Question: HHG Consultants has been asked to analyze Carol Carroll
HHG Consultants has been asked to analyze Carol & Carroll Co. (C&C), which has one retail division. C&C is concerned that it is not focused on its core mission of sales despite only having one division. Each store is divided into departments: casual clothing (CC), formal clothing (FC), outerwear (OW), shoes (S), and specialty items (SI). C&C’s initial impression is that all of the departments contribute equally to sales. However, examination of each department’s actual sales reveals that the breakdown is very different: $5.2 billion (CC), $2.7 billion (FC), $3.75 billion (OW), $4.5 billion (S), and $1.7 billion (SI). Compute a Herfindahl Index based on the departments having equal sales and based on the actual sales. Your conclusion concerning the firm’s becoming unfocused will be based on the actual HI being lower than the equivalent sales HI scenario. What does your analysis find with regard to the focus of C&C’s retailing division?
Relevant QuestionsFirm X has three divisions that generate revenues of $1.3 billion, $2.5 billion, and $5.2 billion. Firm Y is a competitor with three associated divisions that generate $2 billion each. Using a Herfindahl Index to measure ...You are the director of capital acquisitions for Crimson Software Company. One of the projects you are considering is the acquisition of Geekware, a private software company that produces software for finance professors. ...Following the previous question, what if BOG instead financed the acquisition entirely with debt at an after-tax cost of 9%? Would the deal be accretive or dilute to earnings for BOG shareholders? Why do creditors usually accept a plan for financial rehabilitation rather than demand liquidation of a business? A firm has $450,000 in funds to distribute to its unsecured creditors. Three possible sets of unsecured creditor claims are presented. Calculate the settlement, if any, to be received by each creditor in each case shown in ...
Post your question