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Benjamin L. Dow - One of the best experts on this subject based on the ideXlab platform.
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St. Louis Chemical: Cost of capital.(Instructor's Note)
Journal of the International Academy of Case Studies, 2011Co-Authors: David A. Kunz, Benjamin L. DowAbstract:CASE DESCRIPTION The primary subject matter of this case concerns the issues surrounding a firm's weighted average cost of capital (WACC). Case provides a review of cost of capital issues. The case requires students to have knowledge of accounting and finance, thus the case has a difficulty level of three (junior level) or higher. The case is designed to be taught in one class session of approximately 1.25 hours and is expected to require 2-3 hours of preparation time from the students. CASE SYNOPSIS The case tells the story of Don Williams, President and primary owner of St. Louis Chemical. By most measures, the performance of St. Louis Chemical has been very good over the last three years, with sales and income increasing each year Business growth has been steady but a recent increase in demand has placed a strain on existing Operations. To keep pace with demand, the capacity of the current warehouse and packaging Operations need to be increased. The cost of the facility expansion has been estimated to be $900,000 by St. Louis Chemical's Operation Manager. Since beginning Operations, Williams has been reluctant to borrow funds. He has been content with limited growth, financed with internally generated equity. Recently hired Edison Hesselbach, the company's first finance professional, has recommended borrowing the required funds. Williams indicated he may be willing to consider a change in his long-standing policy against debt, but wants more information regarding using debt in the firm's capital structure. CASE USE The case as written includes discussion questions to aid the student in their analysis of St. Louis Chemical's current situation. The case can be made more difficult by omitting the discussion questions. CASE OVERVIEW As the case opened Don Williams, the President of the St. Louis Chemical, a regional chemical distributor, headquartered in St. Louis, Missouri, is in need of additional assets and financing to support future growth. To keep pace with demand, the capacity of the current warehouse and packaging Operations need to be increased. The cost of the facility expansion has been estimated to be $900,000 by St. Louis Chemical's Operation Manager. Williams has also followed a conservative financing policy. Since beginning Operations, he has been reluctant to borrow funds, content with limited growth, financed with internally generated equity. The only long-term debt on the company's balance sheet reflects the financing associate with vehicles. If the facility is to be expanded, additional external financing will be necessary. St. Louis Chemical's income statement and balance sheet for the years 2007-2009 are provided in Schedules One and Two, respectively. Hesselbach has recommended borrowing the required funds. Williams indicated he may be willing to consider a change in his long-standing policy against debt, but wants more information regarding the advantages of using debt in the firm's capital structure. Hesselbach, using input from an investment-banking firm, has estimated the company's cost of equity to be 14%. A St. Louis bank has indicated a long-term bank loan can be arranged to finance expansion at an annual interest rate of 10%. The bank would require either loan to be secured with expansion and other company assets. The loan agreement would also include a number of restrictive covenants, including a limitation of dividends while the loans are outstanding. Only a small amount of long-term debt is included in the firm's current capital structure, the firm's debt ratio at the end of 2009 was 21% and long-term debt was only .28% of total assets (see schedule 2). Hesselbach calculated that if a long-term bank loan was used to obtain the needed $900,000, the firm's debt ratio would increase to 30%. He believes a 30% debt and 70% equity capital mix would be conservative and a starting point for introducing long-term debt into the firm's capital structure. …
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St. Louis Chemical: Cost of Capital
Journal of the International Academy of Case Studies, 2011Co-Authors: David A. Kunz, Benjamin L. DowAbstract:CASE DESCRIPTION The primary subject matter of this case concerns the issues surrounding a firm's weighted average cost of capital (WACC). Case provides a review of cost of capital issues. The case requires students to have knowledge of accounting and finance, thus the case has a difficulty level of three (junior level) or higher. The case is designed to be taught in one class session of approximately 1.25 hours and is expected to require 2-3 hours of preparation time from the students. CASE SYNOPSIS The case tells the story of Don Williams, President and primary owner of St. Louis Chemical. By most measures, the performance of St. Louis Chemical has been very good over the last three years, with sales and income increasing each year Business growth has been steady but a recent increase in demand has placed a strain on existing Operations. To keep pace with demand, the capacity of the current warehouse and packaging Operations need to be increased. The cost of the facility expansion has been estimated to be $900,000 by St. Louis Chemical's Operation Manager. Since beginning Operations, Williams has been reluctant to borrow funds. He has been content with limited growth, financed with internally generated equity. Recently hired Edison Hesselbach, the company's first finance professional, has recommended borrowing the required funds. Williams indicated he may be willing to consider a change in his long-standing policy against debt, but wants more information regarding using debt in the firm's capital structure. BACKGROUND St. Louis Chemical is a relatively new regional distributor of liquid and dry chemicals, headquartered in St. Louis, Missouri. The company, founded by Don Williams, has been serving primarily eastern Missouri and western Illinois for four years and has developed a reputation as a reliable supplier of industrial chemicals. Williams' previous business experience provided him with a solid understanding of the chemical industry and the distribution process. As a general Manager for a chemical manufacturer, he had profit and loss (P&L) responsibility, but until beginning St. Louis Chemical, he had limited exposure to company accounting and finance decisions. The company reported small losses during its early years of Operation, but performance in recent years has been very good. Sales have grown, new product lines have been added and reported profits have been steadily increasing. The growth has required the acquisition of additional land, equipment, expansion of storage capacity and an increase in work force. Williams has proven to be an expert marketer, and St. Louis Chemical has developed a reputation with its customers of providing quality products and superior service at competitive prices. Despite its business success, St. Louis Chemical is still a "large" small business with Williams making all important decisions. He recognized the need to develop a professional Managerial staff, particularly in the area of finance. Recently, he hired Edison Hesselbach as the company's first finance professional and placed him in charge of the company's accounting and finance activities. St. Louis Chemical's board of directors is composed of Williams, his father and the company's attorney. The board's existence satisfies state regulatory requirements for corporations but provides little, if any, input to business Operations. CHEMICAL DISTRIBUTION A chemical distributor is a wholesaler. Operations may vary but a typical distributor purchases chemicals in large quantities (bulk - barge, rail or truckloads) from a number of manufacturers. They store bulk chemicals in "tank farms", a number of tanks located in areas surrounded by dikes. The tanks can receive and ship materials from all modes of transportation. Packaged chemicals are stored in a warehouse. Other distributor activities include blending, repackaging, and shipping in smaller quantities (less than truckload, tote tanks, 5 5 -gallon drums, and other smaller package sizes) to meet the needs of a variety of industrial users. …
David A. Kunz - One of the best experts on this subject based on the ideXlab platform.
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St. Louis Chemical: Cost of capital.(Instructor's Note)
Journal of the International Academy of Case Studies, 2011Co-Authors: David A. Kunz, Benjamin L. DowAbstract:CASE DESCRIPTION The primary subject matter of this case concerns the issues surrounding a firm's weighted average cost of capital (WACC). Case provides a review of cost of capital issues. The case requires students to have knowledge of accounting and finance, thus the case has a difficulty level of three (junior level) or higher. The case is designed to be taught in one class session of approximately 1.25 hours and is expected to require 2-3 hours of preparation time from the students. CASE SYNOPSIS The case tells the story of Don Williams, President and primary owner of St. Louis Chemical. By most measures, the performance of St. Louis Chemical has been very good over the last three years, with sales and income increasing each year Business growth has been steady but a recent increase in demand has placed a strain on existing Operations. To keep pace with demand, the capacity of the current warehouse and packaging Operations need to be increased. The cost of the facility expansion has been estimated to be $900,000 by St. Louis Chemical's Operation Manager. Since beginning Operations, Williams has been reluctant to borrow funds. He has been content with limited growth, financed with internally generated equity. Recently hired Edison Hesselbach, the company's first finance professional, has recommended borrowing the required funds. Williams indicated he may be willing to consider a change in his long-standing policy against debt, but wants more information regarding using debt in the firm's capital structure. CASE USE The case as written includes discussion questions to aid the student in their analysis of St. Louis Chemical's current situation. The case can be made more difficult by omitting the discussion questions. CASE OVERVIEW As the case opened Don Williams, the President of the St. Louis Chemical, a regional chemical distributor, headquartered in St. Louis, Missouri, is in need of additional assets and financing to support future growth. To keep pace with demand, the capacity of the current warehouse and packaging Operations need to be increased. The cost of the facility expansion has been estimated to be $900,000 by St. Louis Chemical's Operation Manager. Williams has also followed a conservative financing policy. Since beginning Operations, he has been reluctant to borrow funds, content with limited growth, financed with internally generated equity. The only long-term debt on the company's balance sheet reflects the financing associate with vehicles. If the facility is to be expanded, additional external financing will be necessary. St. Louis Chemical's income statement and balance sheet for the years 2007-2009 are provided in Schedules One and Two, respectively. Hesselbach has recommended borrowing the required funds. Williams indicated he may be willing to consider a change in his long-standing policy against debt, but wants more information regarding the advantages of using debt in the firm's capital structure. Hesselbach, using input from an investment-banking firm, has estimated the company's cost of equity to be 14%. A St. Louis bank has indicated a long-term bank loan can be arranged to finance expansion at an annual interest rate of 10%. The bank would require either loan to be secured with expansion and other company assets. The loan agreement would also include a number of restrictive covenants, including a limitation of dividends while the loans are outstanding. Only a small amount of long-term debt is included in the firm's current capital structure, the firm's debt ratio at the end of 2009 was 21% and long-term debt was only .28% of total assets (see schedule 2). Hesselbach calculated that if a long-term bank loan was used to obtain the needed $900,000, the firm's debt ratio would increase to 30%. He believes a 30% debt and 70% equity capital mix would be conservative and a starting point for introducing long-term debt into the firm's capital structure. …
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St. Louis Chemical: Cost of Capital
Journal of the International Academy of Case Studies, 2011Co-Authors: David A. Kunz, Benjamin L. DowAbstract:CASE DESCRIPTION The primary subject matter of this case concerns the issues surrounding a firm's weighted average cost of capital (WACC). Case provides a review of cost of capital issues. The case requires students to have knowledge of accounting and finance, thus the case has a difficulty level of three (junior level) or higher. The case is designed to be taught in one class session of approximately 1.25 hours and is expected to require 2-3 hours of preparation time from the students. CASE SYNOPSIS The case tells the story of Don Williams, President and primary owner of St. Louis Chemical. By most measures, the performance of St. Louis Chemical has been very good over the last three years, with sales and income increasing each year Business growth has been steady but a recent increase in demand has placed a strain on existing Operations. To keep pace with demand, the capacity of the current warehouse and packaging Operations need to be increased. The cost of the facility expansion has been estimated to be $900,000 by St. Louis Chemical's Operation Manager. Since beginning Operations, Williams has been reluctant to borrow funds. He has been content with limited growth, financed with internally generated equity. Recently hired Edison Hesselbach, the company's first finance professional, has recommended borrowing the required funds. Williams indicated he may be willing to consider a change in his long-standing policy against debt, but wants more information regarding using debt in the firm's capital structure. BACKGROUND St. Louis Chemical is a relatively new regional distributor of liquid and dry chemicals, headquartered in St. Louis, Missouri. The company, founded by Don Williams, has been serving primarily eastern Missouri and western Illinois for four years and has developed a reputation as a reliable supplier of industrial chemicals. Williams' previous business experience provided him with a solid understanding of the chemical industry and the distribution process. As a general Manager for a chemical manufacturer, he had profit and loss (P&L) responsibility, but until beginning St. Louis Chemical, he had limited exposure to company accounting and finance decisions. The company reported small losses during its early years of Operation, but performance in recent years has been very good. Sales have grown, new product lines have been added and reported profits have been steadily increasing. The growth has required the acquisition of additional land, equipment, expansion of storage capacity and an increase in work force. Williams has proven to be an expert marketer, and St. Louis Chemical has developed a reputation with its customers of providing quality products and superior service at competitive prices. Despite its business success, St. Louis Chemical is still a "large" small business with Williams making all important decisions. He recognized the need to develop a professional Managerial staff, particularly in the area of finance. Recently, he hired Edison Hesselbach as the company's first finance professional and placed him in charge of the company's accounting and finance activities. St. Louis Chemical's board of directors is composed of Williams, his father and the company's attorney. The board's existence satisfies state regulatory requirements for corporations but provides little, if any, input to business Operations. CHEMICAL DISTRIBUTION A chemical distributor is a wholesaler. Operations may vary but a typical distributor purchases chemicals in large quantities (bulk - barge, rail or truckloads) from a number of manufacturers. They store bulk chemicals in "tank farms", a number of tanks located in areas surrounded by dikes. The tanks can receive and ship materials from all modes of transportation. Packaged chemicals are stored in a warehouse. Other distributor activities include blending, repackaging, and shipping in smaller quantities (less than truckload, tote tanks, 5 5 -gallon drums, and other smaller package sizes) to meet the needs of a variety of industrial users. …
Mohd Hisarudin, Muhammad Asyraf Haikal - One of the best experts on this subject based on the ideXlab platform.
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Powersolarz Sdn. Bhd. / Muhammad Asyraf Haikal Mohd Hisarudin
2020Co-Authors: Mohd Hisarudin, Muhammad Asyraf HaikalAbstract:Powersolarz Sdn. Bhd. is the company establish and grow in the segment of hardware consuming technologies. The company is a start-up company that will offer and provide a solar power bank name Solarz for customers. Solarz serves the customers with stylish and latest designs, styles, colours of the solar power bank to cater customer needs. Besides, the power bank also designed with high-quality materials to achieve high satisfaction of customers. Other than that, it is also small in size to facilitate consumers to bring everywhere. The management of the business consists of the General Manager name Asyraf Haikal. He assisted by 5 lead workers whereas Abu Bin Abi as Marketing Manager, Salleh Bin Mohd as Finance Manager, Adam Bin Ahmad as Electrical Engineering Manager, Halim Bin Saari as Operation Manager, Kamal Bin Mat as Human Resource Manager. They are highly skilled and talented in their respective fields for having working experience with various companies before. They will ensure that they will be performed in doing tasks together although they different duties and portfolios in order to serve in Powersolarz Sdn Bhd
Nur Hafizah, Mohamad Sahabuddin - One of the best experts on this subject based on the ideXlab platform.
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HikariNeko Sdn. Bhd / Nur Hafizah Mohamad Sahabuddin
2020Co-Authors: Nur Hafizah, Mohamad SahabuddinAbstract:My business is conceptually stylish, but simple and looks rich so I use international languages such as Japanese as my company and my product name.I created a business like this because most women 's pads are designed to be uncomfortable and unsafe as they are made of waste materials such as paper and chemicals like plastic.That is why I created the company mission is "We will strive to ensure that our customers are satisfied with the commitment and attitude we give to our customers and ensure that our products are quality products and guarantee customer satisfaction" and the vision is "To create a better everyday life for the many people. " because it is based on my company's opening factors.HikariNeko sells and provides a wide range of products and services. Our top priority product is Akaichi Pad. Akaichi Pad is very special as it contains negative ion gels which can bleed. HikariNeko also provides language-friendly, polite agents and caliber.The service we place on the Akaichi Pad is a demonstration service of 'How to wash the Akaichi Pad and the advantages and differences between Akaichi Pad and other brand pads'. Then,I will introduce my reliable workers,Administrative Manager Nur Athirah Bt Aznan,Marketing Manager Nur Farisha Shahirah Bt Shahrul Azmi,Operation Manager Nurul Syahirah Bt Muhd Rashidi, Production Worker Syafiqah Bt Mohamad,Finance Manager Admirol Haqimie Bin Mohd Fauzi.I put my salary in line with the position they were in.My target audience is mainly for women between the ages of 12 and 50. It's because my company is young, so I only focused on sales in Kuala Lumpur and Selangor.After calculations, only 4% of contacts became customer base in both areas.Since the other brand pads cost RM15 - RM19 and are expensive though made from waste so I put RM26 for one Akaichi Pad in all sizes.So based on the difference in the price of other brands and my brand, my profit is only 16% of the uniqueness of this pad.Like people say ‘it is expensive as long as it is quality’. HikariNeko will use the distribution method from Manufacturer to Stockists to Consumer as its main distributor.HikariNeko uses modern methods to expand the business and popularity of Akaichi pads. Promote products through advertising on social media such as Instagram and Youtube, radio, internet (Website), business cards and television.Promotional sales methods such as P.O.P, premiums, sweepstakes and samples. Public relations benefits such as charity,a Q&A interview with the founder,share news about the jobs I creating,enter and win awards and look for awareness days relevant to my business.My last method of marketing strategy was personal selling like face-to-face demonstrations with customers.Producing intimacy products like this is extremely challenging as it involves women's vital assets, so it must be carefully and neatly made. Additionally, such intimate products have been widely marketed by other brands.However, it is an advantage because 90% of intimate brand products are designed to be unsafe to use, so many of these brand products can be studied where the disadvantages and advantages and how they work well without any problems and what materials can be added to in the manufacture of pads so that it solves the main problem of women.As I mentioned earlier, I raise prices so I only get 16% profit on every Akaichi Pad sale.I think this price is in line with the materials, the way they are made and how the packaging is designed.With such major products as the capital I need to spend is not as much as other companies / dealers because Akaichi Pad only requires certain machines such as cutters, glue machines, box makers and printers for its font and color parts
Radosław Wolniak - One of the best experts on this subject based on the ideXlab platform.
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Operation Manager and its role in the enterprise
Production Engineering Archives, 2019Co-Authors: Radosław WolniakAbstract:Abstract Presented paper concentrate on problems connected with the role of Operation Manager within industrial company. Operation management concentrate many activities in today’s industrial corporation and because of that the role of it’s Manager is very important. He should to have many skills described in this paper. We analysed responsibilities of the Operation Manager, his basic Operational skills and also give some examples of duties and responsibilities of good Operation Manager on the example of food industry. This example can give some remarks about practical skills needed in Operation management in particular enterprise.