not worry as long as Strong Tie increases the prices of goods so that the Cash Flow Coverage ratio returns to normal. While financing may appear to be in danger currently, the current capital will hold the spine together of this company until these changes are made. Finally the last major changes needed are to the salaries being paid to Johnstone’s three daughters and a potential new shareholder. Once this annual cost of 1. 5 million is eased and with increased prices to sales goods we will see Strong Tie becoming profitable again.

Insure vs. Ensure

Insure vs. Ensure Insure vs. Ensure Insure vs. Ensure By Maeve Maddox When in a recent post I used the word insure in a context that had nothing to do with underwriting, more than one reader wrote to chide me for not using the word ensure. I’ll confess. The rule that insure must be used only in the context of indemnifying against loss is one that has never penetrated to my subconscious. I’ve read the rule. I’ve even written about the rule, but I can’t seem to rid myself of the idea that ensure is British spelling for insure. The verb ensure entered the language in the Middle Ages. The earliest OED citation is 1385. The earliest documentation for insure is 1440. Until the 17th century, the forms ensure and insure were used interchangeably with a variety of meanings, including that of insuring a person’s life or property against loss. According to OED citations, ensure was still being used in the 18th century with the meaning of buying insurance: â€Å"The price of ensuring the Life of a Man of 20 (1693).† And in the late 19th century, insure was still being used in contexts in which the modern rule requires ensure: â€Å"An ardour which could hardly fail to insure success (1862).† The Penguin Writer’s Manual notes that the verb â€Å"generally used in the active form to mean â€Å"make (something) certain† is ensure,† but also notes that ensure is often spelled insure in American English. For modern writers of American English, however, both The Chicago Manual of Style and The AP Stylebook urge the distinction: Ensure is the general term meaning to make sure something will (or won’t) happen. In best usage, insure is reserved for underwriting financial risk. –CMOS Use ensure to mean guarantee. Use insure for references to insurance. –AP Use ensure when you mean guarantee. Reserve insure for talking about a financial arrangement meant to secure the payment of a sum of money in the event of loss or damage: Worn or damaged parts are replaced to ensure the safety. They go all the way to ensure the comfort and satisfaction of their passengers. How to Properly  Insure  Your Home  Against  Winter Weather   Insuring Against  The High Costs Of Cancer   Your renters’ policy will state exactly what youre  insured against. Want to improve your English in five minutes a day? Get a subscription and start receiving our writing tips and exercises daily! Keep learning! Browse the Misused Words category, check our popular posts, or choose a related post below:What Does [sic] Mean?Empathy "With" or Empathy "For"?Comment, Suggestion, and Feedback

Assignment One Essay Example | Topics and Well Written Essays - 1000 words

Assignment One - Essay Example The lives of Giovanni and Lusanna further portray the differing social statuses of women as well as the role they play in the revitalization. On the other hand, the lives of Martin and Bertrande show the arising events throughout the lives of this couple. However, all these events come back to a common ground, which is love. Love then grows and ends with marriage, and at this point, its relationship with law starts to develop2. These two stories about lives of two different couples are similar in a number of ways. To begin with, both stories reveal a lot of love between the couples, which in turn leads to marriage. According to the story about Giovanni and Lusanna, for instance, the theme of love proves to prevail on their day of marriage. The author states that their lives together proved that marriages actually happened out of love, not arrangements by parents. This means that two people had to come together and have a relationship before getting married to each other. Consequently , it served to enhance how much they knew each other and gave time for the two families to familiarize with each other. Similarly, the lives of Martin and Bertrande develop the aspect of marriage. Their story begins with the two getting married. Although their first appearance in the story is when they are teenagers, the author straight away drives us to the wedding ceremony. The usual procession then takes place after paying the bride’s dowry, and the wedding ceremony is over. However, with them it occurs in a much-unexpected manner. This renders marriage as a tremendously significant aspect in the story since it introduces it. In addition, the couples in each story go through a marriage ceremony perhaps with the intent of sealing their relationship and making it public. Furthermore, both stories incorporated the facet of law in them. In the life of Giovanni and Lusanna, her representation by her brother in the archbishop’s court incorporates the aspect of law. As men tioned in the Florence law, women could not represent themselves, but instead their legal guardians presented their cases. The author also explains the use of law to fight for the rights of women. Nevertheless, in the life story of Martin and Bertrande, law was a pivotal aspect in resolving disputes. The characteristic of law developed when Martin came back to their home and out of nowhere claimed himself as the rightful heir to the family’s wealth. Martin demanded that he get his portion of the inheritance despite his disappearance. He made it worse by threatening his uncle, who now headed the family, that if he did not give him his inheritance, he would take the disagreement to court. This tells the reader that people in the story recognized the presence of the courts, and they were subject to its ruling. Conversely, both stories had disagreeing aspects, for instance, the social interactions. In the lives of Giovanni and Lusanna, there is a clear background of social intera ctions, as opposed to the story about Martin and Bertrande. Additionally, in Giovanni’s and Lusanna’s lives, the entire process diffuses into the story in a progressive manner, perhaps in the effort to explain their background. Although support of premarital relationships was minimal in their times, people still engaged themselves in premarital intercourse. This explains the realities of