Balance Sheet and Private Label Essay - 3287 Words

4021 REV: MARCH 1, 2010 ERIK STAFFORD JOEL L. HEILPRIN JEFFREY DEVOLDER Hansson Private Label, Inc.: Evaluating an Investment in Expansion Introduction On a frigid Sunday night in late February 2008, Tucker Hansson pored over a proposal developed by his firm’s manufacturing team. It called for investing $50 million to expand production capacity at Hansson Private Label (Hansson or HPL). For Hansson, a private company, this would be a significant investment. The company had not initiated a project of that magnitude for more than a decade, and the expansion wasn’t without significant risk. It would be likely to double HPL’s debt and to greatly increase customer concentration. This was a critical juncture for the firm Tucker†¦show more content†¦Hansson was seeking to capitalize on what he saw as the nascent but powerful trend of private label products’ increasing their share of consumer-products sales. Although the concentration of his wealth into a single investment was risky, Hansson believed he was paying significantly less than replacement costs for the assets—and he was confident that private label growth would continue unabated. Hansson’s assessment of private label growth prospects proved to be prescient, and his unrelenting focus on manufacturing efficiency, expense management, and customer service had turned HPL into a success. HPL now counted most of the major national and regional retailers as customers. Hansson had expanded conservatively, never adding significant capacity until he had clear enough visibility of the sales pipeline to ensure that any new facility would commence operations with at least 60% capacity utilization. He now had four plants, all operating at more than 90% of capacity. He had also maintained debt at a modest level to contain the risk of financial distress in the event that the company lost a big customer. HPL’s mission had remained the same: to be a leading provider of high-quality private label personal care products to America’s leading retailers. (See Exhibit 1, which presents HPL’s historical financialShow MoreRelatedFinancing Activities of Nordstrom and the Gap1385 Words   |  6 PagesCredit, with the Retail segment offering selections of private label and brand named apparel, cosmetics, shoes and accessories for men, women and children. It operates 242 department stores in 31 States, and competes directly with Macys, Bloomingdales, Dillard’s, Saks Fifth Ave and Neiman Marcus. Nordstrom operates its Credit Segment through a federal savings bank called Nordstrom fsb that supplies two Nordstrom VISA credit cards, a private label credit card and a debit card that all feature a loyaltyRead MoreWeek 6 : Working Capital Simulation Exercise1215 Words   |  5 Pageswill have a trickle down affect, improving the DSI (by decreasing cost of goods sold) and the firms EBIT margin by lowing costs overall. Phase 2 Phase two of the decision round consists of developing a private label product line. California’s Fountain of Youth Spas requested SNC to provide private label products for their spas. The spas are quite exquisite, offering SNC the opportunity to partner in on a revenue-boosting opportunity. â€Å"Overall sales would increase by 5% in 2016-and by a cumulative 4%Read MoreBSG Quiz 2 Essay14947 Words   |  60 Pagesthey can be asked in a variety of different ways. For some of the questions that can be conceptualized in different ways I have written a few notes that helped me figure out the answer when I encountered it in another form and it is usually those balance sheet questions because BSG is very particular (sometimes illogical) in how they calculate their values. If you find the odd quiz Answers that isn’t in the bank, please copy and paste it in an email and highlight it in red and send it to me. I hope youRead MoreBSG Quiz 2 Answers 2 Essay4788 Words   |  20 Pagesfrom Footwear Sales $ 300,000 Operating Proï ¬ t (Loss) 70,000 Net Proï ¬ t (Loss) $ 42,000 Balance Sheet Data Cash on Hand 10,000 Total Current Assets $ 70,000 Total Assets 270,000 Overdraft Loan Payable 5,000 1-Year Bank Loan Payable 10,000 Current Portion of Long-term Loans 17,000 Total Current Liabilities 48,000 Long-Term Bank Loans Outstanding 90,000 Shareholder Equity: Year 11 Balance Year 12 Change Common Stock 10,000 0 10,000 Additional Capital 120,000 0 120,000 Read MoreBbt Case Study685 Words   |  3 Pagescopyright Copyright is a legal right concerning intellectual property, such as advertisements, label, graphic design, articles, letters, etc. that gives the monopoly of using it and in this way it protects the producer or the producing company against duplication from its rivals. ii. Identify two disadvantages for BBT of operating as a private limited company. A disadvantage for BBT of operating as a private limited company is that it has not as many finance raising options and it can’t raise asRead MoreIntroduction Of Sunflower Nutraceuticals ( Snc ) Is A Miami, Florida Based Distributor That Offers Dietary Supplements1239 Words   |  5 Pagesare offered through an SNC Website and Catalog (Harvard Business Publishing, 2014). SNC offers more than 50 third party brands referred to as their stock keeping units (SKUs). Since their initial launch in the year 2006, they have developed a private label brand for sports drinks, metabolism-boosting power as well as a vitamin line for teenage girls (Harvard Business Publishing, 2014). After reviewing the Working Capital Simulation, I have summarized the various phases, examined why SNC made severalRead MoreThe Burst Of The Housing Bubble Essay976 Words   |  4 Pages2004, led to a huge decline in value of securities that tied to U.S. real estate pricing. The effect caused massive damage to financial institution globally. These three factors including price appreciation in housing market, high growth of the private-label residential mortgage-backed security in the main fuel for the extensive growth of the mortgage market beginning in 2000. This section describes the fundamental factors, which are credit risk, liquidity risk, market risk, and operational risk,Read MoreKrispy Kreme Doughnuts, Inc. Essay1210 Words   |  5 Pagesrelying on on-premises sales where the customer could watch the doughnut be made to factory stores shipping pre-cooked doughnuts to franchises for them to reheat and sell. Off-premises sales to grocery stores, domestic retail locations, an d as private label also accounted for KKD’s revenues. KKD charged high fees for equipment and ingredients to their franchises in order to gain a higher profit and to promote growth. The reacquisition of franchises led to the accounting problem highly stating intangiblesRead MoreBsg quiz 2 full part Essay4131 Words   |  17 PagesHelp screens for the Private Label Sales Report and the Marketing and Admin Report, which one of the following is included as part of a companys cost in supplying private-label footwear to chain retailers? A proportionate share of corporate administrative expenses A proportionate share of companywide costs for celebrity endorsement contracts A proportionate share of plant supervision costs, plant maintenance, and plant depreciation in those plants where private-label pairs are producedRead MoreSteve Madden, Ltd.2234 Words   |  9 Pagesincorporated on Nov. 10, 1998, The company and its subsidiaries create, source, market and sell both name brand and private label footwear for women, men and children. There are 5 segments through which the company operates. These segments are wholesale Footwear, retail, wholesale accessories, licensing, and first cost. The company also creates, sources, markets and sells both name brand and private label handbags and accessories. In addition, it licenses many of its trademarks to be used in the manufacturing