Tim Hortons Company Analysis Essay Example for Free

Tim Hortons Company Analysis Essay The Tim Hortons chain was founded in 1964 in Hamilton, Ontario. The chains focus on top quality, always fresh product, value, great service and community leadership has allowed it to grow into the largest quick service restaurant chain in Canada specializing in always fresh coffee, baked goods and home style lunches. The first Tim Hortons restaurants offered only two products coffee and donuts. The selection of donuts to enjoy was highlighted by two original Tim Hortons creations, the Apple Fritter and the Dutchie. They became the most popular donut choices in the 60s, and remain two of the most popular today. But as consumer tastes grew, so did the choices at Tim Hortons. The biggest change in the chains product focus took place in 1976 with the introduction of the phenomenally successful Timbit (bite-sized donut hole), today available in over 35 different varieties. The chains growth into the 1980s brought about a whole series of new product introductions: muffins (1981), cakes (1981), pies (1982), croissants (1983), cookies (1984), and soups ;amp; chili (1985). Sandwiches, which were originally introduced in 1993, were re-introduced as a new and improved line-up of 6 varieties, called Tims Own, in 1998. Also, in the 1990s, bagels (1996), flavoured cappuccino (1997), Cafe Mocha (1999) and Iced Cappuccino (1999) were introduced. In 2003, the Turkey Bacon Club sandwich and Maple Pecan Danish were successful menu additions. In 2005 Tim Hortons introduced, Yogurt amp; Berries, Cinnamon Roll and Hot Smoothee to the menu. Many new great products were added to the menu in 2006 such as the Chicken Salad Wrap and the hot Breakfast Sandwich (eggs, sausage or bacon, processed cheese on a toasted home style biscuit). The chains biggest drawing card remains its legendary Tim Hortons coffee. To ensure the coffee is always fresh, Tim Hortons serves its coffee within 20 minutes of being brewed or its not served at all. The premium blend is also available in cans, as are Tim Hortons hot chocolate and flavoured cappuccinos, allowing guests to enjoy these great tasting products at home. GLOBAL RESTAURANT SYSTEM DEVELOPMENT The first Tim Hortons restaurant was opened in 1964 by Tim Horton, a National Hockey League All-Star defenseman. In 1967, Tim Horton and Ron Joyce, then the operator of 3 Tim Hortons restaurants, became partners and together they opened 37 restaurants over the next 7 years until Tim Horton’s death in 1974. Mr. Joyce became the sole owner in 1975. In the early 1990s, Tim Hortons and Wendy’s, now owned by The Wendy’s Company (â€Å"Wendy’s†), entered into a partnership to develop real estate and combination restaurant sites with Wendy’s and Tim Hortons restaurants under the same roof in North America. In 1995, Wendy’s purchased Mr. Joyce’s interest in the Tim Hortons system and incorporated the company known as Tim Hortons Inc. , a Delaware corporation (â€Å"THI USA†), as a wholly owned subsidiary. In 2006, Tim Hortons became a standalone public company pursuant to an initial public offering and a subsequent spin-off of its common stock to Wendy’s stockholders through a stock dividend on September 29, 2006. Tim Hortons restaurants operate in a variety of formats. Tim Hortons’ standard restaurant locations typically range from 1,000 to 3,080 square feet. The non-standard restaurant locations include small, full-service restaurants; self-serve kiosks, typically with a limited product offering, in offices, hospitals, colleges, airports, grocery stores, gas and other convenience locations; drive-thru-only units on smaller pieces of property; and full-serve locations in sports arenas and stadiums that operate only during on-site events. Also Tim Hortons developed co-branded locations in its restaurant system. Tim Hortons is party to an agreement with Kahala Franchise Corp. the franchisor of the Cold Stone Creamery brand, pursuant to which Tim Hortons has exclusive development rights in Canada. Tim Hortons is also party to an agreement with Kahala Franchising, L. L. C. in the U. S. , pursuant to which Tim Hortons has the right to use the Cold Stone Creamery trademarks in specified locations in the U. S. The development process for each standard restaurant location typically takes 12 to 18 months. Development of non-standard restaurants an d self-serve kiosks usually requires much less time. Tim Hortons typically oversee and direct all aspects of restaurant development for system restaurants, from an initial review of a location’s demographics, site access, visibility, traffic counts, mix of residential/retail/commercial surroundings, competitive activity, and proposed rental/ownership structure, to considerations of the performance of nearby Tim Hortons locations, projections of the selected location’s ability to meet financial return targets, restaurant owner identification, and physical land development and restaurant design and construction costs. As at December 30, 2012, the number of Tim Hortons restaurants across Canada, both standard and non-standard locations, which for this purpose includes self-serve kiosks, totalled 3,436. Standard restaurants constitute approximately 71. 4% of this total. In the U. S. , Tim Hortons has a regional presence with 804 restaurants, including self-serve kiosks, in 13 states, concentrated in the Northeast in New York and Maine, and in the Midwest in Michigan, Ohio and Pennsylvania with standard full-serve restaurants representing approximately 59. % of all U. S. restaurants. Notably, Tim Hortons owns, rather than leases, the land underlying a higher percentage of standard system restaurants in the U. S. than in Canada. Restaurant owners operated substantially all of Tim Hortons restaurants both in the CANADA and U. S Recently Tim Hortons has granted a master license to Apparel in the GCC States of the United Arab Emirates, Qatar, Bahrain, Kuwait and Oman, which is primarily a royalty-based m odel, together with ongoing supply chain margin and an upfront license fee. Apparel is responsible for capital spending, real estate development, operations, distribution and marketing. At the end of 2012, there were also 190 and 55 Tim Hortons kiosks in the Republic of Ireland and United Kingdom, respectively, which generally offer self-serve premium coffee, tea, specialty hot beverages and a selection of donuts and muffins at gas and other convenience locations. DISTRIBUTION SYSTEM Tim Hortons distribute items to its restaurants through 5 distribution centres located in Langley, British Columbia; Calgary, Alberta; Kingston, Ontario; Guelph, Ontario; and Debert, Nova Scotia. The Guelph and the Kingston facilities distribute frozen, refrigerated and shelf-stable products and dried goods to restaurants in our Ontario and Quebec markets. Under the franchise arrangements, each Canadian restaurant owner is required to purchase substantially all food and other products, such as coffee, sugar, and restaurant supplies, from Tim Hortons or it designated suppliers and distributors. Canadian and U. S. restaurant owners and international licensee are also required to purchase par-baked Maidstone Bakeries products from either Tim Hortons or an outside distributor, depending upon the restaurant location. Tim Hortons own or lease a significant number of trucks and trailers that regularly deliver to most of its Canadian restaurants. Tim Hortons uses third-party distributors to deliver all products to U. S. restaurants and to deliver to certain limited geographic areas of Canada. The international licensee, Apparel, is responsible for local delivery of all products in its market in the GCC through the use of third-party distributors. BUSINESS MODEL Tim Hortoms primary business model is to identify potential restaurant locations, develop suitable sites, and make these new restaurants available to approved restaurant owners. As at December 30, 2012, restaurant owners operated 99. 5% of Tim Hortons’ system wide restaurants. Tim Hortons directly own and operate (without restaurant owners) only a small number of company restaurants in Canada and the U. S. Tim Horton also have warehouse and distribution operations that supply paper and dry goods to a substantial majority of its Canadian restaurants, and supply frozen baked goods and some refrigerated products to most of its Ontario restaurants and Quebec restaurants. In the U. S. , Tim Hortons supply similar products to system restaurants through third-party distributors. Tim Hortons’ operations also include coffee roasting plants in Rochester, New York, and Hamilton, Ontario, and a fondant and fills manufacturing facility in Oakville, Ontario. These vertically integrated manufacturing, warehouse, and distribution capabilities benefit Tim Hortons’ restaurant owners and are important elements of Tim Hortons business model which allow it to: improve product quality and consistency; protect proprietary interests; facilitate the expansion of our product offerings; control availability and timely delivery of products; provide economies of scale and labour efficiencies; and generate additional sources of income and financial returns. Tim Hortons have a unique, layered business model that adds to the scale and success of its system. First, franchising takes account of more than 99% of Tim Hortons’ restaurant system. Tim Hortons have a long-standing history of building positive relationships and collaborating with its restaurant owners to grow collective business. Restaurant owners typically operate an average of 3 to 4 restaurants and have a significant stake in the success of the restaurants they operate. Second, Tim Hortons maintains a controlling interest in a significant majority of the real estate in the full-serve restaurant system in North America to maintain brand integrity and control development. Third, Tim Hortons operates with a â€Å"we fit anywhere† concept that allows it to adapt brand presence to take advantage of both standard and non-standard development opportunities. Fourth, Tim Hortons leverages significant levels of vertical integration that exist in the system. MANUFATURING Tim Hortons has 2 wholly owned coffee roasting facilities in Rochester, New York and Hamilton, Ontario, to blend all of the coffee for restaurants. Tim Hortons also own a facility that produces fondants, fills, and ready-to-use glaze, which are used in connection with a number of the products produced in its Always Fresh baking system. Until October 2010, Tim Hortons owned a 50% joint-venture interest in Maidstone Bakeries. Maidstone Bakeries continues to manufacture and supply all par-baked donuts, Timbits and selected breads, following traditional Tim Hortons recipes, as well as European pastries, including Danishes, croissants, and puff pastry. Those products are partially baked and then flash frozen and delivered to system restaurants, most of which have an Always Fresh oven with the Company’s proprietary technology. The restaurant completes the baking process with this oven and adds final finishing such as glazing and fondant, allowing the product to be served warm to the guest within a few minutes of baking. The Company sold its 50% joint-venture interest in Maidstone Bakeries to its former joint-venture partner, Aryzta, for gross cash proceeds of $475 million in October 2010. For additional information regarding Maidstone Bakeries, see â€Å"Source and Availability of Raw Materials† below. TIM HORTONS IN U. S We continued to focus on accelerating the time it takes to create critical mass for convenience and advertising scale in our most developed U. S. markets, primarily through deployment of the substantial majority of our U. S. restaurant development capital into core growth markets to increase awareness of the brand. We also continued to seek other marketing means, such as community involvement, sponsorships, event site product agreements and other forms of communication, to supplement traditional advertising to reinforce our brand position with guests and to broaden our brand awareness as a Cafe and Bake Shop destination; and sought to complement our U. S. standard format restaurant development activity with non-standard formats and locations through strategic partnerships and relationships. In 1995, Tim Hortons merged with Wendys International, Inc. giving new focus and impetus to the expansion of the Tim Hortons concept in the United States. Tim Hortons locations can presently be found in Michigan, Maine, Connecticut, Ohio, West Virginia, Kentucky, Pennsylvania, Rhode Island, Massachusetts and New York, with responsible expansion continuing in these core markets. The Canadian operation is 95% franchise owned and operated, and plans in the U. S. call for the same key strategy to be implemented as expansion progresses. Currently, there are more than 3,000 restaurants across Canada, and over 600 locations in the United States. In March 2006, Tim Hortons completed an initial public offering of the company and was fully spun off as a separate company as of September 29, 2006. Tim Hortons trades on the NYSE and TSX (THI). As one of the largest publicly traded quick service restaurant chain in North America based on market capitalization, and the largest in Canada, Tim Hortons has 4,264 system wide restaurants, including 3,436 in Canada, 804 in the United States and 24 in the Gulf Cooperation Council as of December 30th, 2012. Since the early 1990s, Tim Hortons and Wendy’s formed a partnership, owned on a 50/50 basis, and jointly developed the real estate underlying â€Å"combination restaurants† in Canada that offer Tim Hortons and Wendy’s products at the same location, typically with separate restaurant owners operating the Tim Hortons and the Wendy’s portions of the restaurant. The combination restaurants have separate drive-thrus, if the site allows for drive-thrus, but share a common

Burberry history Essay Example for Free

Burberry history Essay Barberry was founded in 1856; originally focusing on producing innovative functional outwear. over the years Barberry has adapted to changing trends and tastes to suit the consumers wants and needs. Additionally the extension of their product portfolio, for example their perfume and accessories range, Is a response to competition from leading brands such as Ralph Lauren and others. Barberry set out to create a luxury, premium brand image, however in recent years in Britain especially, the public perception of Barberry products have been labeled as chap kook because of their distinctive tartan pattern on clothing. In September 201 2 the high brand luxury clothing company Barberry issued a profit warning taking El ban off Buyers market value resulting with a share fall of 19%. We are currently In an economic recession which has resulted In less consumer confidence and a trend of reduced spending habits. However the types of consumers that purchase brands like Barberry would usually not be effected by the economic recession. They are likely to have much more disposable income and secure well- paid Jobs. Retail analyst Joana Satyrs stated that The global economic crawls Is dragging on and the longer It drags on the less confident even wealthier Individuals become. Meaning that even those with more disposable Income to spend on luxury goods such as Barberry, are less confident which Is a major factor resulting In reduced spending habits. If consumers are spending less the company is likely to result in profit losses. If the problem deteriorates it can result in closing of stores and making staff redundant; adding to the already high unemployment figures Barberry s a luxury brand is not immune from the economic instability which has seen weaker sales not only in the UK but globally. From researching Buyers share decrease we can see that the 2012 London Olympics has played a major factor in profit loss. The types of customers buying Barberry products are likely to live in expensive locations such as London; Barberry state that the London Olympics pulled tourists away from shopping and pushed them more towards visiting the Olympic park and stadium and spending their money on souvenirs. However due to the economic recession and the trend of reduced pending habits, Buyers luxury high priced goods were Increasingly likely to see reduced sales. Although wealthier Individuals are likely to be unaffected by the economic recession, the Auks high unemployment rate has made Buyers customer base even more restricted than before. In contrast to Buyers view that the Olympics contributed to their profit loss, we believe that the Olympics helped the Auks unemployment rate hugely giving more individuals and potential customers more disposable income. However now that the Olympics are over, it can shift focus onto spending more on brands such as Barberry. In comparison; lower priced stores such as Tops and H M are receiving higher likely to buy from stores that have fashionable styles and a wider variety of clothing at much lower prices. BBC business news (twitter) stated that UK retail sales rise as shoppers buy winter clothing and that sales volumes were up 0. 6% in the last month. Individuals are much more likely to spend EYE OHIO on a coat rather than an IEEE one; especially during the economic recession. Taking the above into account, there are a number of ways in which Barberry could improve their economic position in the retail market. While Barberry are not in a state of danger as it stands, if their profit and share prices were to decrease further they may have to cut their costs. This could see a decrease in quality of their products resulting to a decline in brand loyalty and a future reduction in sales. One way Barberry could improve their situation is by re-marketing their product range to appeal to a different target audience, that of the middle and working class. Evidence suggests that lower priced stores (Tops and HM) have been benefiting as a result of their lower prices. If Barberry were to adjust their position in the market, closer to that of HM they may wreak the rewards. However, we think that Barberry may tarnish their entire business reputation if they do so. It takes many years to achieve a high brand reputation like that of Barberry and it would be a massive risk to put it all on the line. Also the lower priced retailers market is dominated by a few big players and is extremely competitive, making it harder for Barberry to establish itself in the lower priced category. We think that Barberry should ride out the storm for the time being. If anything is to be done it should be investing more into marketing and branding to appeal to the upper middle-class. Although this would be costly initially, sales should pick up over time; improving Buyers share price and profits. Furthermore, in the meantime it would be easy for Barberry to take advantage of the current state of national pride (following the Olympics) and go back to basics promoting the Brutishness of their brand. Another way in which Barberry can improve their current situation is by taking a similar approach to Versa by launching a more economical clothing range with gig street brands such as HM. For Barberry to differentiate themselves they can instead launch their clothing range with Ezra rather than HM. Reason being that they types of clothes they offer are very similar in terms of sophistication and quality. This method was very successful with Versa as their line with HM sold out within 30 minutes. By introducing a more affordable clothing line, Barberry will advantage from an increase in sales and profits as demand from consumers will increase. The cheaper they market their new clothing range the more people would want to buy it s they will be purchasing Barberry clothing for a faction of the cost.

The Capital Structure choice of Pepsico

The Capital Structure choice of Pepsico The collection of securities that the firm issues to raise capital from investors is the firms capital structure. Equity and debt are the most commonly used securities by firms. The amount of debt determines the firms leverage. The firm should always use a capital structure which will maximize the total value of the securities issued. In order to determine the capital structure of a firm, It is also necessary to determine the different ratios such as net debt ratio, fixed coverage ratio, interest ratio, long term debt ratio, cash flow ratio, etc, to evaluate the effects of the ratios on the on the firm. These ratios are useful for comparing analyzing with other competitor firms. Ratios help the firm to determine their position in terms of the market value, book value, market capitalization, debt value, revenues, etc. The  Modigliani-Miller theorem states that, the firms value is unaffected by the way it is financed in the absence of taxes, bankruptcy costs and asymmetric information in a perfect market.  It does not matter if the firms capital is raised by issuing  stock  or by selling debt. It does not matter what the firms  dividend  policy is. Therefore, the Modigliani-Miller theorem is also often called the  capital structure irrelevance principle. We will look at this theory in detail in capital structure. In this report we look at the different theories (pecking order theory, trade-off theory, asset substitution theory, modigliani-miller theory) capital structure choice of PepsiCo by determining various ratios, comparing PepsiCo with its competitors. Analysis of the results and recommendations provided. INTRODUCTION Pepsi was originally named as Brads Drink, after its creator, Caleb Bradham, a pharmacist from New Bern, North Carolina. Pepsi was created in 1893 and was later renamed as Pepsi Cola in 1898. Pepsi contained the digestive enzymes pepsin and kola nuts used in manufacturing Pepsi. Bradham had thought about creating a drink for people that was delicious and would help in digestion and boost energy. PepsiCo Inc. is an American Multinational Corporation headquartered in New York. The company manufactures markets sells a range of salty sweet grain based snacks. It also produces carbonated non-carbonated beverages and other food products. PepsiCo has approximately 285,000 employees working in over 200 countries. Pepsi Cola Company began in 1898, but it only became known as PepsiCo when it merged with Frito Lays in 1965. Until 1997 it also owned KFC, Pizza Hut and Taco Bell. In 1998 2001 PepsiCo bought Tropicana Quaker Oats. In 2005 PepsiCo surpassed Coca-Cola Company in market value for the first time in 112 years since both companies began to compete. Over the years PepsiCo has become a global beverage, snack foods company. PepsiCo owns 5 different billion dollar brands such as Pepsi, Tropicana, Frito Lay, Quaker Oats Gatorade. PepsiCo also owns other brands such as Diet Pepsi, 7UP, Mirinda, Ruffles Potato Chips, Aquafina Bottled Water, Pepsi Max, Mountain Dew, etc. Indra Krishnamurthy Nooyi has been the chief executive of PepsiCo since 2006. PepsiCo delivered some solid financial performance in 2009, Its Net revenue grew by 5%, Core division operating profit grew by 6%, Core earnings per share grew by 6%, Management operating cash flow excluding certain items reached $5.6 billion up by 16%, Annual Dividend raised by 6%. PepsiCo estimated worldwide retail sales of $108 billion through all the products. In 2009 PepsiCos Net Revenue was $43,232 million, mixed net revenues of 37% from food products and 63% from beverages. Net Revenues generated according to operations in US and outside US are 52% in US and 48% outside US. Net Revenues generated through PepsiCo and its subsidiary companies are 48% by PepsiCo Americas Foods, 23% by PepsiCo Americas Beverages, 29% by PepsiCo International. 2.1 PepsiCos Strategies for driving growth Expand the Global Leadership Position of Snacks Business Ensure sustainable profitable growth in global beverages. Continue to deliver environmental sustainability goals and commitments. Cherish associates and develop the leadership to sustain growth. 2.2 PepsiCos Competitive Advantage Strengths PepsiCos competitive advantage lies in their talented, dedicated and hard working work-force, that work on its huge brands, innovating producing differentiated products, using excellent marketing methodologies. PepsiCo also uses cost saving initiatives in operations. All these factors help them to sustain a competitive advantage in the market. PepsiCos strength lies in its brand name recognized all over the world, huge range of food and beverage products, marketing style in different regions according to the place culture segmentation, and huge marketing budget. CAPITAL STRUCTURE The most fundamental question of corporate finance is how a firm should raise capital from investors. A firm must determine the type of security it will issue to the investors. Capital structure refers to the way a firm finances its assets through some combination of equity, debt, or other securities. There are different theories to determine the capital structure of the company. (3.1) Pecking Order Theory (developed by Stewart Myers, 1984) states that the firms have a preferred structure for financing; the factor with a high preference uses internal financing such as retained earnings before opting for any external financing. External financing uses debts, convertible securities, preferred stock common stock. So the firm first uses its retained earnings for operations or investments or expansions and then if required they can opt for external financial resources. (3.2) Trade-Off Theory states that the firms are financed partly with equity and partly with debt. Debt financing is preferred here due to the tax benefits of debt. Debt financing also bears bankruptcy and non-bankruptcy costs. Further according to the theory marginal cost of the debts increases as the debt increases and marginal benefits decline as the debt decreases. (3.3) Agency Cost Theory states that there are 3 different agency costs related to a firms capital structure, they are asset substitution, cash flow underinvestment. Asset Substitution states that as the debt to equity ratio increases the firm gets more freedom to invest in new projects, this leads to the decline in the value of the firm which results into wealth being transferred from debt holders to shareholders. Underinvestment problems occur when debt appears to be more risky, in this scenario of the firm the returns from the investment in projects will be directed towards the debt holders rather than the shareholders. This may lead to the firm declining to start any new projects, and there is a potential to increase the firms value. Free Cash Flow states that free cash flow is also a problem for the firm if the cash is not returned to the investors. Doing so will disrupt the value of the firm. (3.4) Modigliani-Miller Theory (developed by Merton Miller Franco Modigliani) states that it is assumed that there are no transaction costs, no taxes and there is a perfect market condition. They also stated that the value of a firm is determined by adding up all the debts and equity of the firm. This can be viewed through an example Firm A Firm B Debt value 0 2,500,000 Interest on debt 0 5% Expenses on debt 0 125,000 Share 1,000,000 500,000 Price per share 5 5 Market value of equity 5,000,000 2,500,000 From the above table we can see the market value of Firm A is 5million (only equity), Firm A is only financed by shares, therefore the value of Firm A is 5million. Market value of Firm B is 5million (equity + debt), 50% financed by shares and 50% by debt, but Firm B has to pay interest on the debts which is 5% of the debt value which is 125,000. Therefore the returns on equity for Firm B will be its earnings minus the value of interest on debts. Returns per share for Firm B will be returns on equity divided by earnings. If Firm B would have sold its stock at a premium rate then it could have made arbitrage profits. Modigliani Miller theory states that the value of a firm in a perfect market is not affected by the way the company is financed but it is affected through the sort of capital structure the firm utilizes. PEPSICOS NET DEBT RATIO Debt ratio that indicates the proportion of debt a company has relative to its assets. The measure gives an idea to the leverage of the company along with the potential  risks  the company faces in terms of its debts. If debt ratio is higher than 1 then the firm has more debt than assets, if debt ratio is less than 1 then the firm has more assets than debts. The formula for calculating debt ratio is, Debt Ratio = total debt / total assets. Debt Ratio helps to measure the risk a bank or financial institution will take if they are financing a firm. Net Debt is the measure of a firms overall debt by taking the net value of debts and cash. Net Debt is calculated as, Net Debt = (long term debt + short term debt) cash cash equivalents. According to PepsiCo, they measure net debt ratio on market-value basis where net debt equals total debt. PepsiCos Net Debt Ratio (L*) = (D + PVOL CMS) / (NP + D + PVOL CMS). D is the market value of total debt (long term debt plus short term debt), PVOL is the present value of operating leases, CMS is the cash marketable securities, N is the number of common shares, P is the common stock price. From the assignment referring to exhibit 2 exhibit 4, all values in millions dollars except for the common stock price, D = 9215, PVOL = 479 * 5 = 2395, CMS = 1498 and reduce it by 25% for remitting to US therefore CMS = 1123.5, N = 788, P = 55.875. L *= [(9215+2395) 1123.5] / [((788*55.875)+9215+2395) 1123.5] L* = 19.2 % (PepsiCos Net Debt Ratio is 19.2%). Now to analyze this we can ask some questions as how much debt really exists? If we consider exhibit 2 in the assignment there are other factors like accounts payable, short term debt other current liabilities which constitute of total current liabilities plus long term debt other liabilities, all this together shows that the total liabilities are 18,119million dollars, which is a bit high according to the market situation. That is why this shows the Moodys rating of PepsiCo is A1/A. PepsiCo will have to reduce their liabilities in order to gain a rating of Aa3/AA of Coca-Cola. What kind of debt is it, long term or short term? Firstly let us talk about short term debt, if we talk about short term debts then we can assume it can be included in current debts, so according to the balance sheet in exhibit 2, total current liability is 5230million dollars, while total long term liability is 12889million dollars, so the total long term debt is very high compared to total current liabilities. PepsiCo will have to reduce its long term debts more effectively in order to increase its ratings and also increase its assets. Can the company afford the debts if  it runs into financial trouble? Let us calculate the debt ratio as explained above in the beginning, Debt ratio = total debt / total assets (both values are in million dollars) = 18119 / 25432 = 0.71. If the debt ratio is less than 1 it means that the firm has more assets than debts. So PepsiCo can afford to be debt financed at a certain level. Looking at the current assets if the company runs into financial trouble then it can clear all its debts by selling off its assets. RATIO COMPARISON ANALYSIS Table of calculated ratios referring to values given in exhibit 5 in assignment, RATIOS PEPSICO CADBURY SCHWEPPES COCA COLA COCA COLA ENTERPRISES MCDONALDS INTEREST COVERAGE 4.565 4.896 16.911 1.444 7.379 FIXED CHARGE COVERAGE 3.094 4.287 16.911 1.406 3.588 LONG-TERM DEBT 0.165 0.090 0.011 0.517 0.112 TOTAL DEBT TO TOTAL ADJUSTED CAPITALIZATION 0.176 0.146 0.016 0.521 0.125 CASH FLOW TO LONG TERM DEBT 0.427 0.569 2.730 0.155 0.539 CASH FLOW TO TOTAL DEBT 0.395 0.330 1.839 0.153 0.474 Lets look at each ratio one by one in detail and analyze it. (5.1) Interest coverage ratio is used to calculate the firms ability to pay interest on the debts. If the ratio is low the firm has huge debt expenses. If the ratio is less than 1 then it means that the firm is unable to generate revenues to incur the interest expenses. Interest coverage ratio = earnings before interest and taxes (EBIT) / interest expense. According to the table above, we can see that interest coverage ratio of PepsiCo is 4.565 which is very higher than 1 and is considered as good. Comparing it with other companies in the table, we can see that Coco Cola has the highest ratio of 16.911 which is very impressive, but Coca Cola Enterprises has a ratio of 1.44 which is a caution alarm for its investors. To be on a safer side if the ratio is 1.5 or less then firms ability to meet its interest expenses can be questionable i.e. the is not able to generate sufficient returns to meet the interest expenses. (5.2) Fixed charge coverage ratio is used to calculate the firms ability to pay its fixed-charges such as rent and interest on debt without increasing the debts. If the ratio is less than 1 then the firm is not able to pay its fixed charges and vice versa. Fixed-charge coverage ratio = (EBIT  + fixed charges before tax) / (fixed charged before tax +  interest). According to the table above, we can see that PepsiCos fixed charge coverage ratio is 3.094 which is greater than 1. Comparing it with other companies in the table, Coca Cola has the highest ratio of 16.911 which is very impressive, but for Coca Cola Enterprises is 1.406 which is very less. PepsiCo should decrease its debts in order to reduce its fixed charges which will help to increase the value of the ratio. (5.3) Long term debt ratio is used to calculate the firms leverage. Higher the ratio, higher is the firms leverage. Firm with a high ratio is considered more risky for investors to invest because they have more liabilities than equity and vice versa. Long term debt ratio = long term debt / (long term debt + preferred stock + common stock). According to the table above, PepsiCos long term debt ratio is 0.165 which is less. Comparing to other companies in the table, Coca cola has a ratio of 0.011 which shows that it has more equity than liability, but Coca Cola Enterprises has a ratio of 0.517 which shows that it has almost 50% equity and 50% liability, so investing in Coca Cola Enterprises is more risky. (5.4) Total debt to total adjusted capitalisation ratio is used to calculate the firms leverage which includes long term and short term debts. Total debt to total adjusted capitalisation ratio = (long-term debt + short term debt) / [(long-term debt + short term debt) + preferred stock + common stock]. According to the table above, PepsiCos total debt to total adjusted capitalisation ratio is 0.176. Comparing to other companies in the table, Coca Cola has a ratio of 0.016 which shows it has more equity than liability, but Coco Cola Enterprises has a ratio of 0.521 which is again very risky. (5.5) Ratio of cash flow to long term debt is used to calculate the firms ability to generate cash in comparison with the long term debts. Ratio of cash flow to long term debt = cash flow / long term debt. According to the table above, PepsiCos ratio of cash flow to long term debt is 0.427 which is not good enough. Comparing it with other companies, Coca Colas ratio of cash flow to long term debt is 2.730, which is very impressive. PepsiCo has more long term debts than its annual cash flow while Coca Colas annual cash flow is 3 times the value of its long term debt. Firms with a high cash flow after interest and taxes are in a better position to distribute cash dividends. Firm with high cash flow can also use the cash to invest in other projects, buy assets, reduce debts etc. (5.6) Ratio of cash flow to total debt is used to calculate the firms ability to generate cash in comparison with its total debts. Ratio of cash flow to total debt = cash flow / total debt. According to the table above, PepsiCos ratio of cash flow to total debt is 0.395. Comparing it with other companies, Coca Colas ratio of cash flow to total debt is 1.839 which is very good. PepsiCos total debt is more than twice the value of its annual cash flow while Coca Colas annual cash flow is 2 times the value of its total debt. After considering all the ratios in the table, we can say that PepsiCo needs to reduce its debts by a huge margin and generate more cash so that it can use this cash to pay out more dividends to its investors, increase equity and reduce liability, invest in more products, buy assets, etc. Coca Cola is the largest competitor of PepsiCo, so PepsiCo needs to improve its equity in order to compete more effectively with Coca Cola. If company has less debts and liabilities people will invest more which will provide PepsiCo with a good rating as Coca Cola. PepsiCo can easily borrow money from the market for investments and also it can easily pay it back. Even in financial or economic crisis it will be the least affected company. Capital structure of PepsiCo has debt and equity. According to the net debt ratio we can say PepsiCo has about 20% 25% debt and 75% 80% equity. PEPSICOS RATING OBJECTIVE Ratings are given to companies depending on various factors such as its debt value, equity value, sources of finance, stock price, number of shares, profits, dividends, etc. Moody rated A as upper-medium grade, subject to low credit risk,  but that have elements present that suggest a susceptibility to impairment over the long term. PepsiCo has a rating of A1/A which places it in the upper medium grade category. A1 is the high quality rating given to PepsiCo, Aaa is the highest rating available. Coca Colas rating is Aa3/AA shows that it has much better ratings then PepsiCo. If PepsiCo wants to have a net debt ratio of 20% 25% then it will have to increase its debts and reduce equity, if this happens the Corporate Debt Rating of PepsiCo might fall to Baa which is lower medium grade. This will show a bad image of the company in the market, investors will find it risky to invest in PepsiCo. This means people will not buy shares of PepsiCo and it will not be able to raise funds through the issue of share to decrease its debts or to invest in the business. As a result of which they will have to borrow from the banks, Banks would also lend them funds to a certain limit where their assets are equal to liabilities, Banks would like to make sure that PepsiCo are able to pay back the funds with interest before lending them the funds. PepsiCo should reduce their net debt ratio to at least 15% instead of increasing it, due to this they will have more cash flow, reduced debts, can easily pay back dividends to investors, they can easily raise funds through issue of shares instead of borrowing from banks or other financial institutions. This will overall help PepsiCo to increase its ratings from A to Aa. CONCLUSION

Sickle Cell Anemia: A Curse and a Blessing :: Disease Health Sickness Essays Papers

Sickle Cell Anemia: A Curse and a Blessing Sickle Cell Anemia is a disease found right here in America, but in low levels compared to some areas of the world. The rate for this disease is around five times greater in certain places in Africa. That is because the potentially fatal disease Sickle Cell Anemia can also work as a sort of vaccination for another disease called malaria. First the mechanics of Sickle Cell Anemia will be discussed, then its possible benefits. Sickle Cell Anemia is an inherited condition. One gene for Sickle Cell Anemia must be inherited from each parent in order to have the disease. A person who receives a gene for Sickle Cell Anemia from one parent and a normal gene from the other has a condition called sickle cell trait. Sickle cell trait produces no symptoms or problems for most people. Sickle Cell Anemia can neither be contracted nor passed on to another person. The severity of sickle cell disease varies greatly. Some people with sickle cell disease lead lives that are nearly normal. Others are less fortunate, and can suffer from a variety of conditions. Sickle Cell Anemia is caused by a change in the chemical composition of the protein hemoglobin which is responsible for delivering oxygen throughout our bodies. Normal hemoglobin is found as a round shape, and is composed of four proteins – two alpha chains and two beta chains. The change that causes Sickle Cell Anemia occurs when an amino acid called valine is substituted for glutamic acid in both of the beta chains. This change in the composure of hemoglobin causes the shape to change when under certain conditions. Two of these conditions are low oxygen and dehydration. The hemoglobin of a person with Sickle Cell Anemia then becomes elongated and curved, hence the name sickle cell. When this happens many problems can occur, primarily blood clotting which leads to a lack of oxygen in body tissues. Other negative affects of Sickle Cell Anemia are a weakened heart because it is constantly overworked. Also, bone marrow is affected and bones become softer than usual. Whi le there is no cure for Sickle Cell Anemia there is treatment. The primary goal is to reduce the frequency of the Sickle Cell Anemia crisis episodes and maintain enough red blood cells to keep body tissues healthy. Sickle Cell Anemia: A Curse and a Blessing :: Disease Health Sickness Essays Papers Sickle Cell Anemia: A Curse and a Blessing Sickle Cell Anemia is a disease found right here in America, but in low levels compared to some areas of the world. The rate for this disease is around five times greater in certain places in Africa. That is because the potentially fatal disease Sickle Cell Anemia can also work as a sort of vaccination for another disease called malaria. First the mechanics of Sickle Cell Anemia will be discussed, then its possible benefits. Sickle Cell Anemia is an inherited condition. One gene for Sickle Cell Anemia must be inherited from each parent in order to have the disease. A person who receives a gene for Sickle Cell Anemia from one parent and a normal gene from the other has a condition called sickle cell trait. Sickle cell trait produces no symptoms or problems for most people. Sickle Cell Anemia can neither be contracted nor passed on to another person. The severity of sickle cell disease varies greatly. Some people with sickle cell disease lead lives that are nearly normal. Others are less fortunate, and can suffer from a variety of conditions. Sickle Cell Anemia is caused by a change in the chemical composition of the protein hemoglobin which is responsible for delivering oxygen throughout our bodies. Normal hemoglobin is found as a round shape, and is composed of four proteins – two alpha chains and two beta chains. The change that causes Sickle Cell Anemia occurs when an amino acid called valine is substituted for glutamic acid in both of the beta chains. This change in the composure of hemoglobin causes the shape to change when under certain conditions. Two of these conditions are low oxygen and dehydration. The hemoglobin of a person with Sickle Cell Anemia then becomes elongated and curved, hence the name sickle cell. When this happens many problems can occur, primarily blood clotting which leads to a lack of oxygen in body tissues. Other negative affects of Sickle Cell Anemia are a weakened heart because it is constantly overworked. Also, bone marrow is affected and bones become softer than usual. Whi le there is no cure for Sickle Cell Anemia there is treatment. The primary goal is to reduce the frequency of the Sickle Cell Anemia crisis episodes and maintain enough red blood cells to keep body tissues healthy.

Lyme Disease Essay -- essays research papers

Lyme Disease Introduction & Symptoms | Causes & Treatments | Recommended Web Sites Lyme disease is transmitted by tiny ticks of the Ixodidae family and afflicts about 10,000 people yearly. Initially identified in a group of children in Lyme, Conn., the disease has now been found in nearly all states and 18 other countries. About 90 percent of cases are reported in three areas: the northeast and mid-Atlantic states (Massachusetts to Maryland), the upper Midwest (Minnesota and Wisconsin), and the Far West (California and Oregon). The first sign is usually a bull's-eye rash that expands to several inches in diameter before disappearing after a few weeks. In some cases, the rash may take a different form or may be absent altogether. Other early symptoms — with or without the rash — are flu-like feelings of fatigue, headache, fever, sore throat, chills or body aches. You may also have vague pains in the joints, without swelling. In about half the patients who are not treated, this joint pain returns in about six months as painful arthritis with swelling, usually in one knee. In about 10 percent of these cases, Lyme arthritis becomes chronic. Some patients also experience a complex range of other symptoms, including stiff neck, headaches, sensitivity to light, memory loss, mood changes, chronic fatigue, recurring rashes, paralysis of one or both sides of the face, disruption of heart rhythm, and areas of tingling or numbness. Because...

Causes of Poverty in the United States Essay -- Poor Economy Education

Causes of Poverty in the United States The United States defines poverty for a family of four as being less than $16,036 per year, or $4,009 per person (Leone 12). People find themselves under this line for an innumerable amount of reasons. Some of these causes are under one's control and others are greater factors beyond an individual's power. Each family or individual person has unique and separate reasons for living in a state poverty. There is no way to try and define them all. Focusing in, three main topics arise that encompass the most predominant reasons for a person to fall into poverty. Education, family life and influence, along with the business cycle may work individually or together to cause poverty. These three leading causes are presented and discussed along with facts prevalent to the issue in the section below. Education and Poverty Education, or inadequate education or lack of an education, causes poverty. From the early years of preschool, into the years of K-12, without a college education and on into the work force people in poverty may never stop suffering from it if they do not become educated. The United States generally looks at education as a path to success but the people with the longest road towards success are not getting enough education. In the years before kindergarten, children form their basic thinking skills and children who don't learn these at home fall behind everyone else. In most cases children in poverty do not achieve these skills to the extent of middle-class children from their environment at home. When poor children enter school they are generally a year and a half behind the language abilities of their middle-class peers. Already children of poverty are behind in their ... ...ge & Family May 2002. Seccombe, Karen. "Famlies in Poverty in the 1990's: Trends, Causes, Consequences, and Lessons Learned." Journal of Marriage and Family Nov. 2000. Starr, Alexander. "The Importance of Teaching Tots; Given the strong evidence of its benefits to society, preschool education for the poor - and perhaps all children- is a must." Business Week 26 Aug. 2002. "Unemployment Rate of Persons 16 Years Old and Over, by Age, Sex, Race/Ethnicity, and Highest Degree Attained, 1996, 1997, and 1998" Digest of Education Statistics1999. National Center for Education Statistics March 2000. U.S. Census Bureau. Statistical Abstract of the United States. 2001 Weir, Margaret. "Race and Urban Poverty." Brookings Review Summer 1993. Yapa, Lakshman. "What causes Poverty? A post-modern view." Annals of the Association of American Geographers Dec. 1996. Causes of Poverty in the United States Essay -- Poor Economy Education Causes of Poverty in the United States The United States defines poverty for a family of four as being less than $16,036 per year, or $4,009 per person (Leone 12). People find themselves under this line for an innumerable amount of reasons. Some of these causes are under one's control and others are greater factors beyond an individual's power. Each family or individual person has unique and separate reasons for living in a state poverty. There is no way to try and define them all. Focusing in, three main topics arise that encompass the most predominant reasons for a person to fall into poverty. Education, family life and influence, along with the business cycle may work individually or together to cause poverty. These three leading causes are presented and discussed along with facts prevalent to the issue in the section below. Education and Poverty Education, or inadequate education or lack of an education, causes poverty. From the early years of preschool, into the years of K-12, without a college education and on into the work force people in poverty may never stop suffering from it if they do not become educated. The United States generally looks at education as a path to success but the people with the longest road towards success are not getting enough education. In the years before kindergarten, children form their basic thinking skills and children who don't learn these at home fall behind everyone else. In most cases children in poverty do not achieve these skills to the extent of middle-class children from their environment at home. When poor children enter school they are generally a year and a half behind the language abilities of their middle-class peers. Already children of poverty are behind in their ... ...ge & Family May 2002. Seccombe, Karen. "Famlies in Poverty in the 1990's: Trends, Causes, Consequences, and Lessons Learned." Journal of Marriage and Family Nov. 2000. Starr, Alexander. "The Importance of Teaching Tots; Given the strong evidence of its benefits to society, preschool education for the poor - and perhaps all children- is a must." Business Week 26 Aug. 2002. "Unemployment Rate of Persons 16 Years Old and Over, by Age, Sex, Race/Ethnicity, and Highest Degree Attained, 1996, 1997, and 1998" Digest of Education Statistics1999. National Center for Education Statistics March 2000. U.S. Census Bureau. Statistical Abstract of the United States. 2001 Weir, Margaret. "Race and Urban Poverty." Brookings Review Summer 1993. Yapa, Lakshman. "What causes Poverty? A post-modern view." Annals of the Association of American Geographers Dec. 1996.

Acknowledgement Paper Essay

First of all, we would like to thank our Almighty God for giving us the determination to complete this project and to improve ourselves in a situation that we never imagined that the developer can surpassed. The courage to make this work done with the strength, time and efforts that the proponents have. Second, we would like to express our deepest gratitude to Ms. Liz Manalansan, manager of Avon Muntinlupa. To Mr. Jandy and all staffs of the said company for giving enough information. In regard with this we would like to thank also Prof. Nino Del Monte, thesis adviser, for the continuous support, patience and motivation, and for unselfishly sharing his expertise from the initial to the final level of this academic endeavor, to the panelist for their encouragement , insightful comments, and intellectual guidance. To all my friends in PLMun and specially our section BSCS 4B for not letting anyone lose hope and giving each of us determination and encouragement.  With all efforts, time, and the knowledge the proponents put into, this just prove that â€Å"Everything is possible. Just believe†. To God Be the Glory!