Business, the Economy, and World Affairs
Business, the Economy, and World Affairs BUS 1301
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This 9 page Class Notes was uploaded by Mr. Ozzie Morar on Saturday October 3, 2015. The Class Notes belongs to BUS 1301 at Baylor University taught by Blaine McCormick in Fall. Since its upload, it has received 55 views. For similar materials see /class/217948/bus-1301-baylor-university in Business at Baylor University.
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Date Created: 10/03/15
Exam 2 Face Time Facetime Major Jason M Kahne US Army 0 International I quot to Support Militarv Onerations 0 Experience in army for 11 years 0 Platoon Leader Executive Officer 9800 I Line haul transportation company in Europe 0 Theater Movement Control Center 0002 I Oversight of all military surface cargo in Germany 0 lst Cavalry Division Transportation 0305 in US I Movement of 1st Cavalry Division tofrom Iraq 0 Forward Support Company Commander 0507 I Logistics Support for a Infantry Armor Task Force 0 Brigade Logistics Office 0708 I Logistics Support for a Brigade Combat Team 0 C 39J quot for International I quot 0 History 0 Diplomatic Clearance Processes I Permission granted by a country for the movement of passengers cargo andor equipment through it for a speci c mission and during a speci c time period I Major Players include US EmbassyDAO Ministry of Interior Ministry of Defense Ministry of Transport and local tra ic and customs authorities I Time periods vary from 235 days 0 Political Constraints I Political Climate 0 Ex Serbia and Belarus I Theater Engagement 0 Infrastructure Investments I Sovereignty Issues 0 Transport of weapons systems with ammo 0 Switzerland Neutrality No weapons systems 0 Austrian Neutrality Polizei escorts 0 Italian Coordination Carabiniere Escorts 0 Infrastructure Constraints I Surface vs Air 0 90 by surface 10 by air I Rail Gauges o US 4 8 12 0 Russian 5 o Iberian 5 5 23 I Rail Infrastructure I Seaport Infrastructure 0 Deep Water Portsgt 36 Facetime Tim Bourceir Gerdau Ameristeel 0 Bus 1301 Business Economv and World Affairs 0 Introduction 0 Tim Bourceir Vice President Regional Manager I Operational responsibility for four mills located in TN FL and TX I Totally 25 million tons production 39 1468 billion in revenues I 1286 employees Married with three sons Oldest son Jared is a sophomore at Baylor BS Metallurgical Engineering from Michigan Technological University1983 Inland Steel Company 1983 to 1987 Project Engineer and various frontline Supervision roles Integrated Steel Production 0 North Star Steel Company 1987 to 2001 Frontline Supervision Department 0000 Superintendent and Plant Manager Mini Mill 0 Chaparral Steel Company 2001 to 2007 Vice President of Operations 0 Gerdau Ameristeel 2007 to present Vice President Regional Manager Acquired o Gerdau Ameristeel Snapshot NYSEGNA1 0 Leading mini mill steel producer and second largest recycler in North America 0 Finished steel capacity of approximately 12 million tons 0 One of the strongest 5 year revenue growth in the industry32 CAGR o EBITDA margin in top quartile of peers o Broad geographic reach and product diversification o Diverse product mix serving the attractive infrastructure segment 0 432 million shares outstanding 66 owned by Gerdau SA 0 Driving North America growth within the Gerdau Group 0 Contribution of 100 years of global steel experience 0 Largest long steel products producer in the Americas with 26 million tons of crude steel capacity 0 Efficient Vertical Integration 0 Scrap Recycling I 35M tons O O I 23 scrap operations I 40 captive supply Mini Mills I 12M tons I 19 Mills I Broad Product Range I Variable Cost Advantage Downstream I 22M tons I 66 locations I Less Capital Intensive I Stable Margins De ned Strategic Priorities to Drive Future Growth 0 O 0 Business growth I Extend end use markets and product range I Downstream value added I Upsteam raw material supply Costumer Orientation I Be the supplier of choice I Improve customer relationship I Develop brand recognition Sustainability I Safety and environmental commitment I Operational ef ciencycost competitiveness I People developmentcommunity GNA Diverse Product Mix 0 O O O O 0 Merchant 26 Rebar 19 Fabricated Rebar 13 Structural 28 Flat rolled 8 Wire Rod 7 Customer Orientation Supplier of Choice Broad product range and geographic reach One Stop Shop Costumer intimacy and knowledge Vertically integrated full service Innovation Highlights 0 Sound Industry Fundamentals I Consolidating industry I Longterm growth story 0 Leading Market Position I 2 largest long steel product producer in North America I Broad product range and geographic reach Vertically Integrated Operations I Large cost ef cient mini mill network 0 I Strategic valueadded scrap and downstream segments 0 Operational Improvement Potential I Best practices GAP improvement I Acquisition synergy realization Successful Acquisition Growth Strategy Excellent track record of integrating past acquisitions Corporate Goverance Best Practices I Independent Board Committees I Chairman and CEO of ces not held by same person 0 Sustainability Highlights of Our Progress 0 Environmental impacts eliminated Steel recycles more by weight than all other recycling activities combined Repeatedly recyclable Nature resources are conserved O O O 60 less energy than integrated steelmaking process 0 Greenhouse gas emissions are minimized Facetime Ryan O Donnell and Matthew Jennings EampY Fraud Investigation Ernst and Young 0 Fraud I quot quot and Dispute Services 0 EampY s Core Forensic T 39 39 Services 0 Forensic collection of source data Deleted le recovery Processing and deduplication Flexible key word and meta data searching Hosting of responsive documents for review Export of selected documents 0 Some of the things we do in FIDS 0 Internal investigations I FCPA I Asset Misappropriation 00000 I Management Fraud O I Interviewing Shadow Investigations Audits Facetime Carl Grelle Manager Joseph A Banks Facetime Ed Fikse BBA 74 Accenture High performance Delivered Facetime Kevin J Koch CFO McLane Company 0 Why we play the game 0 0 Free Cash Flow Warren Buffet Loves Free Cash Flow 0 Financial Magicians Cheaters 0 000000 0 Jeffrey K Skilling CEO Richard Causey CAO Andrew S Fastow CFO Daniel Boyle VP Global Finance Scott D Sullivan CFO Buford Yates Accounting Director Bernard Ebbers CEO Richard Scrusay CEO 0 Offending Companies 0 O O O Enron Worldcom HealthSouth Corporation Tyco 0 Financial Ratios amp Computations O IRR NPV PV ROS ROA ROE Current Ratio Quick Ratio 0 Free Cash Flow Formula 0 Cash From Operating Activities Dividends Capital Expenditures Free Cash Flow 0 Alternative Formula 0 Operating Activities 7 Capital Expenditures Free Cash Flow 0 Cash Flow Notes of Caution 0 OOO Stretching out payables Financing accounts payables Securitizing accounts receivables One time gains Tax benefit of stock options APB25 Facetime Bob Pruitt BBA 87 CalTex protective coatings inc o CalTex Protective Coatings Inc 0 O O 0 National Manufacturer of Automotive Products since 1983 Distribute Sealant amp Detail Products to Auto Dealers Private Label Provider to Several Large Concerns 87 Employee Owned 0 Our Core Purpose 0 I Dedicated to create amp promote emotional professional and spiritual growth within our people and customers To experience life free of insecurities and limitations in order to discover our individual and collective life purpose Our Core Values I Our Core Value Statements express the ideals spirit and nature of our company guiding us in our mission I We expect every member of CalTex to pursue practice and strengthen each ideology I These ideologies should be considered equally practiced consistently and never in con ict with one another Compassion I Respecting the thoughts feelings and experiences of others and responding in relationship Humility I Approaching life knowing you don t have all the answers realizing you need to be in relationship with others Integrity I Being in relationship through honest intentions thoughts and conduct Teamwork I Working in Relationship To get it done 0 CalTex Protective Coatings Inc 0 0 Received from the National Gathering of Games The Greatest Games of Business 2008 AllStar Finalist Award Compliance Commitment Partnership C02 Since 2005 I We care about our environment 0 Customized Marketing Material 0 OOO Customized Brochures Customized Placemats Customized Posters Reasons to Protect Foundation Literacy Part 2 Fixed Assets Generate wealth for the long run Thus property rights and capital ism Current Assets Manage uncertainty in the short run That s why it s called quotworking capital Examples Cash Accounts Receivable Inventory Working Capital Anayst Report getting 100 points 1 Current Ratio is greater than 20 50 points Current Ratio Current Assets Current Liabilities 2Days of Working Capital Greater than 30 but less than 90 3 Lose all points if you get an Eloan 4 Develop your three good forecasts Worst Average and Best 5 Avoid an Eloan or you lose all 100 points Days of Working Capital Found in gt Proformas gt Ratios Shows how many days you can pay your bills without a profit Current Ratio Found in gt proformas Balance Sheet Formula Current Assets Current Liabilities You want twice as many current assets as liabilities Return on Sales ROS Found in gt proformas financial ratios ROS ProfitSales R05 is a measure of profitability It tells you what percentage of each sales dollar is profit Low ROS in 6 firms means industry rivalry Early round targets 28 Late round targets 515 Asset Turnover SalesAssets Found in gt proformas financial ratios A measure of utilization not profits or wealth How hard is the company working its assets to produce sales Asset Turnover of 195 means that the firm is generating 195 in sales for every 100 of assets An Asset Turnover of 20 is solid Return on Assets Found in gt proformas financial ratios Formula ROA ProfitAssets ROS x Asset Turnover Margins x Utilization How hard is the company working its assets to produce a profit To improve ROA improve margins utilization or both Leverage AssetsEquity Found in gt proformas financial ratios Formula assets equity Basically examines the financial structure of the company Known as llequity multiplier in FIN 3310 Proper use of debt multiplies returns for equity holders Return on Equity Found in gt proformas financial ratios ROE ProfitEquity ROALeverage What rate of return are investors seeing on the money they put into the company The only difference between ROA and ROE is leverage or financial structure The DuPont Chain of Ratios ROS X Asset Turnover ROA X Leverage ROE Market Capitalization Found in gt Fast track gt Stock and Bonds Market Formula Market Cap Stock Price X Shares Outstanding Reflects the value the stock market places on the firm Yield Found in gt proformas financial ratios Formula Yield DividendStock Price What percentage of the stock price will the company return to you in dividends A quick way to compare stocks to other interest bearing investment options Book Value Formula Book ValueEquityShares Outstanding How much ofmy stock value would Icapture if thefirm were liquidated How much value does management add in the view of investors MarketBook Ratio Formula Stock PriceBook Value Found in gt proformas financial ratios Earnings per Share Found in gt fast track gt stock and bond market EPS ProfitShares Outstanding Book value sets the baseline for stock evaluation EPS determines the upper limit A good dividend policy can push your stock price a bit higher PriceEarnings Ratio Formula E Stock PriceEPS Answers the question quotHow do investors value the stock relative to earnings Higher PE good track record good forecast Lower PE poor track record poor forecast A PE of 10 30 stock price 3 EPS means that the market is willing to pay 10 times this year s profit per share for the stock How the Bond Market Works Primary Market 0 Where debt is issued I Series and face Secondary Market 0 Where debt is traded I Yield Close and S and P Sales Variable Costs Contribution Margin Period Costs Net Margin or EBIT nterests Taxes and Other Pro ts Automation is still the best path to lowering variable costs however some teams can easily lower their MTBF material cost Lowering period costs Adjust your Sales and Promo budgets per the manual Lower your interest payments by reducing long term debt Wealth Creation 33 Cumulative Profit 33 Cumulative Free Cash Flow o If you need more change ARAP policy Collect receivables at 28 days Disburse payables at 32 days If you need more stop buying so many assets Increase sales with current asset base 0 Keep sales flat with reduced asset base 33 Market Capitalization 0 Wise dividend policy increases market cap I Never pay more than your Earnings Per Share I Pay same dividend or more in Rounds 6 7 and 8 You ll find ARAP on your Marketing decision screen 0 O O O
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