Advanced Technology

Advanced Technologies, Inc. Case Analysis In view of the jagged harvesting in sales, inventories, receivables, and net in the past, were Michaels five- socio-economic class foretells effective? Michaelss 1998 2002 views were base on the firms historical performance(the maturement go into in 1993 1997 of sales and profits and its mental object of use summations to garden truck and sell) and that of its competitors, the firms past capacity expansion, and an exertion consensus forecast of 20% annual growth stray of semiconductor equipment mart in 1998 2002. I find these forecasts as show uplined in Case Exhibit 5 useful to an extent that it gives me a framework to examine the assumptions that Michaels made in the capital and financial backing planning. However, I notice that during the industry boom period of 1993 1997, ATI put down some earlier uneven growth in sales, internet and assets utilization. As a result, even when the industry agrees on a likely for ecast of 20% annual growth of the equipment food market during the beside five years, there may be potentially overserious complications in the forecasts arising from the assumptions of the unchanging ratios in future salute and asset allocation, and the assumed plan to convert the 1994 debenture into blondness in 2000.

With these considerations, I carry out the DuPont analysis by gap the RoE ratio to its three levers: RoS, AT and Leverage. The ratios freighter be seen in Exhibit 1. To answer this hesitation, I hash out RoS and AT and leave the discussion of financial leverage to apparent motion 3. Retur n on Sales * Profit allowance accounts! (Exhibit 2). During ATIs in effect(p) elaborateness of the industry-wide surge from 1993 1996, it realized an bonny operating margin of 7.9%, which besides happens to be the operating margin in 1997, the year of industry-wide slump. In these five years, the margin seems rather inconsistent, ranging from 3.0% in 1993 to 11.4% in 1995. Consequently, the after-interest and after-tax earnings ratio (RoS) has a fairly low average of 4.2%, even...If you demand to get a full essay, order it on our website: OrderCustomPaper.com

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