Question 2
To be presented in attached template You are to develop the fundamentals of strategic plans for the Ford Motor Company and the Honda Motor Corporation, two giants of the automobile industry. You are to develop SWOT analyses and propose strategies for the two multinational enterprises. In doing so, it will be necessary to research, analyze, and compare both firms to better understand their current position and future plans to increase competitive advantage. Common problems facing each auto giant today are the current economy; the competition of the other auto firms; and the demand for a lower cost, more ecologically friendly, alternative fuel vehicle. Your research should include the following issues for both firms: ?legal, social, and economic environments ?management structure ?operational and financial issues ?impact of potential change factors ?an analysis of strategic intent ?future performance projections for at least five years ?social and external challenges ?current manufacturing facilities and distribution systems ?market demand and demographics ?alternative fuels and propulsion systems Your document must evaluate, compare and contrast Ford?s and Honda?s current position on these issues, then respond to the following: 1.Take the perspective of Ford?s Director of Strategic Planning to develop a full SWOT analysis of Ford, identifying and explaining at least five factors for each category (strengths, weaknesses, opportunities and threats) and propose a complete strategy (implementation, ramification and evaluation) which addresses one of Ford?s weaknesses and what you would do about it. 2.Take the perspective of Honda?s Director of Strategic Planning to develop a full SWOT analysis of Honda, identifying and explaining at least five factors for each category (strengths, weaknesses, opportunities and threats) and propose a complete strategy (implementation, ramification and evaluation) which addresses one of Honda?s weaknesses and what you would do about it. 3.If you were Honda, propose a complete strategy (implementation, ramification and evaluation) explaining what would you do about the alternative fuel vehicle issue? ? Do not propose an alternative fuel vehicle strategy for response to questions 1 or 2.,Thank you. Please address the template because it may give a better understanding of the requirements. Thank you.,Rachel what you have sent to me has already been turned in by another student in August of 2010. The similarity score is 99%. Although I may be able to build on this information my similarity score cannot be more than 20%. Also I asked that you use the template which I uploaded. It asks that we provide a strategy for the two companies based on the SWOT and all factors of the SWOT needs to be supported in essay format. Part of the strategy is also identifying implementation processes, ramification, and evaluation. If you cannot view the template I will be more than happy to send it again.
Question 5
Parent, Inc. is contemplating a tender offer to acquire 80 percent of Subsidiary Corporation's common stock. Subsidiary's shares are currently quoted on the New York Stock Exchange at $85 per share. In order to have a reasonable chance of the tender offer attracting 80 percent of Subsidiary's stock, Parent believes it will have to offer at least $105 per share. If the tender offer is made and is successful, the purchase will be consummated on January 1, 2009. A typical part of the planning of a proposed business combination is the preparation of projected or pro forma consolidated financial statements. As a member of Parent's accounting group, you have been asked to prepare the pro forma 2009 consolidated financial statements for Parent and Subsidiary assuming that 80 percent of Subsidiary's stock is acquired at a price of $105 per share. To support your computations, Martha Franklin, the chairperson of Parent's acquisitions committee, has provided you with the projected 2009 financial statements for Subsidiary. (The projected financial statements for Subsidiary and several other companies were prepared earlier for the acquisition committee's use in targeting a company for acquisition.) The projected financial statements for Subsidiary for 2009 and Parent's actual 2008 financial statements are presented in table 1. Assumptions Ms. Franklin has asked you to use the following assumptions to project Parent's 2009 financial statements: ? Sales will increase by 10 percent in 2009. ? All sales will be on account. ? Accounts receivable will be 5 percent lower on December 31, 2009, than on December 31, 2008. ? Cost of goods sold will increase by 9 percent in 2009. ? All purchases of merchandise will be on account. ? Accounts payable are expected to be $50,500 on December 31, 2009. ? Inventory will be 3 percent higher on December 31, 2009, than on December 31, 2008. ? Straight-line depreciation is used for all fixed assets. ? No fixed assets will be disposed of during 2009. The annual depreciation on existing assets is $40,000 per year. ? Equipment will be purchased on January 1, 2009, for $48,000 cash. The equipment will have an estimated life of 10 years with no salvage value. ? Operating expenses, other than depreciation, will increase by 14 percent in 2009. ? All operating expenses, other than depreciation, will be paid in cash. ? Parent's income tax rate is 40 percent, and taxes are paid in cash in four equal payments. Payments will be made on the 15th of April, June, September, and December. For simplicity, assume taxable income equals financial reporting income before taxes. ? Parent will continue the $2.50 per share annual cash dividend on its common stock. ? If the tender offer is successful, Parent will finance the acquisition by issuing $170,000 of 6 percent non-convertible bonds at par on January 1, 2009. The bonds would first pay interest on July 1, 2009, and would pay interest semi-annually thereafter each January 1 and July 1 until maturity on January 1, 2019. ? The acquisition will be accounted for as a purchase and Parent will account for the investment using the equity method. Although most of the legal work related to the acquisition will be handled by Parent's staff attorney, direct costs to prepare and process the tender offer will total $2,000 and will be paid in cash by Parent in 2009. As of January 1, 2009, all of Subsidiary's assets and liabilities are fairly valued except for machinery with a book value of $8,000, an estimated fair value of $9,500, and a 5-year remaining useful life. Assume that straight-line depreciation is used to amortize any revaluation increment. No transactions between these companies occurred prior to 2009. Regardless of whether they combine, Parent plans to buy $50,000 of merchandise from Subsidiary in 2009 and will have $3,600 of these purchases remaining in inventory on December 31, 2009. In addition, Subsidiary is expected to buy $2,400 of merchandise from Parent in 2009 and to have $495 of these purchases in inventory on December 31, 2009. Parent and Subsidiary price their products to yield a 65 percent and 80 percent markup on cost, respectively. Parent intends to use three financial yardsticks to determine the financial attractiveness of the combination. First, Parent wishes to acquire Subsidiary Corporation only if 2009 consolidated earnings per share will be at least as high as the earnings per share Parent would report if no combination takes place. Second, Parent will consider the proposed combination unattractive if it will cause the consolidated current ratio to fall below 2 to 1. Third, return on average stockholders' equity must remain above 20 percent for the combined entity. If the financial yardsticks described above and the non-financial aspects of the combination are appealing, then the tender offer will be made. On the other hand, if these objectives are not met, the acquisition will either be restructured or abandoned. Milestones 1. Forecast the separate financial statements of Parent, Inc. Using Ms. Franklin's assumptions and Parent's 2008 financial statements, prepare pro forma 2009 financial statements for Parent, Inc., assuming that the acquisition is not attempted. Support your statements with appropriate work papers and journal entries. Pro forma financial statements include Statement of Operation; Statement of Retained Earnings, Balance Sheet and Cash Flow Statement. 2. Adjust the separate financial statements of Parent, Inc. to reflect the proposed acquisition. Adjust Parent's pro forma 2009 financial statements prepared in #1 to reflect the proposed acquisition (i.e., adjust Parent's forecasted financial statements for bond issuance, stock purchase, income from subsidiary, etc.). Support your statements with appropriate work papers and journal entries. Pro forma financial statements include Statement of Operation; Statement of Retained Earnings, Balance Sheet and Cash Flow Statement. 3. Prepare pro forma consolidated worksheet. Prepare a pro forma consolidation worksheet for Parent, Inc. and its proposed subsidiary as of December 31, 2009. To ensure you are starting with the right numbers, use the solution provided to Milestone 1 for the adjusted pro forma 2009 financial statements of Parent, Inc., and the projected 2009 financial statements of Subsidiary Corporation in table 1. Show all consolidation adjusting entries including minority interest entries. 4. Perform ratio analysis. Compute earnings per share for (1) the separate financial statements of Parent, Inc. prepared in #1 and (2) the consolidated financial statements contained in the solution for the pro forma consolidation worksheet prepared in #3. Also, calculate current ratio and return on average stockholders' equity for the separate company and consolidated financial statements. 5 Write a memorandum (as a Word document) to Ms. Franklin summarizing the results of your analysis, including a summary of the financial ratios you computed and your recommendation. Attach copies of both sets of pro forma financial statements of Parent, Inc. and the pro forma consolidation worksheet. Table 1 Parent , Inc Actual Financial Statements for 2008 and Subsidiary Corporation Projected Financial Statements for 2009 Parent 2008 Actual Subsidiary 2009 Projected Sales $ 800,000 $ 100,000 Cost of Goods Sold (485,000) (55,000) Operating Expenses (219,000) (10,000) Income before Taxes 96,000 35,000 Income Tax Expense (38,400) (14,000) Net Income $ 57,600 $ 21,000 Retained Earnings January 1 $ 23,000 $ 14,500 Add Net Income 57,600 21,000 Deduct Dividends (38,000) (7,000) Retained Earnings December 31 $ 42,600 $ 28,500 Cash $ 36,200 $ 19,500 Accounts Receivable 39,000 13,000 Inventory 26,000 12,000 Property, Plant and Equipment 673,000 213,000 Accumulated Depreciation (490,000) (28,000) Total Assets 284,200 229,500 Accounts Payable 44,600 21,000 Common Stock* 190,000 150,000 Paid-in Capital in Excess of Par 7,000 30,000 Retained Earnings 42,600 28,500 Total Liabilities & Equities $ 284,200 $ 229,500 *Parent: $12.50 par value. Subsidiary: $75 par value Course Project Check Figures ? Req #1 Net Income ?...$61,494 Cash...........?...$63,564 Total Assets....$313,594 Ret. Earnings....$66,094 Req #2 Net Income ???????....$63,225 Cash.........???????......$62,910 Investment in Subsidiary??.$177,485 Total Assets???????..$490,425 Ret. Earnings???????..$67,825 ",Hi there, Thank you. Where's the answer for #4 Ratio Analysis and #5 Memorandum? Also for the statement of Operations, How did you arrive to the Interest Expense of $10,200 ? Thank you.,Hi Michael, The balance sheet should have a comparative presentation - your statement of cash flow does not agree to balance sheet. Please use the indirect method. Also, how did you get an increase in income taxes payable when the balance sheet does not show the balance for that account? On the statement of cash flows - why undistributed earnings? This seems to be an incorrect presentation. Also, dividend should be broken out in investing section. Please let me know what you think. Thank you.,Hi there, I attached the professor's solution for the requirement 1 & 2. Please review and let me know what you think. Can you do the requirement # 3 and #4 based on the attached solution? Question on the old spreadsheet or answer your provided me. Under the statement of operations what is the reason behind deducting the excess fair value allocated to machinery from the Consolidated operating expenses - $259,100 ??? Thank you.,Hi there, On the requirement #3 worksheet, The Parent 2009 numbers did not agree with the M1 Req 1&2 numbers (solution by the professor)? Why would it change? Please update. Also, you didn't answer my previous question about the reason behind deducting the excess fair value allocated to machinery from the Consolidated operating expenses - $259,100 ??? Thank you.,Also, please label the journal entries such as Consolidating Entry S, Consolidating Entry D or Consolidating Entry E. Thank you.,Hi there, Please see the attached solution for requirement #3. Different from your spreadsheet. Please review and revise your answer for requirement 4 and 5. I noticed the formula on your return on average stockholder's equity is picking up numbers from your c drive in which I don't have access to (of course). Please revise the answer to requirement #4 and 5 based on the attached numbers. For the ratio analysis - please consider the industry average. Thank you.,industry average is not necessary. Thanks.
