Solved Business Law Assignment_Most Useful-1

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A club or a society is an association of persons.

A company is a subsidiary company if the holding company controls the majority composition of its board of directors.

A Company is an artificial person and has a legal entity.

A Company subject to the provisions of section 32 of the companies act as unlimited may register under this Act as a Limited company.

A firm is a name given to the partners collectively.

A meeting is an assembly of a number of persons for transacting a lawful business having certain purpose or purposes.

A post-dated is a Cheque drawn with a future date.

A proposal comes to an end by its rejection .

A sale can only be in the case of future Or generic goods.

A sleeping partner is like an undisclosed principal.

A,B,C, and D are partners, A retires and B dies, the partnership between them comes to an end .

Agents are authorised to act within the scope of the authority given.

An agent is simply a connecting link between his principal and the third party.

An agreement of agency must make clear the intention of a person to act on behalf of another person.

An offer must create Legal relationship.

An Order of the Court asking a person to do or to refrain from doing a particular act, which is the subject matter of the contract, is known as Injunction.

Any person claiming himself as a consumer must prove that the services must have been rendered to him.

Articles are subordinate to and controlled by the memorandum.

As per S.2(1) (f) of the Consumer Protection Act, defect means any shortcoming in the quality of goods.

As per Sec. 2 (1) (O) of the Consumer Protection Act, service does not include rendering of any service under a contract of personal service.

Coercion implies committing or threatening to commit any act forbidden by the Indian Penal Code.

Defect is any fault, imperfection or shortcoming in quantity, quality, purity or standard to be maintained by or under any law for the time being in force under any contract express or implied.
Every promise and every set of promises, forming the consideration for each other, is an agreement.

Holding out means falsely leading another person to believe in something.

If any consideration is present while forming the agency then the relationship of agency becomes contractual.

In order to become a holder, a person must possess the instrument under some lawful title.

In the right of lien, the possession is retained by Unpaid seller.

Issued capital can be defined as the nominal value of shares which are offered to the public for subscription.

Karta of Joint-Hindu family is representative of his family.

Members of a club or a society are the friends of each other.

Notice of dissolution of firm must be explicit.

Partnership is based on Faith .
Past consideration is one which is wholly suffered by the promisee even before making of the agreement.

Poll is the capitalistic method of voting with the rule "one share one vote "

Prospectus is an invitation made to the public .

Quorum is the minimum number of members to be present at the meetings to conduct the business of the meeting as required by law.

Ratification is one of the ways of creating agency.

Reserved capital is the part of uncalled capital which can only be called up at the time of & for the purpose of winding up the company.

Special resolution and confirmation by Company Law Board is required for alteration of Memorandum.

The act done by the agent with the permission and on behalf of the principal is binding on the principal.

The agency can be terminated at any time by mutual agreement between the principal and his agent.

The Articles of Association controls internal operations of the company.

The company does not possess fundamental rights, stll it is a person in the eyes of law.

The confirmation of change of registered office of company within a state shall be communicated to the company within Four weeks from the date of receipt of such application.
The Consumer Protection Act of 1986 is basically passed to protect the interest of the consumer.

The directors of a company have to file their consent with the registrar to act as director.

The essential point about an agent's position is his authority of making his principal answerable to third parties.

The Indian Contract Act, 1872, does not cover all those duties which are not Contractual in nature.

The object of the Consumer Protection Act of 1986 is to educate the people so that they can find out legal remedies for their grievances.

The partners continue to be liable as such to _______________for any act done by them.

The person who buys the goods for trading purposes is not a Consumer under the Consumer Protection Act, 1986.

The property in the Negotiable Instrument passes from one person to another person by Mere/ Simple delivery.

The registration fo partnership firm is not compulsory .

There are certain relations, which are not created by contracts but are upheld by law, which are known as Quasi contracts.

There should be a Definite and real necessity for creating an agency.

Un-called capital is the part of issued and subscribed capital which has not been called up.

Under undue influence the dominant party may hold a real authority over the other party.

Unfair Trade Practice is a trade practice which for the purpose of promoting a sale, use or supply of any goods or for the provision of any service adopts any deceptive practice.
Unfair trade practice includes a representation made to public in a form that purports to be a warranty of a product.

Unpaid seller's Right to stop the goods in transit arises only when the buyer is Bankrupt.

When the endorsement of a bill is ‘for collection only’ the endorsee cannot be a holder.

When the notice of stoppage in transit is given by the seller to the Carrier in possession of goods, the latter must re-deliver the goods to the seller.

When the performance of contract becomes impossible, such contract need not be performed

When the person to whom the proposal is made Signifies his assent thereto, the proposal is said to be Accepted.

Where a conditional promise is made to pay either cash or money’s worth for an uncertain event, it is known as Wagering contract.

True/False

"I promise to pay Mr.John Rs.500/- seven days after my marriage with Miss Lucy" is a promissory note. False

A banker is a mercantile agent. False
A Bill of Exchange can be crossed. False
A Cheque can be bearer, Order or crossed. True
A cheque is a bill of exchange. True

A commission agent is generally appointed for selling and buying goods on behalf of his principal. True

A company can become a partner or can enter into a partnership agreement. False

A contract of sale of goods is a contract whereby the seller transfers or agrees to transfer the property in goods to the buyer for a price. True
A minor may draw, endorse, deliver and negotiate a negotiable instrument to bind other parties except himself. True

A Promissory Note contains conditional undertaking to pay a certain sum of money. False

A sale is an executed contract whereas an agreement to sell is an executory contract. True

A trader is a middleman bringing the buyer and seller together and receiving any commission for services rendered by him. False

Agents acting jointly and severally are known as co-agents. True

Agreement is defined as a contract at its inception. True

All contracts are agreements and all agreements are contracts. False

Alteration of memorandum of articles etc to be noted in every copy. True

An agency can be terminated after lapse of time or completion of the work. True

An agent does not have the right to enter into contracts with third parties. False

An agreement enforceable by law is a contract. True
An agreement should be certain and unambiguous. True

An agreement to sell takes place in the case of existing goods or specific goods. False

An auctioneer has full authority to sell the goods of his principal by private contracts. False

An insolvent person can accept or endorse a bill. False

An unpaid seller has a right against the goods but does not have any personal right against the buyer. FALSE

Any user of goods with the approval of the person who has purchased the goods for consideration is also a consumer. True

Bill of Exchange need not be stamped property. True
Company can be termed as a Body Corporate. True
Company is treated as a legal person distinct from its members. True

Consideration can not be a past consideration. False
Consumer is a person who procures service under a contract of personal service. False

Copies of memorandum and articles shall not be given to members. False

Directors are allowed to borrow from the public companies. True/False

Directors of a private company need to file their consent with the registrar to act as director or sign an undertaking. False

English Law does not recognize Formal Contract. False

Even if all the members of a company are citizens of India, the company does not become a citizen of India. True

Existing goods are those goods, which are owned and possessed by the seller at the time of sale.True

If all the members of a company are married, the company would not be a married person. True

If one of the parties to the contract dies the contract becomes void. False

In case of Bill of Exchange, the notice of dishonour is essential. True

In case the object of an agency becomes unlawful, the agency cannot be terminated. False

Loss of profits is an example of liquidated damages. False

Memorandum of a company is a primary and supreme document of the company. True

Mental acceptance amounts to an acceptance. False
Money order, Postal order, Share Certificates, Deposit receipts and such other documents are Negotiable Instruments. False

No consideration is required in formal contracts. True
Partners can decide their rights and liabilities in the partnership deed. True

Partnership is nothing but a psychological relationship existing between the partners. False

Persons who have entered into partnership with one another are called individually partners and they are collectively "a firm". True

Railway or S.T. Receipts, Dividend, Warrants, Railway Bonds are not Negotiable Instrument. False

Section 10 of the Indian Contract Act, 1872 applies to contract of sale. True

Sections 1 to 75 of the Indian Contract Act, 1872 provides for the special contracts. False

Services rendered by the Post and Telephone Department are covered by the Consumer Protection Act, 1986. True

Special agent and Particular agent mean one and the same thing. True

Special Notice and Special Resolution mean one and the same. False

Specific goods are those which are identified and agreed upon at the time of a contract of sale is made. True

Stock is a synonym used for Shares. False
Subsidiary company can hold shares and can acquire membership of the holding company. False

The Central Government may, by license direct the association to be registered which is formed as a limited company for promoting commerce, art etc. True

The company cannot exceed the powers conferred on it by its memorandum. True

The company law board confirms the change of registered office of the company within a state.False

The company law board may, at any time, by order, extend the time for the filing of documents. True

The estate of a deceased partner or the legal representatives of a deceased partner cannot be held liable for any act of the firm. True

The law relating to sale of immovable goods is contained in the Sale of Goods Act, 1930. False

The membership of the association of company shall cease on the dissolution of the firm. True

The partners need not sign the partnership deed. False

The principal can ratify unauthorised act of an agent. False

The provisions of sale of goods were previously included in the Indian Contract Act, 1872. True

The relation between a doctor and his patient is not fiduciary in nature. False

The social or the domestic contracts are excluded from the purview of the Indian Contract Act, 1872. TRUE

The subscriber of the memorandum of a company on its registration shall be entered in its register of members as member. True

There are two types or kinds of capital of a company, i.e. owned capital and borrowed capital. True

Unenforceable agreements and illegal agreements mean one and the same thing. False

Multiple Choice Single Answer

A breach of a condition may be treated as breach of-Warranty

A cheque is dishonoured by :-Non payment only

A company can sue and also be sued by-In its corporate name

A company which has a control over a subsidiary company is a –holding company.

A Company, when registered with limited liability under the Companies Act 1956, shall be deemed to be a company-Limited by shares

A condition may be reduced to where goods are accepted by the buyer.

A consumer has right to be assured, wherever possible, access to services at-competitive prices

A cooler was purchased not for his own use, but it was installed at a bus-stand for the use of public free of charge. it was held that the purchaser was a consumer because :-There was no commercial purpose

A factor is a type of-Mercantile Agent

A legal representative being holder of Negotiable Instrument can sue-after the death of the holder

A partner who invests capital & share profits but do not take active part in firm's business is-a dormant or sleeping partner

A private company can be registered with a paid-up capital of Rs. :-One lakh

A proposes by a letter sent by post to sell a house to B at certain price, B accepts A's proposal - The communication of the acceptance is complete as against B.-when letter is received by A

A public company doesn't have its own articles of association, it may adopt-Table A as given in schedule-1.

A stipulation in a contract of sale with reference to goods which are subject there of may be- A condition or warranty

Acceptance should be made in-The manner prescribed by the promisor and if not prescribed in any reasonable manner

According to the Consumer Protection Act of 1986, goods means as defined under-Sale of Goods Act, 1930

Agency can be created by-Operation of law

An agency is based upon consent and hence, it is a-consensual relations

An agent was instructed by his principal to insure the goods, but he neglected to insure the goods. As a result, the principal had to suffer the loss. Who is responsible for the loss ?agent

An agreement can become a contract if it is-enforceable by law

An agreement with a minor is not voidable but –void ab initio.

An example of implied agency is-Agency by Holding-out

Applicability of the Negotiable Instruments Act 1881- applies and extends to the whole of India

Company based on ownership is –public company.

Consideration or object of an agreement is lawful unless it is-forbidden by law

Consumer is a person obtaining goods for consumption.

Dissolution by the order of the Court at the suit of a partner on certain grounds, which include-Willful or persistent breach of agreement by a partner

Dissolution by voluntary act of the partners, which includes-dissolution by agreement

During the war, all the members of a private company were killed while they were in general meeting in a bomb attack. The questions is whether the company will :-Survive

Enforcement of contingent contract depends on-Happening or Non-happening of the event

Every company must have-A Specific name

Following is an implied condition-Condition as to sale by sample

For obtaining recognition as an 'Appropriate Laboratory", the applicant shall send an application in the proforma prescribed by the :-Bureau of Indian Standard

For the existence of a partnership there must be an association of-Two or more persons

For the formation of the contract of sale of goods, there should be- two parties

Goods identified at the time contract of sale are known as-Ascertained goods

If any member of the Central Council wants to resign from the Central Council, he may do so by a letter addressed to the :-Chairman

If there is breach of a condition, the aggrieved party gets a right to-repudiate the contract

Illusory consideration can also be called as-deceptive

In a private company shares can-be but with restrictions transferred

In a sale, if the buyer becomes insolvent before he pays the price of the goods purchased, the person who can claim the delivery of the goods as the property in goods has been already transferred as a-official assignee or receiver

In an agreement to sell the seller is responsible for all the risk of loss as he is the-Owner

In an appeal to the National Commission the appellant shall submit-Six copies of memorandum

In case of a public limited company, the maximum number has no limit, but the minimum is fixed at-7

In contract of sale the buyer becomes-Absolute owner of the property

In contract of sale-ownership in the property is passed from the seller to the buyer.

In order to convert a proposal into a promise the acceptance must be-absolute and unqualified

In the Bill of Exchange, the person to whom the bill is made payable is called as –payee.

In the Bill of Exchange, the person who is ordered to pay is called as :-Drawee

In the right of lien, the possession is retained by-Unpaid seller.

Memorandum of a public company must be signed by-Seven persons

Mr. Dang and Mr. Thomas work together. Mr. Dang receives all the profits earned and pays Mr. Thomas certain amount for his work as wages. whether Mr. Dang and Mr. Thomas are-Master and Servant

Mr. Manik appoints Mr. Naveen as his agent to sell the goods at Rs.10,000/- on his behalf. Mr. Naveen sells the goods for Rs.12,000/- who is liable to account for it to-Mr. Naveen

Mr. Red and Mr. White register their company as a private company with a share capital of Rs. 7, 00,000/- divided into 70,000 shares of Rs.10/- each. Mr. White holds 69,999 shares while Mr. Red holds only 1 share. This is a :-One man company

Non-registration of a partnership firm does not make the partnership agreement –void.

One man company is generally a-private company

One of the characteristics of Company is that it is-an artificial person

Quasi Contract rests on the ground of :-Equity

Sale is a contract plus-conveyance

Sale is a contract plus-executed contract

The altered memorandum must be filed within-three months of the company law boards order

The capacity to contract with an agent is the part of the law of-statute

The goods that are identified and agreed upon at the time of a contract of sale is made- specific goods

The holder of a negotiable instrument has a right to sue for recovery.

The intention of the Negotiable Instrument Act is to govern-legal relationship

The meaning of the term “Caveat Emptor” is-let the buyer beware

The members of the district forum shall not be less than thirty five years of age.

The monetary jurisdiction is based upon the :-Amount of relief claimed by the complainant

The National Commission has the power to entertain appeals against the orders of any –State Commission.

The National Commission shall decide the complaint as far as possible within a period of-three months from the date of notice received by the opposite party

The object of carrying on a business must be :-Sharing of profits.

The ownership capital of the company is divided into a number of-Shares

The parties of the contract should be major in age according to the law to which they are subject.

The rights & liabilities of an expelled partner-are exactly same as that of a retiring partner

The term of central protection council is-three years

The unpaid seller has a-right against the buyer

The unpaid seller has a-right against the goods

The vacancies arising from resignation of the members of the Central Council shall be filled from the same category by the-Central Government

Under a contract of sale goods have to be exchanged for-Money

Unless there is any agreement to the contrary, on the insolvency of any of the partners of the partnership firm, the firm-is automatically dissolved

Waiver-Deliberate abandonment of a rights by the parties to the contract

When an agent has the authority to do all acts connected with the business or trade of his principal, he is known as-a general agent

When an endorser increases his own liability under the instrument by express words, the endorsement is said to be facultative.

When an offer is made to world-at-large, the contract is-made with the person who signs or performs the terms and conditions of the offer.

When the property in goods is transferred from the seller to the buyer at once, the contract is called a sale.

Where a contract of sale is subject to any condition to be fulfilled by the seller, the buyer may-Waive the condition

Where the partners agree to carry on the business for a definite period of time, the partnership is said to be –for a fixed period.

Where the property in goods sold has been passed, the unpaid seller has the-right to stop goods in transit

Where the transfer of property in the goods is to take place at a future time it is called-Agreement to sell

Which authority of an agent can be inferred from the circumstances of the case ?-implied

Case Study CreditQuest-Improves Accuracy and Efficiency

CreditQuest
Improves Accuracy and Efficiency at
®
Baker Boyer National Bank
lending process,” said Gerianne Graham, Vice President of
Lending Operations for Baker Boyer National Bank. “We
wanted a system that all branches could access and a
Baker Boyer National Bank is Washington state’s oldest
system that would securely hold all customer credit data
independent bank. Founded in 1869 and headquartered
and supply the tools our branches needed for streamlined
in Walla Walla, Washington, Baker Boyer National Bank
lending processes.”
is still family owned and operated and takes great pride
Baker Boyer National Bank chose Harland Financial
in their strong community ties. With nine branches and
Solutions’ CreditQuest, a complete, end-to-end commercial
more than $380 million in assets, Baker Boyer National
credit management system. The solution brings origination,
Bank continues to grow and improve their business
financial analysis, portfolio risk management, underwriting,
processes in order to better serve their clients.
documentation and executive reporting together for a
Reduced Inconsistencies in Credit Analysis
unified, relationship-centric view of the customer’s
financial data and supporting documents.
Recognizing they needed to review their business
processes, the management team at Baker Boyer
“We have received rave reviews
National Bank hired a consultant to assess their entire
business process. They learned that the bank had
from our examiners on our new
inefficiencies in their commercial lending process.
credit management process.”
There were inconsistencies in credit analysis and in the
documents used. In addition, commercial credit information
Gerianne Graham
was kept on individuals’ computers, not in a centralized
Vice President – Lending
system where it could be better protected and shared
Baker Boyer National Bank
among authorized stakeholders. The consultant
recommended that they invest in a credit management
system and after much research, recommended
Bank Examinations Are Completed More
CreditQuest
as a system that would fit Baker Boyer
®
Quickly and Easily
National Bank’s needs.
Since implementing CreditQuest, Baker Boyer Bank’s
A Complete Credit Management System
examinations have greatly improved. Their last examination
“Our objective was to get a comprehensive solution to
was completed in one-eighth of the time as previous
credit management including credit approval processing,
exams. As a result of using CreditQuest, Baker Boyer
financial analysis and portfolio management. At the same
easily prepared comprehensive reports for examiners
time we knew we would be restructuring the commercial


Case Study
because all the information was in one system. In addition,
employee only one to two hours, enabling us to reduce
the credit memos in CreditQuest included all the information
staff time for portfolio management reporting by an
Baker Boyer National Bank’s examiners requested.
average of 25 hours per week,
” said Graham.
Improved Accuracy and Efficiency
CreditQuest has provided Baker Boyer National Bank with
a complete process that can be tracked from start to finish.
It has improved their efficiency, accuracy, and reduced
paper usage. In addition, it has helped them to completely
achieve electronic credit files, which are now accessible to
all employees authorized to view them. “Our loan approval
process can be managed and tracked easily. The approval
process takes much less time and each approval gives a
time and name of who has approved the loan. If the loan
is over the loan officer’s limit, CreditQuest automatically
escalates the application to the loan committee for
approval,
” expressed Graham.
Improved Data Quality
A Reputable and Established Vendor
When implementing CreditQuest, Baker Boyer found
Baker Boyer National Bank’s management felt that
an unexpected benefit. As they pulled data from their
choosing the right vendor was as important as choosing
core system, CreditQuest validated the information.
the right system. “
It was important to us to use a
Ultimately, many coding and other errors were uncovered
vendor that was reputable and established. We had
and corrected, improving the accuracy of vital management
an established relationship with Harland Financial
information.
Solutions, and had been a LaserPro
user for years.
®
We knew Harland Financial Solutions had a good
Support for Continued Growth
implementation and support team.
With CreditQuest
Harland Financial Solutions' reputation for continued
we have all the functionality we need and the support
support and development of their products was an
of a vendor with whom we have a valued relationship,”
important factor for why Baker Boyer National Bank
stated Graham.
chose CreditQuest. According to Graham, “Baker Boyer
National Bank found that CreditQuest is not just a
Reduced Staff Time
short-term change. This product is so dynamic and
The reporting functionality in Portfolio Manager has
configurable that each year we become more satisfied
greatly benefited Baker Boyer National Bank and now
and pleased with it. We continue to find new ways that
credit portfolio analysis and reporting can be done
CreditQuest can improve our efficiency and processes.”
quickly and efficiently. “Before implementing CreditQuest,
it took one employee two to three weeks to prepare the
monthly reports. Now with CreditQuest, it takes the
Harland Financial Solutions
800-815-5592
www.harlandfinancialsolutions.com
© 2009 Ha r lan d F in an c ial So lu tio n s, In c. All Rig h ts R e se rve d . C re d itQu e st is a r e gis te r ed t ra d em a r k
of H a rla nd F ina n cia l S o lut io ns . A ll o t he r p r od u c t na m es o r b r an d n a m es a re tr ad e m ar ks
o r r eg is te r ed tr ad e m ar ks o f th e ir re s pe c tiv e ho ld e rs .
09 0 32 0-5

Case Study CREDIT RISK

SCDLPGDBA

Case
Study
Independent Bank Corporation Eliminates Data Silos and
Streamlines Commercial Lending Processes with CreditQuest
®
“Using the report and analysis features in
CreditQuest along with hard work from our
staff, we were able to see the issues and
Independent Bank Corporation (IBC) is an Ionia,
ultimately reduce our exceptions by 50
Michigan-based bank holding company with total assets
of over $3 billion. Founded as First National Bank of
percent. As an organization, we changed our
Ionia in 1864, Independent Bank now operates more
incentives to refocus on exceptions—and
than 100 offices across Michigan’s Lower Peninsula,
providing retail and commercial banking, mortgage
their prevention.”
lending, investments and title insurance. In 2007, IBC
consolidated four banks under its umbrella, which required
Matt Norton
a melding of culture and operational methodology.
Business Analyst
Independent Bank
CreditQuest Eliminates Data Silos
Although the consolidation was coming together, the
bank’s credit origination process could not have been
“We are actually one of the first banks to sign with
spread further apart. “We had disparate systems and
CreditQuest in November of 2005.” Graves said. “A
were working with silos of data, which means we were
number of systems are now consolidated into CreditQuest,
wasting a lot of time, keystrokes and efficiency,
” said
to centralize operations. CreditQuest is the wheel that
Pete Graves, senior vice president and CIO of Independent
keeps things going; the various systems are the spokes
Bank Corporation. “We wanted to create a full-circle
of the wheel,
” Graves said. “We currently have our core,
lending model to streamline the process—one that went
which is our main repository of data, all of our financial
from loan underwriting and approval into document
spreads and loan proposals, LaserPro
documents and
®
preparation and then uploaded everything back to the core.
”
credit bureau information centralized. We are working
on adding risk rating automation and enterprise content
IBC chose Harland Financial Solutions’ CreditQuest, a
management with imaging. By positioning our workflow
complete, end-to-end commercial credit management
this way, we reduce our number of errors and increase
system. The solution brings origination, analysis,
efficiencies.”
underwriting, documentation and executive reporting
together for a unified, relationship-centric view of the
customer’s financial data and supporting documents.

Case Study
Report and Analysis Features
should see them,
” explained Norton. “That means there’s
Reduce Exceptions
one comprehensive reporting source, instead of five
CreditQuest is being rolled out in phases and IBC is already
different people doing five different things with five
seeing the benefits from this more streamlined approach.
different outcomes.
”
“One area where we are really seeing benefits is
Pete Graves concurs. “Before, we had snapshots instead
exceptions. These were not being tracked efficiently
of comprehensive reports. We would have to piece those
before, so we really didn’t know how bad they were. Using
different snapshots together for anything resembling a
the report and analysis features in CreditQuest along with
trend analysis,” he said. “CreditQuest’s Portfolio Manager
hard work from our staff, we were able to see the issues
takes all these snapshots and builds the trend, which
and ultimately reduce our exceptions by 50 percent. As
should save us a lot of time—and also provide us with
an organization, we changed our incentives to refocus
more accurate data.”
on exceptions—and their prevention,” said Matt Norton,
business analyst for Independent Bank.
Pipeline management is also important to Independent
Bank. “It’s a challenge to be able to extract how much
The bank is also pleased with CreditQuest’s document
business is actually out there, what your potential is,”
management and tickler functionality. “We can track
Graves said. “With pipeline management reporting, we
financial statements, like quarterly tax information, and
will be able to see the activity for that region and create
use the system to ‘mind the lender,
’ sending reminder
an effective strategy.
”
e-mails out before a document comes past due,
”
Norton explained.
Twelve years ago, Pete Graves envisioned the commercial
lending information “circle of life”, utilizing a comprehensive
CreditQuest will Improve Risk Rating Process
commercial loan process without the data silos. Today,
The integrated rating process for loans will also prove
with Harland Financial Solutions’ CreditQuest, that
beneficial. “We’re using the individual risk-rated transactions
vision is becoming reality.
to enhance our methodology. Instead of using our standard
“The platform enables everyone to evaluate and manage
12-point rating system, we will be able to break down
risk, because everyone can tie into it, and the system ties
the components so it’s easier to assess risk and identify
back into the core,” Graves said. “It’s a powerful way to
why the decision was made—such as cash flow, or
reduce keystrokes and risk while streamlining workflows.
loan-to-value—We can then better weight the various
Ultimately, we will be able to do even more with fewer
areas and, in effect, more accurately weight the risk,
”
people. There are a lot of variables in commercial lending.
Graves said.
Building a centralized workflow with one place to contain
Portfolio Manager Streamlines
all of that data is tremendous. That’s what CreditQuest
Reporting Process
helps us do.
”
IBC will soon begin implementation of CreditQuest’s
Portfolio Manager module. “Portfolio Manager will allow
us to organize data so that we can slice and dice the
inherent risk. We will use this information to create
comprehensive reports and provide access to those who

Case Study Lighting Efficiency at Unipart Warwickshire

Case StudyLighting Efficiency at Unipart WarwickshireObjectiveThe Unipart Group of Companies has a philosophy ofcontinuous improvement focused on driving the company toachieve world class standards of quality, delivery andcustomer service. The company creates continuousimprovements within the organisation based on soundFig. 1 Unipart Warwickshire Warehousebusiness thinking and recognition of the importance ofachieving world-class standards of performance to compete in global markets.Against this backdrop, Unipart has committed to have lower-carbon operations facilities andamongst other things, this means making the logistics and supply warehouses as efficient aspossible. Savenergi were able to assist Unipart in achieving the objective of reduced electricityconsumption, in this case by a massive 60% in their main Warwickshire warehouse.InstallationThe lighting efficiency proje ctencompassed all areas. In themain wareh ouse the old-style discharge lamps werechanged for high efficiency hi-bay f luorescent luminaires,coupled with da ylight-linkedcontrols, to switch offunnecessary lights when theambient light was sufficient,and occupancy detection toswitch off lamps when nobodyFig. 2 High-Efficiency Hi-Bay Luminaires (daylight-linked and motion sensored)was there. The results of theabove are half-hourly monitored to ensure actual realisation of the cash savings.All offices were fitted with appropriate daylight and motion-sensing automated control switchesand the exterior front loading bay area and the rear yard was lit at night with Hi-Brightness LED- 1 - power-white floodlights, giving reduced power consumption and at least 10 years betwee n lampreplacements.Fig. 4 Exterior Hi-Brightness LED floodlightsFig. 3 Office lights with intelligent controlsResultsProject BenefitsAnnual electricity consumption before project 1,100,000 kWhAnnual electricity saving 670,000 kWhPercentage saving 61%Annual operating cost saving @ 7.7p / kWh£61,900(incl. 20% est. maintenance)ROI payback period 30 monthsCOemission reduction per annum 360 tonnes2The environment for all employees has also been improved as all lights are now a more naturalwhite light, with safety benefits for label reading and higher light levels for operations work.Self-Funded ProjectIn this instance, the works were completed on a monthly payment model, such that the savingsthe mselves actually paid for the work carried out, thereby leaving Unipart with no net cost tothe ir operation.Savenergi Ltd.Tel: +44 (0)845 330 8864info@savenergi.comwww.savenergi.com- 2 - About SavenergiSavenergi Ltd. is a distributor of technically-innovative lighting produ ct s. Ou r service-driven,consultative approach to energy reduction allows us to guide ou r customers towards energyefficiencies. Savenergi is committed to reducing unnecessary energy waste in the commercial andindustrial sectors, thereby achieving lower direct energy costs and a reduction in carbon emissions.Savenergi will lower emission s immediately and save you money within a short payback period.These aims are achieved predominantly within medium-large scale lighting schemes, using productsranging from energy-saving voltage reduction devices, through lighting controls such as motion anddaylight sensors, to the latest high brightness power-white LED and fluorescent lighting applications.Savenergi is at the forefront of using the latest long-life and low-energy techn ologies for customersolutions, for both internal and external applications and are brand-independent, selecting the bestproducts for your particular installation.All customers are encouraged to utilise Savenergi’s “SAVER Programme”; a p rocess of savings-identificat ion through to implementation and cash benefit realisation .Savenergi is UK-based and services all size of organisation across the commercial, finance, retail,public sector, logistics, distribut ion, heavy industry, leisure, electronics, defence, highways, food andpharmaceutical sectors .More information on Savenergi can be found atwww.savenergi.comAbout UnipartThe Unipart Group employs more than 8,000 personnel worldwide and has an annual turnover ofmore than £1billion. It is a leading full service logistics provider and consultant in operation alexcellence.Operating across a range of market sectors, including automotive, leisure, marine, manufacturing,mobile telecoms, rail, retail and technology, Unipart offers a breadth of services from third partylogistics to expert consultancy.All Unipart sites operate according to the Group’s proprietary version of Lean known as The UnipartWay. This is a p hilosophy of working underpinned by tools and techniques that inspires efficiency,flexibility and outstanding customer service in any process.Unipart also offers expert consult ancy in implementing Lean principles and in supply ch ainmanagement across a variety of indu stry sectors.The Group’s clients include Sainsbury’s, Halfords, ASOS.com, Homebas e, Vodafone, 3, BSkyB, JaguarLand Rover, Severn Trent Water and HMRC.More information on Unipart can be found atwww.unipart.com- 3 -

CASE STUDY SELF MANAGE TEAM CONCEPT

CASE STUDYSELF MANAGE TEAM CONCEPTDurga Industries LimitedOBJECTIVE OF CASE STUDYThe major objectives behind taking the project are outlined below. SCOPE: • The purpose of the project is to study the self managed team concept.• What are the limitations & constraint during its realization• How to measure the effectiveness of model? Concept of self-managed teamThe self-managed team or SMT is a special kind of team. It can be highly effective. It can be phenomenally productive. And it is an autonomous entity. An entity with the endurance and power of a machine and the cunning and adaptability of an animal.A SMT isn't just a group of people working together but a genuine collaboration: A team in the true sense of the word. And it is a team which is measured by its results, not the performance of its individual members.• Are more independent than other types of team• Help to flatten organizational structure• Handle intermediate levels of responsibilities.OBJECTIVES OF TRAINING1) To impart basic knowledge and skill to the new entrants and enable them to perform their jobs well.2) To equip the employees to meet the changing requirements of the job and the organization.3) To teach the employees the new techniques and ways of performing the job or operations.4) To prepare the employees for higher level tasks and built up a second line ofcomponent managers. SELF MANAGE TEAM CONCEPTCRITERIA FOR MEASURING TRAINING EFFECTIVENESS:1. Trainee’s reaction towards the objectives:A training program can be evaluated in terms of trainee’s reaction to the objectives, contents and method of training. In case the trainee consider the program worthwhile and like it, the training can be considered effective.2. Extent of learning:The extent to which the trainees have learned desired knowledge and skills during the training period is a useful basis for measuring the training effectiveness.3. Behaviour of trainees:Improvement in job behaviour of trainees reflects the manner and extent to which learning has been applied to job.4. Result of training:The ultimate result in term of productivity improvement, quality improvement, cost reduction, accident reduction, and reduction in labour turn over are the best criteria for evaluating the effectiveness.NEED FOR EVALUATION:It is necessary to evaluate the extent to which training program have achieved the aim for which they were designed. It would provide information effectiveness of training as well as about the design of future training program. It helps to monitor and modifysuch program in future.1. QUESTIONAIRES: Comprehensive questionnaires are used to obtain options, reactions and various views of trainees. A training evaluation form is formed and circulated among all the trainees. The trainees fill in their responses asked in the form. The responses are then analyzed and an evaluation of the training program is done.2. TESTS: Standard tests are used to find out whether trainee has learnt practical aspects of work during and after training or not.3. INTERVIEWS: Personal interviews of the employees are conducted in order to find usefulness of the training offered to operatives.4. STUDIES: Comprehensive studies are carried out eluting the opinions and guidelines of the trainer’s superiors and peer groups about the training.5. FEEDBACK: A feedback report is prepared by evaluation at every stage of training. SELF MANAGE TEAM CONCEPTAREAS OF TRAININGThe areas in which training is offered can be classified into following categories:KNOWLEDGE Employee is taught about a set of rules and regulations about the job and products and services offered by the companyTECHNICAL SKILL Employee is taught a specific skill (e.g. operating a machine)so that he can acquire that skill and contribute meaningfullySOCIAL SKILL Employee is made to learn him and other develop a rightmental attitude towards the job, colleagues and the company.ATTITUDE This involves molding of employee’s attitude towardsvarious on the job situations.QUESTIONNAIRE FOR DATA COLLECTION:AGE :- SBU : - GENDER (M / F):-1. There is an up gradation in my skills during this training program: (a)Strongly agree. (b)Agree(c) Strongly disagree. (d) Disagree. (e) Can’t say.2. I feel confident due to my knowledge enrichment in these 3 months: (a)Strongly agree. (b)Agree(c) Strongly disagree. (d) Disagree. (e) Can’t say.3. My attitude has changed during the training: (a)Strongly agree. (b)Agree(c) Strongly disagree. (d) Disagree. (e) Can’t say.4. The teachers in the institute were effective in communicating their knowledge. (a)Strongly agree. (b)Agree(c) Strongly disagree. (d) Disagree.(e) Can’t say. SELF MANAGE TEAM CONCEPT5. The training aids provided during the training period were sufficient & helpful. (a)Strongly agree. (b)Agree(c) Strongly disagree. (d) Disagree. (e) Can’t say.6. The coordination training was enough:(a)Strongly agree. (b)Agree(c) Strongly disagree. (d) Disagree. (e) Can’t say.7. The time allotted to every subject was enough: (a)Strongly agree. (b)Agree(c) Strongly disagree. (d) Disagree. (e) Can’t say.8. I feel improvements in my communication after the training: (a)Strongly agree. (b)Agree(c) Strongly disagree. (d) Disagree. (e) Can’t say.9. There is improvement in my personality during the training program: (a)Strongly agree. (b)Agree(c) Strongly disagree. (d) Disagree.(e) Can’t SELF MANAGE TEAM CONCEPT1. The perception of SMT’s regarding up gradation of their skills. Strongly GrandGENDER Agreed % Agreed % TotalFemale 13 43.33 0.00 13Male 8 26.67 9 30.00 17Total 21 70.00 9 30.00 30AGE Agreed % StronglyAgreed % GrandTotal18 Years 4 13.33 1 3.33 519 Years 6 20.00 3 10.0 920 Years 4 13.33 2 6.67 621 Years 6 20.00 2 6.67 822 Years 1 3.33 1 3.33 2Total 21 70.00 9 30.00 30 Strongly GrandSBU Agreed % Agreed % TotalMeter 11 36.67 4 13.33 15T & D 10 33.33 5 16.67 15Total 21 70.00 9 30.00 30 SELF MANAGE TEAM CONCEPT2. The perception of SMT’s regarding knowledge enrichment in the 3 months : Strongly Can't Strongly GrandGENDER disagreed % say % Agreed % Agreed % TotalFemale 1 3.33 0.00 10 33.33 2 6.67 13Male 0.00 2 6.67 9 30.00 6 20.00 17Total 1 3.33 2 6.67 19 63.33 8 26.67 30AGEYear Stronglydisagreed % Can'tsay % Agreed % StronglyAgreed % GrandTotal18 0.00 0.00 4 13.3 1 3.33 519 0.00 2 6.67 6 20.0 1 3.33 920 0.00 0.00 4 13.3 2 6.67 621 0.00 0.00 4 13.3 4 13.33 822 1 3.33 0.00 1 3.3 0.00 2Total 1 3.33 2 6.67 19 63.33 8 26.67 30 Strongly Can't Strongly GrandSBU disagreed % say % Agreed % Agreed % TotalMeter 0 0.00 9 30.0 6 20.0 15T & D 1 3.33 2 6.67 10 33.3 2 6.6 15Total 1 3.33 2 6.67 19 63.3 8 26.6 30 SELF MANAGE TEAM CONCEPT3. The perception of SMT’s about change in their attitude in the 3 months: Can't Strongly GrandGENDER say % Agreed % Agreed % TotalFemale 2 6.67% 11 36.67% 0.00% 13Male 2 6.67% 7 23.33% 8 26.67% 17Total 4 13.33% 18 60.00% 8 26.67% 30AGE Can'tsay % Agreed % StronglyAgreed % GrandTotal18 Years 1 3.33% 3 10.00% 1 3.33% 519 Years 0.00% 6 20.00% 3 10.00% 920 Years 0.00% 4 13.33% 2 6.67% 621 Years 3 10.00% 4 13.33% 1 3.33% 822 Years 0.00% 1 3.33% 1 3.33% 2Total 4 13.33% 18 60.00% 8 26.67% 30SBU Can'tsay % Agreed % StronglyAgreed % GrandTotalEnergymeter 2 6.67% 8 26.67% 5 16.67% 15Transformer 2 6.67% 10 33.33% 3 10.00% 15Total 4 13.33% 18 60.00% 8 26.67% 30 SELF MANAGE TEAM CONCEPT4. The perception of SMT’s regarding communication improvement: Strongly GrandGENDER Agreed % Agreed % TotalFemale 11 36.67% 2 6.67% 13Male 15 50.00% 2 6.67% 17Grand Total 26 86.67% 4 13.33% 30AGE Agreed % StronglyAgreed % GrandTotal18 Years 4 13.33 1 3.33 519 Years 8 26.6 1 3.33 920 Years 6 20.00 0.00 621 Years 6 20.00 2 6.67 822 Years 2 6.67 0.00 2Total 26 86.67 4 13.33 30 Strongly GrandSBU Agreed % Agreed % TotalMeter 13 43.33 2 6.67 15T & D 13 43.33 2 6.67 15Total 26 86.67 4 13.33 30 SELF MANAGE TEAM CONCEPT5. The perception of SMT’s regarding adequacy training aids:GENDER Agreed % StronglyAgreed % GrandTotalFemale 8 26.67 5 16.67 13Male 13 43.33 4 13.33 17GrandTotal 21 70.00 9 30.00 30AGE Agreed % StronglyAgreed % GrandTotal18 Years 2 6.67 3 10.00 519 Years 6 20.0 3 10.00 920 Years 4 13.33 2 6.67 621 Years 7 23.33 1 3.33 822 Years 2 6.67 0.00 2Grand Total 21 70.00 9 30.00 30 Strongly SBU Agreed % Agreed % Grand TotalMeter 11 36.67 4 13.33 15T & D 10 33.33 5 16.67 15Grand Total 21 70.00 9 30.00 30 SELF MANAGE TEAM CONCEPT6. The perception of SMT’s regarding co-ordination :GENDER Agreed % StronglyAgreed % GrandTotalFemale 4 13.33 9 30.00 13Male 6 20.00 11 36.67 17Grand Total 10 33.33 20 66.67 30AGE Years Agreed % StronglyAgreed % GrandTotal18 2 6.67 3 10.0 519 2 6.67 7 23.3 920 2 6.67 4 13.3 621 4 13.33 4 13.3 822 0.00 2 6.67 2Grand Total 10 33.33 20 66.6 30 Strongly GrandSBU Agreed % Agreed % TotalMeter 5 16.67 10 33.33 15T & D 5 16.67 10 33.33 15Grand Total 10 33.33 20 66.67 30 SELF MANAGE TEAM CONCEPT7. The perception of SMT’s about time allotted to each subject was enough. Dis- Can't Strongly GrandGENDER agreed % say % Agreed % Agreed % TotalFemale 2 6.67 2 6.67 9 30.00 0.00 13Male 1 3.33 4 13.33 11 36.67 1 3.33 17Total 3 10.00 6 20.00 20 66.67 1 3.33 30AGEYears Dis-agreed % Can'tsay % Agreed % StronglyAgreed % GrandTotal18 0.00 1 3.33 4 13.33 0.00 519 1 3.3 1 3.33 7 23.33 0.00 920 1 3.33 1 3.33 4 13.33 0.00 621 1 3.33 1 3.33 5 16.67 1 3.33 822 0.00 2 6.67 0.00 0.00 2Total 3 10.00 6 20.00 20 66.67 1 3.33 30 Can't Strongly GrandSBU Disagreed % say % Agreed % Agreed % TotalMeter 2 6.67 2 6.67 11 36.67 0.00 15T & D 1 3.33 4 13.33 9 30.00 1 3.33 15Total 3 10.00 6 20.00 20 66.67 1 3.33 30 SELF MANAGE TEAM CONCEPT8. The perception of SMT’s about improvement in their communication. Can't Strongly GrandGENDER say % Agreed % Agreed % TotalFemale 1 3.33 7 23.33 5 16.67 13Male 0.00 12 40.00 5 16.67 17Total 1 3.33 19 63.33 10 33.33 30AGEYears Can'tsay % Agreed % StronglyAgreed % GrandTotal18 0.00 4 13.3 1 3.33 519 1 3.3 4 13.3 4 13.33 920 0.0 4 13.3 2 6.67 621 0.0 5 16.6 3 10.0 822 0.0 2 6.67 0.0 2Total 1 3.33% 19 63.33% 10 33.33% 30SBU Can'tsay % Agreed % StronglyAgreed % GrandTotalMeter 0.00 11 36.67 4 13.33 15T & D 1 3.33 8 26.67 6 20.00 15GrandTotal 1 3.33 19 63.33 10 33.33 30 SELF MANAGE TEAM CONCEPT9. The perception of SMT’s about improvement in their personality. Strongly GrandGENDER Agreed % Agreed % TotalFemale 10 33.4 3 10.0 13Male 11 36.6 6 20.0 17Grand Total 21 70.0 9 30.0 30AGE Agreed % StronglyAgreed % GrandTotal18 Years 4 13.33 1 3.33 519 Years 4 13.33 5 16.67 920 Years 5 16.67 1 3.33 621 Years 6 20.00 2 6.67 822 Years 2 6.67 0.00 2GrandTotal 21 70.00 9 30.00 30SBU Agreed % StronglyAgreed % GrandTotalEnergy meter 11 36.67 4 13.33 15Transformer 10 33.33 5 16.67 15Grand Total 21 70.00 9 30.00 30 SELF MANAGE TEAM CONCEPTFINDING, INFERENCES AND RECOMMENDATIONIn our research process, the effectiveness of training imparted to the SMT’s is measured on the basis of 10 different parameters. On the basis of data collected on these parameters we found the following results:1.) Skill up gradation:All the SMT’s are either agreed or strongly agreed on this statement.2.) Knowledge enrichment:91% of people are agreed at this point.3.) Attitude change:87% people feel change in their attitude after training.4.) Communication effectiveness of teachers at institute:All SMT’s are satisfied with the teacher’s effectiveness.5.) Content covered:Only 75% SMT’s feel that the whole content was covered during the program.6.) Good training aids :All are agreed at this point.7.) Full co-ordination:All are agreed to this statement.8.) Time adjustment:There were only 73% of people who are easily adjusted with the timing of training program.9.) Knowledge gained & expected knowledge:Only 60% of SMT’s feel that knowledge gained by them & expected knowledge is equal.10.) Proper time allocation to each subject:70% are agreed to this statement.Conclusion:The effectiveness of training imparted to SMT’s measured from the fact that the SMT’s are very well trained on different aspects. It provide them a good learning opportunity, improvement in personality & increasing employability skillFor the company it acts as long term investment in the building of talent pool.

CASE STUDY STRATEGY MANAGEMENT

CASE STUDYSTRATEGY MANAGEMENTSTRATEGY MANAGEMENTDELTACOM GmBHObjective: The case study helps to understand the perception & application of strategy formulation.The company is established in Germany and it is into the business of IT solution providerto various customers all over the globe. Recently in Chine, the company has participated in the International Bidding and awarded the contract. The company has made huge effort to get the order as it was very competitive, financially as well as from Technical specification point of view.The project duration is within the range of 7 to 10 years and it also outlay larger chunk of money. So after winning the contract, management called for Executive level meeting in Berlin for overall framework. The agenda of the meeting distributed to them was to decide upon the formulation & evaluation of various strategies to be adopted for the project.The major participants of projects are enlisted below.(1) Exclusive Partner (2) Integrated Partner(3) Project Solution seeker (4) Body Shopper(A)PARTNERSSEGMENTATON(B) BUSINESS DIMENSION FOR DIFFERENT CUSTOMER(C) VALUE PROPOSITION FOR DIFFERENT CUSTOMERS(D) BUNDLE OF COMPETENCES ANALYSIS(E) MISSION OF BUSINESS(F) STRATEGIC TEST(G) SCOPE OF TRANSFORMATION(H) STRATEGIC AGENDASTRATEGY MANAGEMENTPROCESS OF FORMULATION OF STRATEGYTCS BPCUSTOMER SEGMENTATION & VALUE PROPOSITIONTHE BUNDLE OF COMPETENCESMISSION OF BUSINESSI OPERATIONAL EXCELLENCE INNOVATION CUSTOMER TARGETINGAGGREGATE/GRANULAR METRICS EXPERIMENTATION AND FEEDBACKFINANCIAL EVALUATION & MATCHING STRATEGY STRATEGY MANAGEMENTLEGENDS :->TCS ---- TOTAL CUSTOMER SOLUTION BP – BEST PRODUCTSLI – SYSTEM LOCK IN(A) Partner SegmentationTier 1: Exclusive Partner• Japan based organisations provides outsourcing of IBM mainframe applications• Opportunity for customer lock-in• Joint Venture with IBM, the main source of Mainframe developer• Existing customers: GE Japan, JBCC, and AIGTier 2: Strategic/Integrated Partner• Long term symbiotic partnership with high value added• Existing customers: GE China, GE US, Kawasaki and Unisys.Tier 3: Project Solution Seekers• Full project ownership and solution delivery responsibility without established (but potential) for long-term client relationship• Existing customer: Toyota, Honda, US prospects, Dept. of Transportation ChinaTier 4: Body Shoppers• Transactional relationship to provide supplemental staff without much end client relationship• Existing customers: IBMDELTACOM GmBH has to choose the partner for project operation in Chins. Every business Partner has some strength & weakness in terms of their competency in different field. So the Company made the business dimension & value proposition analysis for each partners. So the cost comparison, Timely delivery as well as Qualityof operation can be judged on the same platform. STRATEGY MANAGEMENT(B) Business Dimension for Tier 1 -“Exclusive Partner” Products Critical partner to client providing highly integrated, customer specific, high-value added turnkey solutions for legacy mainframe applications in Japanese marketServices 24x7 Maintenance of mission-critical mainframe legacy.Application extension through analysis, design and development of new, integrated modules.Customer Japanese Corporations in Financial Services, Insurance, etc. industries.Channels Direct, Referrals from highly satisfied existing clientsEnd Users Japanese Corporations, Japanese Government organizations. Complementors IBM (as an h/2 and s/2 partner), existing clients, Accenture. Unique Competencies 1. Combination of deep knowledge of mainframe applications.2. High level of Quality combined with all the other costadvantage available to Chinese companies.(B) Business Dimension for Tier 2 -“Strategic /Integrated Partner”Customer Dimension DescriptionProducts Long-term relationship with client to provide customized and integrated solutions across multiple business units• T&M and Fixed price application development across multi- phase projects• Joint application development enabled through deep Services understanding of client culture and methodology• Dedicated retained teams as extension of clients ITorganization Customer GE US, GE China, Kawasaki, UnisysChannels DirectEnd Users N/AComplementors Other GE partners, IBM, other software partners, Accenture1. One of 12 exclusive outsourcing vendors or GE Unique Competencies 2. Six-Sigma quality combined with China’s cost advantage STRATEGY MANAGEMENT(B) Business Dimension for Tier 3 -“Project Solution seeker” Customer Dimension DescriptionProducts Individual project solutions without committed long-term relationshipT&M and Fixed price application development of discrete Services projects Customer Toyota, Honda, Department of Transportation China, USprospectsChannels Direct• Consulting partners such as IBM• Strategic partners such as GEEnd Users N/AComplementors Other GE partners, IBM, other software partners, Accenture1. One of 12 exclusive outsourcing vendors or GE Unique Competencies 2. Six-Sigma/CMM level-5 quality combined with China’s cost advantage (B) Business Dimension for Tier 4-“Body Shoppers”Customer Dimension DescriptionProducts Individual resources to supplement existing project teams and fill skills gaps(transactional)Services • T&M and retained resources for fixed time durations• Provide specific technology development skills on projectsCustomer IBM Japan, NECChannels Direct• Consulting partners such as IBMEnd Users CorporationComplementors N/AUnique Competencies 1. Consulting partnerships2. Technology skill differentiation STRATEGY MANAGEMENT(C) Value Proposition for Tier 1 -“Exclusive Partner” Value PropositionElement Description Experiences Seamless extension of Client team with integrated culture, skilled technologists with deep understanding of clients business. Value DeliverySystems • Dedicated client-focused team immersed in all aspects of client’s culture • Network integration to seamlessly extend clientenvironment ValueAppropriation • Open communication of all relevant information on both sides• Executive sponsor, CEO oversight, an full corporate reach• CMM and Six-Sigma delivery methodologies for delivery• Value added reselling of hardware and software for one-stop- shopping• Value gained by customer: Superior ROI, improved time-to- market, Security, Resource stability• Value gained by Deltacom: Exclusive long-term relationship, higher margins, predictable revenue• Value shared by both: Shared IP, shared learning, shared risk C) Value Proposition for Tier 2 -“Strategic /Integrated Partner”Value Proposition Element DescriptionExperiences Integrated teams of skilled technologists with deep understanding of client’s businessValue Delivery Systems • Dedicated client-focused teams fully trained in clients methodologies• Joint development plans• Cross-training and periodic two-way knowledge transfer• Business Relationship Manager, CEOoversight and full corporate reach STRATEGY MANAGEMENTValue Appropriation • Value gained by customer: Superior ROI, improved time-to-market, Security, Resource stability, Shared risk, Continuous improvement• Value gained by DMK: Access to client network as sales channel, credibility, learning• Value shared by both: Co-development ofshared standards and processes(C) Value Proposition for Tier 3 -“Project Solution seeker”Value Proposition Element DescriptionExperiences End-end-end delivery of a project with high quality and competitive priceValue Delivery Systems • Structured processes and teams with high quality of performance • Ability to quickly ramp-up on clients business and culture• Process for seamless transition at end of project• Dedicated project team manager with executive oversightValue Appropriation • Value gained by customer: Experimentation , learning, flexibility, reduced time-to-market, high quality, ROIValue gained by DMK: Opportunity for long- term relationship, ROI, learning •• Value shared by both: Shared learning in business domain and new technology STRATEGY MANAGEMENT(C) Value Proposition for Tier 4 -“Body Shoppers”Value Proposition Element DescriptionExperiences Supplement team with individual resources and fill gaps with skill expertiseValue Delivery Systems • Strong bench that can be tapped on demand• Mix of skills and expertiseValue Appropriation • Value gained by customer: Resources of demand and skills on demand• Value gained by DMK: Opportunity to up- sell, learning, improved bonding• Value shared by both: Exchange of skills(D) Bundle of competencies analysisSystems Lock-InDominant ExchaExclusive ChannelCustomer IntegratiTotal customer solution Low CostHorizontal Breadth DifferentiationRedefining Experience STRATEGY MANAGEMENT Sr. No. Description Current Situation Desired Situation 1 System Lock In No Specific competency thatcreate industry standard by the company. Company has to setcompetency skills for capturing the future market. 2. Low Cost Wage differential withreference to US, Europe, Japan & India.Availability of Large pool of skill in that Area.Experience Leveraging workloads & resource profitability. Chinese wages are very low.A large pool of computer science graduate for long termExpertise in managing in sudden change in demand and supply profitability 3. DominantExchange No Specific competencythat create strong bondage creation Company should developstrong coordination expertise with Tier 1 specialist in China. 4 ExclusiveChannel One of few firms with lowcost mainframe expertise.High Switching cost for fully integrated clients. It is required to barrier theentry of new competitorsIt acts as barrier to the exit of customer as highly tacit knowledge acquired about customer process throughlong interaction also 5. Customer Dedicated Team, Experience It also allow the expertise Integration in OutsourcingJoint venture with IBM transferable to other functionDue to this Company is able to integrate some of technologies of IBM with their own application 6. HorizontalBreath Mainframe & new languageexpertise. Multiple industry verticalsSystem development, testing& maintenance It strengthens the financial &insurance segment but slow development in other areas.Architecture & consulting expertise is a new challenge STRATEGY MANAGEMENTSr. No. Description Current Situation Desired Situation 7. RedefiningExperience Processes & expertise at end– to – end projects Its provides very cost controlled atmosphere foroperation 8. Differentiations Japanese speaking personnel, IBM mainframe expertiseCMM5 Level of operation, Six sigma approach for all functions The firm has to recruit local person that can speak & are familiar with the social & business manner of China.It is necessary to maintain the quality level of project & to eliminate chance of anyredraft. (E) MissionBecome the #1 provider of Business Process Outsourcing and IT Services inChina:• Analyzing, designing, developing, deploying, and maintaining software systems and solutions.• Delivering the highest quality of service and unparalleled value• Integrating seamlessly with complementary local service providers• Servicing large and mid-sized corporations, government departments and non- profit organizations• Through experienced, passionate and hard-working associates driven to provide outstanding service• Focusing first on China, Japan and US and expanding next into Europe andLatin American markets. STRATEGY MANAGEMENTF) TRANSFORMATION REQUIRED Sr.No. Scope Now Future 1. CustomerScope Primarily large corporations, Government departments of China Expand to include Service providers at the high-end of the software services value chain. 2. End-User Scope Large Corporations, Government departments in China Expand to include mid-sized corporations, State and Federal government departments, non-profit organization 3. Channel Scope Direct, Joint Venture Exclusive offshore service delivery partner-ships that allow white labelling of Deltacom services 4. ComplementorScope Hardware and software product companies Business Consulting, IT Strategy/Architecture consulting firms 5. GeographicalScope Japan and China with limited presence in the U.S. U.S. and U.K. expand into countries where language of business is non-English and wherecost of IT services is higher than China. (Indian firms do not have language advantage while China-based firms have significant cost advantage.) 6. Service Scope Lower end of software services value chain: Application development,system integration, systemconversation ,maintenance &support Integrated service that captures the entire value chain through strong collaboration with complementors at the high-end of the software service value chain 7. Product Scope Technology base such as J2EE framework, Microsoft.NET framework,etc. for rapid code 1. Horizontal Application frameworks such as Portal toolkits, Content Management toolkits, etc.2. Solutions frameworks such as development wealth management solutions forfinancial services, employee portals as HR solutions, etc. that leverage competencies/expertise of strategic and exclusive 8. UniqueCompetencies 1. High maturity in Software development process2. Six-Sigma certifiedproject and operations managers3. Low cost of China- based delivery 1. Ability to build teams that can integrate to other service organizations2. Develop professionalrelationships with other culture.3. Develop technical knowledge of specific domain STRATEGY MANAGEMENT(G) Strategic Agenda: Quality TestsSr. No. Dimension Description1 Comprehensiveness The agenda extends across all of functions services, geographies and market segments including geographies including customers, end users, channels and Complementors.2. Stretch Performance /measures for each thrust provide achievable but stretched goals for the organization. 3. Monitoring and control Milestones established throughout the process allow for continuous monitoring and change in strategy if and as required. 4. Motivation The mission combined with clear strategic thrust energizes the organization with a common set of goals and flexibility to innovate and grow.5. Vulnerability No material vulnerabilities have been identified at this time. Aligning execution with this strategic agenda time will be critical to the success of Delta Brake(H) Strategic Agenda Sr.No. Strategic Thrust PrimaryResponsibility Secondaryresponsibility 1. Invest in people Train &motivate. Hire outstanding talent. Develop strong designcapabilities. VP HRVP Operation CEOCFO 2. Expand delivery & customer CEO VP Sales , VP HR, VP support centre throughout china Marketing 3. Work with exclusive partners forrapid response & operation. CEO ,VP MarketingVP Operation VP Sales 4. Develop engagement program ofDeltacom team for better understanding of Chinese culture for easy flow of work VP HR VP Operation 5. Strengthen the relationship withthe IBM for better understanding& solution of customer needs. CEOVP Operation CFO

Financial Ratio analysis view_important topic

INTRODUCTIONFinancial ratio analysis is an important topic and is covered in all mainstream corporate finance textbooks. It is also a popular agenda item in investment club meetings. It is widely used to summarize the information in a company's financial statements in assessing its financial health. In today's information technology world, real time financial data are readily available via the Internet. Performing financial ratio analysis using publications, such as Robert Morris Associates’ Annual Statement Studies, Dun & Bradstreet’s Key Business Ratios, Moody’s Manuals, Standard & Poor’s Corporation Records, Value Line Investment Survey, etc., is no longer efficient. Since students and investors now have easy access to on-line databases, the assignments on financial ratio analysis can be modified accordingly to enhance learning. Based upon my experience as a finance professor and as a member of a local investment club, I have prepared this teaching note to help students and investors in performing financial ratio analysis via an on-line database, Dow Jones Interactive. This database is a Web based, enterprise wide business news and research solution supported by Dow Jones & Company, the parent company of The Wall Street Journal. The class assignment presented herein is designed to demonstrate how to assess a company's overall operations over time and its current financial standing in the industry. THE FINANCIAL RATIO ANALYSIS ASSIGNMENTStudents will work on the assignment collaboratively in groups of three or four students. Each group will select an industry of interest to the group, and each student will select a company within that industry. Students will download the relevant financial data from the Internet and perform ratio analysis for the selected companies. Since successful financial ratio analysis is as much an art as it is a science, students must use common sense and sound judgment throughout the analysis. The purpose of this assignment is to provide students with the opportunity to: • retrieve real time financial data via the Web; • analyze the financial performance of selected companies; • practice communication skills, both in writing (through word processing) and in speaking (through giving a Power Point presentation); • enhance teamwork skills.Trend analysis provides signals as to whether the company's financial health is likely to improve or deteriorate. Each student will perform the trend analysis based upon the following financial ratios: • Leverage Ratios: to measure the extent to which the company's assets are financed with debt; • Liquidity Ratios: to measure the company's ability to pay its bills; • Profitability Ratios: to measure the company's ability to generate earnings; • Efficiency Ratios: to measure the company's ability to utilize its assets; • Market Value Ratios: to measure the market perception about the company's future prospects.The downloaded four years' balance sheets and income statements are to be used to calculate the financial ratios not reported in the DJI. For example, four leverage ratios (Debt/Equity, LT Debt/ Cap, LT Debt/Tot Debt, and LT Debt/Tot Assets) are reported, but the interest coverage ratio (= earnings available for interest/interest expenses) is missing in the DJI. Students are required to obtain the earnings and interest expenses information from the income statements and calculate this ratio to measure the company's ability to service the debt. In the area of liquidity, current ratio (= current assets/current liabilities) and quick ratio (= quick assets/ current liabilities) are reported, but the interval measure (= quick assets/daily operating expenditures) is not. Students are required to obtain quick assets (= cash & equivalent + receivables) from the balance sheets and operating expenditures from the income statements, and calculate this ratio to measure how long the company can keep up with its bills using only existing quick assets. As the financial ratios in each of the five performance areas are compiled, they are analyzed across time. A sample trend analysis for Intel is presented (below) in Table 1. Table 1. Intel Trend AnalysisPERFORMANCE AREA 1998 1997 1996 1995 TRENDLeverage: Debt % Tot Assets 25.7 33.2 28.9 30.6 Drop in leverage during 1998Interest Coverage 269.7 395.8 318.4 195.4 Lower coverage during 1998Liquidity: Current Ratio 2.3 2.6 2.8 2.2 Lower liquidity since 1996Quick Ratio 1.0 1.3 1.6 1.3 Lower liquidity since 1996Interval Measure (days) 63.8 90.8 115.3 86.4 Lower liquidity since 1996Profitability: Profit Margin (%) 23.1 27.7 24.7 22.0 Lower profitability during 1998Return on Assets (%) 19.3 24.0 21.7 20.4 Lower ROA during 1998Return on Equity (%) 26.0 36.0 30.6 29.4 Lower ROE during 1998Efficiency: Asset Turnover .835 .868 .878 .926 Lower efficiency since 1995Receivables Turnover 7.5 7.0 6.1 6.4 Increased efficiency since 1996Inventory Turnover 5.7 5.2 4.4 4.1 Increased efficiency since 1995Market Value: Price/Book Value 8.41 5.92 6.37 3.83 Good market perceptions Du Pont AnalysisSince it is important to understand how the company's profitability, efficiency, and leverage are linked in its financial performance, students are required to demonstrate and evaluate its Du Pont system over time. The company's return on assets, ROA (=net income/assets), can be expressed as:ROA = (Net Income/Revenue) * (Revenue/Assets) = Profit Margin * Asset TurnoverAnd the company's return on equity, ROE (=net income/equity), can be expressed asROE = (Net Income/Revenue) * (Revenue/Assets) * (Assets/Equity) = ROA * Equity MultiplierBoth the company's profitability (as measured in terms of profit margin) and efficiency (as measured in terms of asset turnover) determine its ROA. This ROA, along with the company's financial leverage (as measured in terms of its equity multiplier), contributes to its ROE. As the company's use of leverage magnifies its ROE, students are required to examine ROE carefully. The changes in the company's ROE are to be noted and explained through its profit margin, asset turnover, and equity multiplier over time. The objective is to identify the company's strong area that can be capitalized upon and/or its weak area that must be improved upon. See Table 2 (below) for a sample Du Pont analysis for Intel. Table 2. Intel Du Pont Analysis Item / Ratio 1998 1997 1996 1995 EvaluationNet Income, $million (from Income statements) 6068 6945 5157 3566 Revenue, $million (from Income statements) 26273 25070 20847 16202 Assets, $million (from balance sheets) 31471 28880 23735 17504 Equity, $million (from balance sheets) 23377 19295 16872 12140 Profit Margin % (Net Income/Revenue) 23.1 27.7 24.70 22.0 Drop in profitability during 1998Asset Turnover (Revenue/Assets) .835 .868 .878 .926 Lower efficiency since 1995Return on Assets % (Profit Margin* Asset Turnover) 19.3 24 21.7 20.4 Drop in ROA during 1998Equity Multiplier (Assets/Equity) 1.35 1.50 1.41 1.44 Decrease in leverage during 1998Return on Equity % (ROA* Equity Multiplier) 26.0 36.0 30.6 29.4 Sharp decline in ROE during 1998 how the company performs as compared to the industry norms and where the company stands relative to its competitors in the industry. The company's weak and/or strong areas of performance must be identified and recommendations for improvement presented. See Table 3 (below) for a sample industry comparative analysis for Intel.Table 3. Intel Industry Comparative Analysis Performance Area Intel AMD* Semiconductors EvaluationLeverage: ExcellentDebt/Equity (%) 3 73 19 Low leverageInterest Coverage 269.7 - 20.8 High coverageLiquidity: GoodCurrent Ratio 3.2 1.7 2.8 Above average liquidityProfitability: ExcellentProfit Margin (%) 26.1 -0.9 11.1 High profitabilityReturn on Assets (%) 19.3 -2.4 7.2 High ROAReturn on Equity (%) 28.9 - 14.1 High ROEEfficiency: GoodRevenue/Assets .86 .64 .82 Above average Market Value: Good Price/Book Value 8.41 2.10 6.04 High price to bookPrice/Earnings 36.3 - 67.3 Below average PEDividend Yield (%) 0.2 0.0 0.1 Average * AMD, Advanced Micro Devices, is one of Intel's key competitors in semiconductors industry. SUMMARYThe incorporation of computer technology in finance classes has become more popular than ever in this information technology rich environment. Mediated classrooms have grown rapidly in numbers throughout universities worldwide. This teaching note demonstrates how finance professors, business students, and investment club members can take advantage of the changing environment to enhance learning. Students can easily retrieve a company's real time financial data via the Internet and analyze its financial performance over time. The assignment presented herein is designed to help students/investors learn how to assess the company's overall operations and its current financial standing in the industry through teamwork and state of the art computer technology. It can be used in any corporate finance classes and/or investment clubs.REFERENCESBodie, Z. and R.C. Merton. Finance (2000), Prentice-Hall, Inc. Brealey, R.A. and S.C. Myers. Principles of Corporate Finance (2000), 6th Edition, The McGraw-Hill Companies, Inc. Brealey, R.A., S.C. Myers and A.J. Marcus. Fundamentals of Corporate Finance (1999), 2nd Edition, The McGraw-Hill Companies, Inc. Brigham, E.F. and J.F. Houston. Fundamentals of Financial Management (1999), Concise 2nd Edition, The Dryden Press. Brigham, E.F., L.C. Gapenski and M.C. Ehrhardt. Financial Management: Theory and Practice (1999), 9th Edition, The Dryden Press. Gitman, L.J. Principles of Managerial Finance (2000), 9th Edition, Addison Wesley Longman, Inc. Keown, A., J.W. Petty, D.F. Scott and J.D. Martin. Foundations of Finance (1998), 2nd Edition, Prentice-Hall, Inc. Ross, S.A., R.W. Westerfield and B.D. Jordan. Essentials of Corporate Finance (1999), 2nd Edition, Irwin/McGraw-Hill. Ross, S.A., R.W. Westerfield and J. Jaffe. Corporate Finance (1999), 5th Edition, Irwin/McGraw-Hill. Scott, D.F., J.D. Martin, J.W. Petty and A. Keown. Basic Financial Management (1999), 8th Edition, Prentice-Hall, Inc. APPENDIX 1. FINANCIAL PROFILE Data current through 10/06/1999 INTEL CORP 2200 Mission College Blvd. Santa Clara, California 95052-8119 Telephone: (408) 765-8080 Fax: (408) 765-1596 Dow Jones Industry Group: Semiconductors Business Description: Designs, develops, manufactures and markets microcomputer components and related products at various levels of integration. Its principal components consist of silicon based semiconductors etched with complex patterns of transistors. Primary SIC: 3674 Stock Symbol: INTC Exchange: NASDAQ CEO: Craig R. Barrett Employees: 64,500 Auditors: Ernst & Young LLP Latest Report: Unqualified Balance Sheet Statement ($ Mil) Fiscal Year End Assets 12/1998 12/1997 12/1996 12/1995Cash & Equivalent 2,038.0 4,102.0 4,165.0 1,463.0Receivables 3,527.0 3,438.0 3,723.0 3,116.0Inventories 1,582.0 1,697.0 1,293.0 2,004.0Other Cur Assets 6,328.0 6,630.0 4,503.0 1,514.0Total Cur Assets 13,475.0 15,867.0 13,684.0 8,097.0Gr Fixed Assets 21,068.0 18,127.0 14,262.0 11,792.0Accum Depr 9,459.0 7,461.0 5,775.0 4,321.0Net Fixed Assets 11,609.0 10,666.0 8,487.0 7,471.0Oth Non-Cur Asset 6,387.0 2,347.0 1,564.0 1,936.0Tot Non-Cur Asset 17,996.0 13,013.0 10,051.0 9,407.0Total Assets 31,471.0 28,880.0 23,735.0 17,504.0Liabilities Accounts Payable 1,244.0 1,407.0 969.0 864.0Short-Term Debt 159.0 322.0 389.0 346.0Other Cur Liab 4,401.0 4,291.0 3,505.0 2,409.0Total Cur Liab 5,804.0 6,020.0 4,863.0 3,619.0Long-Term Debt 702.0 448.0 728.0 400.0Defer Inc Taxes 1,387.0 1,076.0 997.0 620.0Oth Non-Cur Liab 201.0 2,041.0 275.0 725.0Tot Non-Cur Liab 2,290.0 3,565.0 2,000.0 1,745.0Total Liabilities 8,094.0 9,585.0 6,863.0 5,364.0Preferred Equity 0.0 0.0 0.0 0.0Common Equity 23,377.0 19,295.0 16,872.0 12,140.0Retained Earnings 17,952.0 15,984.0 13,975.0 9,557.0Total Equity 23,377.0 19,295.0 16,872.0 12,140.0Tot Liab & Stk Eq 31,471.0 28,880.0 23,735.0 17,504.0Income Statement ($ Mil) Fiscal Year End 12/1998 12/1997 12/1996 12/1995Revenues/Sales 26,273.0 25,070.0 20,847.0 16,202.0Cost of Sales 9,337.0 7,753.0 7,276.0 6,432.0Gr Oper Profit 16,936.0 17,317.0 13,571.0 9,770.0S, G & A Expenses 5,585.0 5,238.0 4,130.0 3,139.0Op Prof bef Depr 11,351.0 12,079.0 9,441.0 6,631.0Deprec & Amort 2,807.0 2,192.0 1,888.0 1,379.0Oper Inc aft Depr 8,544.0 9,887.0 7,553.0 5,252.0Other Income, Net 792.0 799.0 406.0 415.0Inc Avail for Int 9,171.0 10,686.0 7,959.0 5,667.0Interest Expense 34.0 27.0 25.0 29.0Pretax Income 9,137.0 10,659.0 7,934.0 5,638.0Income Taxes 3,069.0 3,714.0 2,777.0 2,072.0Net Inc Tot Ops 6,068.0 6,945.0 5,157.0 3,566.0Special Inc/Chrg -165.0 0.0 0.0 0.0Normalized Income 6,233.0 6,945.0 5,157.0 3,566.0Total Net Income 6,068.0 6,945.0 5,157.0 3,566.0Preferred Div 0.0 0.0 0.0 0.0Net Inc Avail Com 6,068.0 6,945.0 5,157.0 3,566.0 Key Financial Ratios Fiscal Year End 12/1998 12/1997 12/1996 12/1995Book Value P/S 7.05 5.93 5.14 3.70Price/Book Val (%) 841 592 637 383Debt/Equity (%) 3 2 4 3LT Debt % Inv Cap 2.9 2.3 4.1 3.2LT Debt % Tot Dbt 8.7 4.7 10.6 7.5Debt % Tot Assets 25.7 33.2 28.9 30.6Quick Ratio 1.0 1.3 1.6 1.3Current Ratio 2.3 2.6 2.8 2.2Revenue/Assets (%) 80.0 90.0 90.0 90.0Price/Revenue (%) 748 456 516 288Cash % Revenue 7.8 16.4 20.0 9.0Pre-Tax Mgn (%) 34.8 42.5 38.1 34.8Post-Tax Mgn (%) 23.1 27.7 24.7 22.0Eff Tax Rate (%) 33.6 34.8 35.0 36.8Receivable Turn 7.5 7.0 6.1 6.4Inventory Turn 5.7 5.2 4.4 4.1Ret on Equity (%) 26.0 36.0 30.6 29.4Ret Invest Cap (%) 25.2 35.2 29.3 28.4Ret on Assets (%) 19.3 24.0 21.7 20.4Key Competitors: 3Com Acer AMD Atmel Cisco Systems EDS Fujitsu Harris Corporation Hitachi IBM Integrated Device Technology Lucent Macronix International Mitsubishi Electric Motorola National Semiconductor NEC Nortel Networks Philips Electronics Samsung Electronics STMicroelectronics Sun Microsystems Texas Instruments Toshiba APPENDIX 2. COMPANY TO COMPANY COMPARISON REPORT Data current through 10/06/1999 INTEL CORP ADVANCED MICRO DEVICES Price Change Latest Week 2.7 % 12.7 % Last 4 Weeks -11.9 % -10.4 % Last 13 Weeks 16.1 % 14.4 % Last 52 Weeks 83.6 % 28.0 % YTD 29.8 % -33.0 % Change vs S&P 500 Latest Week 99 % 109 % Last 4 Weeks 90 % 91 % Last 13 Weeks 123 % 121 % Last 52 Weeks 136 % 95 % YTD 120 % 62 % Price Range ($) Latest Close 76.94 19.44 52-Week High 89.50 33.00 52-Week Low 40.75 14.56 5-Year High 89.50 48.50 5-Year Low 6.34 10.25 Relative Price P/E Ratio 36.3 NE P/E, 5-Yr Avg High 24.1 NC P/E, 5-Yr Avg Low 12.2 NC Price/Book Value 841 % 210 % Price/Revenue 903 % 106 % Price Action Beta 1.25 1.64 Volume Shares Latest Week 58,668,800 8,122,000 $ Latest Week 4,500,263,000 152,453,000 % of Shares Out 1.77 % 5.52 % Liquidity Ratio 906,964,100 14,871,200 On-Balance Index 50 % 95 % Revenue 12 Months ($Mil) 28,194.0 2,701.4 Fiscal Year ($Mil) 26,273.0 2,542.1 Change Last Qtr 13.8 % 13.0 % Change YTD 16.1 % 14.9 % Earnings 12 Months ($Mil) 7,371.0 -25.2 EPS 12 Months($) 2.12 -0.18 EPS Fiscal Year($) 1.73 -0.72 Change EPS Qtr 54.5 % NE Change EPS YTD 56.5 % NE Change EPS 12 Mos 30.9 % NE 5-Yr Ann EPS Growth 24.9 % NC Dividends Indicated Rate($) 0.12 0.00 Dividend Yield 0.2 % 0.0 % 5-Yr Annual Growth 19.06 % NC Payout Ratio 4 % NC Payout Last 5 Years 4 % NC Last Ex-Dividend 11/03/1999 04/27/1995 Ratios Profit Margin 26.1 % -0.9 % Return on Equity 28.9 % NE Return on Assets 19.3 % -2.4 % Revenue/Assets 86 % 64 % Debt/Equity 3 % 73 % Interest Coverage 269.7 NC Current Ratio 3.2 1.7 Shareholdings Market Value ($Mil) 254,509 2,861 Latest Shares Out 3,308,000,000 147,211,000 Insider Net Trading -60,000 -18,667 Short Int Ratio 1.8 Days 5.5 Days Fiscal Year Ends 12/1998 12/1998 APPENDIX 3. COMPANY TO PRIMARY INDUSTRY COMPARISON REPORT Data current through 10/06/1999 INTEL CORP SEMICONDUCTORS Price Change Latest Week 2.7 % 6.0 % Last 4 Weeks -11.9 % -9.5 % Last 13 Weeks 16.1 % 4.9 % Last 52 Weeks 83.6 % 106.4 % YTD 29.8 % 29.2 % Change vs S&P 500 Latest Week 99 % 103 % Last 4 Weeks 90 % 92 % Last 13 Weeks 123 % 111 % Last 52 Weeks 136 % 153 % YTD 120 % 120 % Price Range ($) Latest Close 76.94 58.58 52-Week High 89.50 65.91 52-Week Low 40.75 28.29 5-Year High 89.50 65.91 5-Year Low 6.34 10.38 Relative Price P/E Ratio 36.3 67.3 P/E, 5-Yr Avg High 24.1 32.4 P/E, 5-Yr Avg Low 12.2 17.3 Price/Book Value 841 % 673 % Price/Revenue 903 % 687 % Price Action Beta 1.25 1.53 Volume Shares Latest Week 58,668,800 323,557,900 $ Latest Week 4,500,263,000 18,770,692,000 % of Shares Out 1.77 % 2.80 % Liquidity Ratio 906,964,100 3,175,400,000 On-Balance Index 50 % 61 % Revenue 12 Months ($Mil) 28,194.0 97,374.4 Fiscal Year ($Mil) 26,273.0 90,467.4 Change Last Qtr 13.8 % 22.9 % Change YTD 16.1 % 17.5 % Earnings 12 Months ($Mil) 7,371.0 10,808.0 EPS 12 Months($) 2.12 0.87 EPS Fiscal Year($) 1.73 0.71 Change EPS Qtr 54.5 % 150.0 % Change EPS YTD 56.5 % 59.3 % Change EPS 12 Mos 30.9 % 22.5 % 5-Yr Ann EPS Growth 24.9 % -9.8 % Dividends Indicated Rate($) 0.12 0.06 Dividend Yield 0.2 % 0.1 % 5-Yr Annual Growth 19.06 % 0.92 % Payout Ratio 4 % 6 % Payout Last 5 Years 4 % 3 % Last Ex-Dividend 11/03/1999 Ratios Profit Margin 26.1 % 11.1 % Return on Equity 28.9 % 14.1 % Return on Assets 19.3 % 7.2 % Revenue/Assets 86 % 82 % Debt/Equity 3 % 19 % Interest Coverage 269.7 20.8 Current Ratio 3.2 2.8 Shareholdings Market Value ($Mil) 254,509 677 Latest Shares Out 3,308,000,000 11,557,097,000 Insider Net Trading -60,000 -2,525,608 Short Int Ratio 1.8 Days 2.0 Days Fiscal Year Ends 12/1998 12/1998 Data Source: Media General Financial Services

Financial ratio analysis_TVS

INTRODUCTIONFinancial ratio analysis is an important topic and is covered in all mainstream corporate finance textbooks. It is also a popular agenda item in investment club meetings. It is widely used to summarize the information in a company's financial statements in assessing its financial health. In today's information technology world, real time financial data are readily available via the Internet. Performing financial ratio analysis using publications, such as Robert Morris Associates’ Annual Statement Studies, Dun & Bradstreet’s Key Business Ratios, Moody’s Manuals, Standard & Poor’s Corporation Records, Value Line Investment Survey, etc., is no longer efficient. Since students and investors now have easy access to on-line databases, the assignments on financial ratio analysis can be modified accordingly to enhance learning. Based upon my experience as a finance professor and as a member of a local investment club, I have prepared this teaching note to help students and investors in performing financial ratio analysis via an on-line database, Dow Jones Interactive. This database is a Web based, enterprise wide business news and research solution supported by Dow Jones & Company, the parent company of The Wall Street Journal. The class assignment presented herein is designed to demonstrate how to assess a company's overall operations over time and its current financial standing in the industry. THE FINANCIAL RATIO ANALYSIS ASSIGNMENTStudents will work on the assignment collaboratively in groups of three or four students. Each group will select an industry of interest to the group, and each student will select a company within that industry. Students will download the relevant financial data from the Internet and perform ratio analysis for the selected companies. Since successful financial ratio analysis is as much an art as it is a science, students must use common sense and sound judgment throughout the analysis. The purpose of this assignment is to provide students with the opportunity to: • retrieve real time financial data via the Web; • analyze the financial performance of selected companies; • practice communication skills, both in writing (through word processing) and in speaking (through giving a Power Point presentation); • enhance teamwork skills.Trend analysis provides signals as to whether the company's financial health is likely to improve or deteriorate. Each student will perform the trend analysis based upon the following financial ratios: • Leverage Ratios: to measure the extent to which the company's assets are financed with debt; • Liquidity Ratios: to measure the company's ability to pay its bills; • Profitability Ratios: to measure the company's ability to generate earnings; • Efficiency Ratios: to measure the company's ability to utilize its assets; • Market Value Ratios: to measure the market perception about the company's future prospects.The downloaded four years' balance sheets and income statements are to be used to calculate the financial ratios not reported in the DJI. For example, four leverage ratios (Debt/Equity, LT Debt/ Cap, LT Debt/Tot Debt, and LT Debt/Tot Assets) are reported, but the interest coverage ratio (= earnings available for interest/interest expenses) is missing in the DJI. Students are required to obtain the earnings and interest expenses information from the income statements and calculate this ratio to measure the company's ability to service the debt. In the area of liquidity, current ratio (= current assets/current liabilities) and quick ratio (= quick assets/ current liabilities) are reported, but the interval measure (= quick assets/daily operating expenditures) is not. Students are required to obtain quick assets (= cash & equivalent + receivables) from the balance sheets and operating expenditures from the income statements, and calculate this ratio to measure how long the company can keep up with its bills using only existing quick assets. As the financial ratios in each of the five performance areas are compiled, they are analyzed across time. A sample trend analysis for Intel is presented (below) in Table 1. Table 1. Intel Trend AnalysisPerformance Area 1998 1997 1996 1995 trendLeverage: Debt % Tot Assets 25.7 33.2 28.9 30.6 Drop in leverage during 1998Interest Coverage 269.7 395.8 318.4 195.4 Lower coverage during 1998Liquidity: Current Ratio 2.3 2.6 2.8 2.2 Lower liquidity since 1996Quick Ratio 1.0 1.3 1.6 1.3 Lower liquidity since 1996Interval Measure (days) 63.8 90.8 115.3 86.4 Lower liquidity since 1996Profitability: Profit Margin (%) 23.1 27.7 24.7 22.0 Lower profitability during 1998Return on Assets (%) 19.3 24.0 21.7 20.4 Lower ROA during 1998Return on Equity (%) 26.0 36.0 30.6 29.4 Lower ROE during 1998Efficiency: Asset Turnover .835 .868 .878 .926 Lower efficiency since 1995Receivables Turnover 7.5 7.0 6.1 6.4 Increased efficiency since 1996Inventory Turnover 5.7 5.2 4.4 4.1 Increased efficiency since 1995Market Value: Price/Book Value 8.41 5.92 6.37 3.83 Good market perceptions Du Pont AnalysisSince it is important to understand how the company's profitability, efficiency, and leverage are linked in its financial performance, students are required to demonstrate and evaluate its Du Pont system over time. The company's return on assets, ROA (=net income/assets), can be expressed as:ROA = (Net Income/Revenue) * (Revenue/Assets) = Profit Margin * Asset TurnoverAnd the company's return on equity, ROE (=net income/equity), can be expressed asROE = (Net Income/Revenue) * (Revenue/Assets) * (Assets/Equity) = ROA * Equity MultiplierBoth the company's profitability (as measured in terms of profit margin) and efficiency (as measured in terms of asset turnover) determine its ROA. This ROA, along with the company's financial leverage (as measured in terms of its equity multiplier), contributes to its ROE. As the company's use of leverage magnifies its ROE, students are required to examine ROE carefully. The changes in the company's ROE are to be noted and explained through its profit margin, asset turnover, and equity multiplier over time. The objective is to identify the company's strong area that can be capitalized upon and/or its weak area that must be improved upon. See Table 2 (below) for a sample Du Pont analysis for Intel. Table 2. Intel Du Pont Analysis Item / Ratio 1998 1997 1996 1995 EvaluationNet Income, $million (from Income statements) 6068 6945 5157 3566 Revenue, $million (from Income statements) 26273 25070 20847 16202 Assets, $million (from balance sheets) 31471 28880 23735 17504 Equity, $million (from balance sheets) 23377 19295 16872 12140 Profit Margin % (Net Income/Revenue) 23.1 27.7 24.70 22.0 Drop in profitability during 1998Asset Turnover (Revenue/Assets) .835 .868 .878 .926 Lower efficiency since 1995Return on Assets % (Profit Margin* Asset Turnover) 19.3 24 21.7 20.4 Drop in ROA during 1998Equity Multiplier (Assets/Equity) 1.35 1.50 1.41 1.44 Decrease in leverage during 1998Return on Equity % (ROA* Equity Multiplier) 26.0 36.0 30.6 29.4 Sharp decline in ROE during 1998 how the company performs as compared to the industry norms and where the company stands relative to its competitors in the industry. The company's weak and/or strong areas of performance must be identified and recommendations for improvement presented. See Table 3 (below) for a sample industry comparative analysis for Intel.Table 3. Intel Industry Comparative Analysis Performance Area Intel AMD* Semiconductors EvaluationLeverage: ExcellentDebt/Equity (%) 3 73 19 Low leverageInterest Coverage 269.7 - 20.8 High coverageLiquidity: GoodCurrent Ratio 3.2 1.7 2.8 Above average liquidityProfitability: ExcellentProfit Margin (%) 26.1 -0.9 11.1 High profitabilityReturn on Assets (%) 19.3 -2.4 7.2 High ROAReturn on Equity (%) 28.9 - 14.1 High ROEEfficiency: GoodRevenue/Assets .86 .64 .82 Above average Market Value: Good Price/Book Value 8.41 2.10 6.04 High price to bookPrice/Earnings 36.3 - 67.3 Below average PEDividend Yield (%) 0.2 0.0 0.1 Average * AMD, Advanced Micro Devices, is one of Intel's key competitors in semiconductors industry. SUMMARYThe incorporation of computer technology in finance classes has become more popular than ever in this information technology rich environment. Mediated classrooms have grown rapidly in numbers throughout universities worldwide. This teaching note demonstrates how finance professors, business students, and investment club members can take advantage of the changing environment to enhance learning. Students can easily retrieve a company's real time financial data via the Internet and analyze its financial performance over time. The assignment presented herein is designed to help students/investors learn how to assess the company's overall operations and its current financial standing in the industry through teamwork and state of the art computer technology. It can be used in any corporate finance classes and/or investment clubs.REFERENCESBodie, Z. and R.C. Merton. Finance (2000), Prentice-Hall, Inc. Brealey, R.A. and S.C. Myers. Principles of Corporate Finance (2000), 6th Edition, The McGraw-Hill Companies, Inc. Brealey, R.A., S.C. Myers and A.J. Marcus. Fundamentals of Corporate Finance (1999), 2nd Edition, The McGraw-Hill Companies, Inc. Brigham, E.F. and J.F. Houston. Fundamentals of Financial Management (1999), Concise 2nd Edition, The Dryden Press. Brigham, E.F., L.C. Gapenski and M.C. Ehrhardt. Financial Management: Theory and Practice (1999), 9th Edition, The Dryden Press. Gitman, L.J. Principles of Managerial Finance (2000), 9th Edition, Addison Wesley Longman, Inc. Keown, A., J.W. Petty, D.F. Scott and J.D. Martin. Foundations of Finance (1998), 2nd Edition, Prentice-Hall, Inc. Ross, S.A., R.W. Westerfield and B.D. Jordan. Essentials of Corporate Finance (1999), 2nd Edition, Irwin/McGraw-Hill. Ross, S.A., R.W. Westerfield and J. Jaffe. Corporate Finance (1999), 5th Edition, Irwin/McGraw-Hill. Scott, D.F., J.D. Martin, J.W. Petty and A. Keown. Basic Financial Management (1999), 8th Edition, Prentice-Hall, Inc. APPENDIX 1. FINANCIAL PROFILE Data current through 10/06/1999 INTEL CORP 2200 Mission College Blvd. Santa Clara, California 95052-8119 Telephone: (408) 765-8080 Fax: (408) 765-1596 Dow Jones Industry Group: Semiconductors Business Description: Designs, develops, manufactures and markets microcomputer components and related products at various levels of integration. Its principal components consist of silicon based semiconductors etched with complex patterns of transistors. Primary SIC: 3674 Stock Symbol: INTC Exchange: NASDAQ CEO: Craig R. Barrett Employees: 64,500 Auditors: Ernst & Young LLP Latest Report: Unqualified Balance Sheet Statement ($ Mil) Fiscal Year End Assets 12/1998 12/1997 12/1996 12/1995Cash & Equivalent 2,038.0 4,102.0 4,165.0 1,463.0Receivables 3,527.0 3,438.0 3,723.0 3,116.0Inventories 1,582.0 1,697.0 1,293.0 2,004.0Other Cur Assets 6,328.0 6,630.0 4,503.0 1,514.0Total Cur Assets 13,475.0 15,867.0 13,684.0 8,097.0Gr Fixed Assets 21,068.0 18,127.0 14,262.0 11,792.0Accum Depr 9,459.0 7,461.0 5,775.0 4,321.0Net Fixed Assets 11,609.0 10,666.0 8,487.0 7,471.0Oth Non-Cur Asset 6,387.0 2,347.0 1,564.0 1,936.0Tot Non-Cur Asset 17,996.0 13,013.0 10,051.0 9,407.0Total Assets 31,471.0 28,880.0 23,735.0 17,504.0Liabilities Accounts Payable 1,244.0 1,407.0 969.0 864.0Short-Term Debt 159.0 322.0 389.0 346.0Other Cur Liab 4,401.0 4,291.0 3,505.0 2,409.0Total Cur Liab 5,804.0 6,020.0 4,863.0 3,619.0Long-Term Debt 702.0 448.0 728.0 400.0Defer Inc Taxes 1,387.0 1,076.0 997.0 620.0Oth Non-Cur Liab 201.0 2,041.0 275.0 725.0Tot Non-Cur Liab 2,290.0 3,565.0 2,000.0 1,745.0Total Liabilities 8,094.0 9,585.0 6,863.0 5,364.0Preferred Equity 0.0 0.0 0.0 0.0Common Equity 23,377.0 19,295.0 16,872.0 12,140.0Retained Earnings 17,952.0 15,984.0 13,975.0 9,557.0Total Equity 23,377.0 19,295.0 16,872.0 12,140.0Tot Liab & Stk Eq 31,471.0 28,880.0 23,735.0 17,504.0Income Statement ($ Mil) Fiscal Year End 12/1998 12/1997 12/1996 12/1995Revenues/Sales 26,273.0 25,070.0 20,847.0 16,202.0Cost of Sales 9,337.0 7,753.0 7,276.0 6,432.0Gr Oper Profit 16,936.0 17,317.0 13,571.0 9,770.0S, G & A Expenses 5,585.0 5,238.0 4,130.0 3,139.0Op Prof bef Depr 11,351.0 12,079.0 9,441.0 6,631.0Deprec & Amort 2,807.0 2,192.0 1,888.0 1,379.0Oper Inc aft Depr 8,544.0 9,887.0 7,553.0 5,252.0Other Income, Net 792.0 799.0 406.0 415.0Inc Avail for Int 9,171.0 10,686.0 7,959.0 5,667.0Interest Expense 34.0 27.0 25.0 29.0Pretax Income 9,137.0 10,659.0 7,934.0 5,638.0Income Taxes 3,069.0 3,714.0 2,777.0 2,072.0Net Inc Tot Ops 6,068.0 6,945.0 5,157.0 3,566.0Special Inc/Chrg -165.0 0.0 0.0 0.0Normalized Income 6,233.0 6,945.0 5,157.0 3,566.0Total Net Income 6,068.0 6,945.0 5,157.0 3,566.0Preferred Div 0.0 0.0 0.0 0.0Net Inc Avail Com 6,068.0 6,945.0 5,157.0 3,566.0 Key Financial Ratios Fiscal Year End 12/1998 12/1997 12/1996 12/1995Book Value P/S 7.05 5.93 5.14 3.70Price/Book Val (%) 841 592 637 383Debt/Equity (%) 3 2 4 3LT Debt % Inv Cap 2.9 2.3 4.1 3.2LT Debt % Tot Dbt 8.7 4.7 10.6 7.5Debt % Tot Assets 25.7 33.2 28.9 30.6Quick Ratio 1.0 1.3 1.6 1.3Current Ratio 2.3 2.6 2.8 2.2Revenue/Assets (%) 80.0 90.0 90.0 90.0Price/Revenue (%) 748 456 516 288Cash % Revenue 7.8 16.4 20.0 9.0Pre-Tax Mgn (%) 34.8 42.5 38.1 34.8Post-Tax Mgn (%) 23.1 27.7 24.7 22.0Eff Tax Rate (%) 33.6 34.8 35.0 36.8Receivable Turn 7.5 7.0 6.1 6.4Inventory Turn 5.7 5.2 4.4 4.1Ret on Equity (%) 26.0 36.0 30.6 29.4Ret Invest Cap (%) 25.2 35.2 29.3 28.4Ret on Assets (%) 19.3 24.0 21.7 20.4Key Competitors: 3Com Acer AMD Atmel Cisco Systems EDS Fujitsu Harris Corporation Hitachi IBM Integrated Device Technology Lucent Macronix International Mitsubishi Electric Motorola National Semiconductor NEC Nortel Networks Philips Electronics Samsung Electronics STMicroelectronics Sun Microsystems Texas Instruments Toshiba APPENDIX 2. COMPANY TO COMPANY COMPARISON REPORT Data current through 10/06/1999 INTEL CORP ADVANCED MICRO DEVICES Price Change Latest Week 2.7 % 12.7 % Last 4 Weeks -11.9 % -10.4 % Last 13 Weeks 16.1 % 14.4 % Last 52 Weeks 83.6 % 28.0 % YTD 29.8 % -33.0 % Change vs S&P 500 Latest Week 99 % 109 % Last 4 Weeks 90 % 91 % Last 13 Weeks 123 % 121 % Last 52 Weeks 136 % 95 % YTD 120 % 62 % Price Range ($) Latest Close 76.94 19.44 52-Week High 89.50 33.00 52-Week Low 40.75 14.56 5-Year High 89.50 48.50 5-Year Low 6.34 10.25 Relative Price P/E Ratio 36.3 NE P/E, 5-Yr Avg High 24.1 NC P/E, 5-Yr Avg Low 12.2 NC Price/Book Value 841 % 210 % Price/Revenue 903 % 106 % Price Action Beta 1.25 1.64 Volume Shares Latest Week 58,668,800 8,122,000 $ Latest Week 4,500,263,000 152,453,000 % of Shares Out 1.77 % 5.52 % Liquidity Ratio 906,964,100 14,871,200 On-Balance Index 50 % 95 % Revenue 12 Months ($Mil) 28,194.0 2,701.4 Fiscal Year ($Mil) 26,273.0 2,542.1 Change Last Qtr 13.8 % 13.0 % Change YTD 16.1 % 14.9 % Earnings 12 Months ($Mil) 7,371.0 -25.2 EPS 12 Months($) 2.12 -0.18 EPS Fiscal Year($) 1.73 -0.72 Change EPS Qtr 54.5 % NE Change EPS YTD 56.5 % NE Change EPS 12 Mos 30.9 % NE 5-Yr Ann EPS Growth 24.9 % NC Dividends Indicated Rate($) 0.12 0.00 Dividend Yield 0.2 % 0.0 % 5-Yr Annual Growth 19.06 % NC Payout Ratio 4 % NC Payout Last 5 Years 4 % NC Last Ex-Dividend 11/03/1999 04/27/1995 Ratios Profit Margin 26.1 % -0.9 % Return on Equity 28.9 % NE Return on Assets 19.3 % -2.4 % Revenue/Assets 86 % 64 % Debt/Equity 3 % 73 % Interest Coverage 269.7 NC Current Ratio 3.2 1.7 Shareholdings Market Value ($Mil) 254,509 2,861 Latest Shares Out 3,308,000,000 147,211,000 Insider Net Trading -60,000 -18,667 Short Int Ratio 1.8 Days 5.5 Days Fiscal Year Ends 12/1998 12/1998 APPENDIX 3. COMPANY TO PRIMARY INDUSTRY COMPARISON REPORT Data current through 10/06/1999 INTEL CORP SEMICONDUCTORS Price Change Latest Week 2.7 % 6.0 % Last 4 Weeks -11.9 % -9.5 % Last 13 Weeks 16.1 % 4.9 % Last 52 Weeks 83.6 % 106.4 % YTD 29.8 % 29.2 % Change vs S&P 500 Latest Week 99 % 103 % Last 4 Weeks 90 % 92 % Last 13 Weeks 123 % 111 % Last 52 Weeks 136 % 153 % YTD 120 % 120 % Price Range ($) Latest Close 76.94 58.58 52-Week High 89.50 65.91 52-Week Low 40.75 28.29 5-Year High 89.50 65.91 5-Year Low 6.34 10.38 Relative Price P/E Ratio 36.3 67.3 P/E, 5-Yr Avg High 24.1 32.4 P/E, 5-Yr Avg Low 12.2 17.3 Price/Book Value 841 % 673 % Price/Revenue 903 % 687 % Price Action Beta 1.25 1.53 Volume Shares Latest Week 58,668,800 323,557,900 $ Latest Week 4,500,263,000 18,770,692,000 % of Shares Out 1.77 % 2.80 % Liquidity Ratio 906,964,100 3,175,400,000 On-Balance Index 50 % 61 % Revenue 12 Months ($Mil) 28,194.0 97,374.4 Fiscal Year ($Mil) 26,273.0 90,467.4 Change Last Qtr 13.8 % 22.9 % Change YTD 16.1 % 17.5 % Earnings 12 Months ($Mil) 7,371.0 10,808.0 EPS 12 Months($) 2.12 0.87 EPS Fiscal Year($) 1.73 0.71 Change EPS Qtr 54.5 % 150.0 % Change EPS YTD 56.5 % 59.3 % Change EPS 12 Mos 30.9 % 22.5 % 5-Yr Ann EPS Growth 24.9 % -9.8 % Dividends Indicated Rate($) 0.12 0.06 Dividend Yield 0.2 % 0.1 % 5-Yr Annual Growth 19.06 % 0.92 % Payout Ratio 4 % 6 % Payout Last 5 Years 4 % 3 % Last Ex-Dividend 11/03/1999 Ratios Profit Margin 26.1 % 11.1 % Return on Equity 28.9 % 14.1 % Return on Assets 19.3 % 7.2 % Revenue/Assets 86 % 82 % Debt/Equity 3 % 19 % Interest Coverage 269.7 20.8 Current Ratio 3.2 2.8 Shareholdings Market Value ($Mil) 254,509 677 Latest Shares Out 3,308,000,000 11,557,097,000 Insider Net Trading -60,000 -2,525,608 Short Int Ratio 1.8 Days 2.0 Days Fiscal Year Ends 12/1998 12/1998 Data Source: Media General Financial Services