Toy World, Inc. Case Analysis Essay Example for Free

Toy World, Inc. Case Analysis Essay Executive Summary Toy World, Inc. is a company that has been manufacturing toys for children since 1973. Since 1976, the company has enjoyed profitable operations. At the end of 1993, revenue and profit came close to $8 million and $270 thousand respectively. With Jack McClintock as president and Dan Hoffman as production manager, the two have tried to find a strategy to adjust operations to the volatility of the toy market. Sales in the toy market are seasonal, reaching peaks in the months of August through December, while remaining relatively flat during the remaining months of the year. This seasonality has affected the company’s production schedule. During the off season, inventory is low, skilled workers are underutilized, and machinery is left idle. When the busy season finally arrives, Toy World is forced to hire more workers, pay additional overtime wages, and operate at full capacity. Dan Hoffman sees inefficiencies in this schedule and proposes a level production plan that would eliminate overtime wages and fully utilize skilled workers. Under his plan, toys would be manufactured evenly every month, allowing inventory levels to build in the months leading up to the holidays. In addition to using cash, the company must also take on additional loans to compensate for the high inventory levels. In an industry that has relatively low capital requirements, Hoffman’s strategy may increase overall profitability, but it jeopardizes the company’s liquidity. 1. What factors could Mr. McClintock consider in deciding whether or not to adopt the level production plan? The main factors Mr. McClintock should consider when deciding whether or not to adopt the level production plan comes down to the trade off between liquidity and profitability. Given the  highly seasonal nature of the industry, producing goods ahead of time has strong risks associated with it. If management’s projections are incorrect, the company could incur significant inventory write-downs or write offs. Additionally, the company will incur extra costs of storing the inventory that will accumulate in the first half of the year. Further, Mr. McClintock should analyze the differences in amount and timing of the company’s external funding needs under the level production plan, and whether or not the financing needs can be met by the current credit line of $2 million. To assess the impact of these factors, we prepared pro forma financial statements under level production. 2. What savings would be involved? The savings involved in leveling production include reductions in overtime premiums as well as a decrease in additional labor costs. Expenses involved in this production overhaul include increased shipping and handling expenses and an increase in interest expenses. Both of these expenses are a result of having increased inventory levels. Total savings less total expenses from the new production strategy results in positive net savings of $148,000. See Exhibit E. 3. Prepare the pro forma financial statements and estimate the external funding needs required. Income Statement In preparing monthly statements under the level production plan, several adjustments were made to management’s original projections (Exhibit A). Given the annual savings in overtime premiums as well as direct labor, cost of goods sold under level production would be reduced from a constant 70 percent of sales to 65.1 percent of sales. However, this is slightly offset by the annual increase in storage and handling costs, which is accounted for in operating expenses. To determine the interest income, we multiplied the average monthly cash balance by the 4 percent annualized return provided by management. Income taxes remained at 34 percent, arriving at a total net income of $661 for 1994. Balance Sheet The most significant adjustments made to the balance sheet were under inventory, accrued taxes, and notes payable. As is depicted in Exhibit B, we prepared schedules for both accrued taxes as well as inventory. Management provided a specific tax payment schedule, which was subtracted from each month’s income taxes to arrive at ending accrued taxes. As for inventory, beginning inventory plus finished goods completed less cost of goods sold determined each month’s ending inventory. Under level production, the finished goods completed should be constant month over month. We determined this number by dividing the annual cost of goods sold by 12. Finally, notes payable was our plug figure. As this line item represents the company’s existing credit line, it can be further analyzed to assess the company’s amount of added funds required and the timing of the needs under level production. External Funding Needs Toy World Inc. will require large external funding in order to support inventory levels leading up to the holiday season. Toy World currently has a $2 million line of credit with the bank. In order to support the level production plan, we estimate that Toy World will need a line of credit of close to $4 million in the month of September. 4. Compare the liabilities patterns feasible under the alternative production plans. What implications do their differences have for the risk assumed by the various parties? Under the alternative production plans, the timing and amount of funding that Toy World will need to keep up with inventory projections significantly differs. For example, in June, due to the lags of the 60-day collection periods, strong funding will be needed to keep up with the level production. If management moves forward with the current seasonal production plan, they would not take on the further liabilities and maintain lower cash balances in the busy months of September to December. The most significant tradeoffs of the two scenarios are between liquidity, profitability and leverage. If the toys ended up not being as popular as they forecasted, then the various parties would take on the risk of the rising inventories. Toy world would  then have to decide whether or not to hang onto the excess inventory in anticipation of increased demand, or rid themselves of inventory to increase working capital. Either way, this risk, if came to fruition, would be a lose-lose situation for if they hold onto it and demand doesn’t bounce back, then they lost some working capital, but if demand does bounce back, and they have gotten rid of the inventory, they will find themselves unable to keep up with demand. Also, the industry has relatively no barriers to entry so taking on more debt in this volatile industry to increase inventories would be risky as products have short lives and a relatively high rate of company failures. Sensitivity Analysis Given the inherent risks associated with producing toys significantly ahead of time, we decided to conduct a sensitivity analysis around this factor (Exhibit D). Specifically, we assessed the impact of writing off 10 percent of the prior month’s inventory balance. This change would be reflected as a direct reduction in inventory, as well as a corresponding increase in cost of goods sold, resulting in a 382 percent decrease in net income from seasonal production. While 10 percent of total inventory write downs is an extreme downside situation, the key take away is the importance of how accurate management’s projections are. In a level production plan, management will have to begin producing for peak sales periods early on in the year, greatly increasing the risk of inaccurate projections. Therefore, one of the most critical considerations in adopting level production is the confidence in management’s ability to accurately forecast industry trends. Conclusion Despite past profitability and success, our analysis shows that Toy World, Inc. could benefit greatly from an operational restructuring. Adjusting their business model to implement a level production plan in 1994 as opposed to past seasonal production will result in a positive impact on the company’s profitability. However, in order to implement these changes, Toy World, Inc. will need an extension on their line of credit. Further, our sensitivity analysis shows the importance of having strong confidence in management’s projection ability. If the company believes that their  projections will be accurate enough to avoid significant inventory write offs, and can obtain approval for an extension in the line of credit, transitioning to a level production plan will greatly improve profitability and operational efficiency.

The Negative Impacts of the Harlem Renaissance Essay -- essays researc

The 1920’s were a period or rapid growth and change in America. After World War I American’s were introduced to a lifestyle of lavishness they had never encountered before. It was a period of radical thought and ideas. It was in this time period that the idea of the Harlem Renaissance was born. The ideology behind the Harlem Renaissance was to create the image of the â€Å"New Negro†. The image of African-American’s changed from rural, uneducated â€Å"peasants† to urban, sophisticated, cosmopolites. Literature and poetry abounded. Jazz music and the clubs where it was performed at became social â€Å"hotspots†. Harlem was the epitome of the â€Å"New Negro†. However, things weren’t as sunny as they appeared. Many felt that the Harlem Renaissance itself wasn’t so much a celebration of Black culture, but rather a regurgitation of White ideals. To these African-Americans, the Harlem Renaissance represented conformity and s ubmission to the White culture. Yet there were also those who were not even given the opportunity to be a part of the Harlem Renaissance. The poor Blacks in the South never received any of the racial tolerance up north. They lived in a world of racism and the Ku Klux Klan. The Harlem Renaissance did not redefine African-American expression. This can be seen through the funding dependence on White Americans, the continued spread of racism and the failure to acknowledge the rights of poor Southern African-Americans.   Ã‚  Ã‚  Ã‚  Ã‚  Harlem provided a source of entertainment for many people. With its Jazz Clubs and poetry readings it was the â€Å"hip† place to be. This was a shock to many African-American’s, who had never before had the opportunity to perform in such affluent surroundings. Oftentimes funding for these clubs or programs was provided by White Americans. This in itself was not a problem. However, the Harlem Renaissance became so dependant on the funding that when it stopped coming, there was no means by which to keep any of the clubs or literary cafes open. Some clubs in Harlem even discriminated against Black audience members. The popular Cotton Club, which featured solely Black performers, even went so far as to ban African-Americans’ from its audience entirely. Even in the Mecca of supposed racial equality, these sorts of discrimination were still prevalent. Advertisements for products produced by African-Americans were also skewed. Para... ...  Ã‚  Ã‚  Ã‚  Ã‚  The Harlem Renaissance was a time of growth and development in for African-Americans. They wrote novels, performed in clubs, and created the genre of Jazz. However, the Renaissance was imprisoned by its flaws. Rather then celebrating the unique culture of African-American’s, it oftentimes catered to what the White Americans would want to see and hear. Although racism seemed to be lower in Harlem and the Northern states, for many Blacks racism was at all time high. The Ku Klux Klan reached membership of astronomical proportions. They marched on Washington DC and handed out membership cards bashing minorities. Less educated Blacks, or those who couldn’t make it to Harlem, were often deemed ignorant. There was a barrier built between those Blacks with an education, and those without. And when the Great Depression hit, African Americans lost their jobs at a rate almost triple that of White Americans. Where was the equality Harlem had fought so hard f or? The Harlem Renaissance, although it did achieve some remarkable things, did not redefine African American expression. That ideal, would take many more years of strife, struggle, and segregation to achieve.

Edward Said States

What Should I Write About? So you know which schools you’re interested in, and you’ve looked over the applications and read all the essay questions. Chances are you’re wondering, â€Å"What in the world should I write about? † You’re not alone. In fact, it is safe to assume that everybody who has ever had to write an essay for a college application has asked that very question. Unfortunately, the applications don’t give you much guidance. Most of the essay questions are so open-ended that you can write about virtually anything. Since this essay might be the most significant writing you’ve ever done, the freedom to choose a topic can be paralyzing. Although picking a topic will seem daunting at first, it’s not impossible. The key is to narrow your focus and write about something close to your heart. If you follow this plan, you’ll create a lively essay that shows the admissions committee your intelligence and personality. But finding a great topic is not something you can do in five minutes. It will take a little work. Essay Questions from the 2005 Common Application Evaluate a significant experience, achievement, risk you have taken, or ethical dilemma you have faced and its impact on you. Discuss some issue of personal, local, national, or international concern and its importance to you. Indicate a person who has had a significant influence on you, and describe that influence. Describe a character in fiction, an historical figure, or creative work (as in art, music, science, etc. that has had an influence on you and explain that influence. A range of academic interests, personal perspectives, and life experiences adds much to the educational mix. Given your personal background, describe an experience that illustrates what you would bring to the diversity in the college community, or an encounter that demonstrated the importance of diversity to you. Topic of your choice. Not-So-Common Essay Questions According to astronomer Carl Sagan, â€Å"Somewhere, something incredible is waiting to be known. What unknown would you like to see revealed in your lifetime? Why is this of personal importance? (Northwestern University) In The Moviegoer, a novel by Carolina alumnus Walker Percy, the narrator observes: â€Å"The search is what anyone would undertake if he were not stuck in the everydayness of his own life. . . . To become aware of the possibility of the search is to be onto something. Not to be onto something is to be in despair. † Are you â€Å"onto something† now? If so, what is that something, and why is it important to you? University of North Carolina) On Mars, the latest TV fad among the native lifeforms is Trading Bodies. You're picked to play. Whose body would you inhabit and why? (University of Virginia) Have you witnessed a person who is close to you doing something that you considered seriously wrong? Describe the circumstances, your thoughts, and how you chose to respond. If you discussed it with the person, was his/her justification valid? In retrosp ect, what, if anything, would you have done differently and why? Duke University) Do you believe there’s a generation gap? Describe the differences between your generation and others. (Denison University) What is your academic passion? (Wake Forest University) Prewriting: Think, Think, Think Early on—say, four or five months before applications are due—start thinking about possible topics. Go about your normal routine, but tuck the topic question in the back of your mind. Note what you’re interested in and appreciate in this world. Carry a notebook to jot down thoughts. Give it time, and chances are you’ll come up with some good stuff. If, on the other hand, you wait until the night before the application deadline to choose your topic, you’ll find yourself staring at your computer screen in a cold sweat, frantically wondering whether you should write about your love of the rainforest, that time you stole second base in junior high, or maybe, um, what your bedroom decor says about you. If you wait until the last minute, it’s highly unlikely that your essay will be a thing of beauty and interest. Choosing an essay topic takes time. Brainstorming Brainstorming is the process of getting your ideas and thoughts down on paper. Brainstorming doesn’t have to be logical or tidy—you can scribble down (or type) ideas in any way that makes sense to you. And don’t worry about editing as you brainstorm. No one is going to see this part of the process except you, so let the good ideas and the not-so-good ideas flow freely. When you’re brainstorming ideas for your college application essay, let your mind wander. Think about issues that matter to you; important moments in your life; high school experiences that stand out in your mind; and places and people that left an impression on you. Jot down emotions you often experience, verbs that mean something to you, and smells that bring back strong memories. Don’t limit yourself to happy experiences: Not all good stories are happy stories. Maybe one of your keenest memories is sitting and crying on the steps outside the school auditorium after you found out you didn’t make the varsity team. If a moment was meaningful and you can write with your emotions, your reader will feel connected to your story. The goal is to mine your life for a subject that will pour out instead of trickle. People brainstorm using different methods. Below, you’ll find explanations of several different methods. Maybe one method will do the trick for you, or maybe you’ll find a combination of methods works best. Make a List Many people prefer to use the straightforward list-making approach as a starting point. To use this method, simply jot down possible essay topics. After you have a long list, go back and pick out the most promising ideas. To get the ball rolling on your topic search, write down responses to the following: The 10 coolest places you’ve visited Your 10 most memorable high school experiences The 5 most difficult moments in your life The 5 most exciting moments The 3 most awkward moments Your 5 best accomplishments The top 5 words your parents, friends, or teachers would use to describe you The 5 most important influences on your life Your 5 favorite books Your 10 favorite activities Connect the Words If you think visually, you might want to brainstorm by writing a word or phrase in the middle of a blank piece of paper. Spend ten minutes looking at this word or phrase and writing down everything that comes to mind all over the page. Stop when your ideas stop flowing. Then circle or draw lines between ideas that are connected. Do this again with a new sheet of paper with a new word or with a word from your first list. Repeat as necessary. Draw a Timeline Here’s another visual brainstorming method: write a timeline of your life. Then go back and underline or highlight the high and low points. Also, note any other epiphanies or pivotal moments. Don’t worry if no single experience changed your life; that’s not usually how it works anyway. You can write a thoughtful essay about a change that happened over time, focusing on a particular incident to illustrate your point. Tell a Story from Your Life Pick a word that describes you and write it or type it at the top of a piece of paper. Then write down the title of five stories about yourself that you could tell to illustrate that word. Pick the title you like the most and write that at the top of a new piece of paper. List all the details you might include in that story. Imagine the smells, sights, and sounds that set the scene. Push yourself to come up with all possible details (you can always eliminate some later). Don’t stop until you have exhausted all possibilities. Free-Write Some writers call free-writing â€Å"the mind dump,† because it means dumping everything that comes into your head onto a piece of paper. To free-write, start with a vague idea, like why your favorite subject is French. For a period of ten or fifteen minutes, write down everything that comes to mind. Don’t worry about grammar, style, or making sense. Just keep writing. If you have nothing to say, just write I have nothing to say over and over again until something else pops in your head. When the ten or fifteen minutes are up, take a break and then go back and reread your words. Underline or highlight everything that is interesting or promising. Free-write as much as you can until you have a good crop of ideas.

Essay on Advertisement of Delicious Night - 1870 Words

The main purposes of advertising are: †¢ to inform the public about new products and services offered by a company †¢ To persuade people to buy these products or use the services offered. †¢ And to persuade or influence a desired action from the target audience. Advertising is a form of communication that attempts to persuade customers to purchase a particular product or service offered from brands. Many advertisements are designed to increase purchase of a product or the use of a service. There are many different methods to advertise. Most commonly used are: radio, leaflets, magazines, newspapers, internet and billboards. Brands use many different techniques to promote a product/service in order to notify a wider audience. In this†¦show more content†¦The models facial expression is expressed in a seductive manner which attracts men to the advert who could possibly purchase the fragrance for their girlfriend/wife; therefore men are the second target audience. The third target audience is people aged above 35 years who could buy the product for their families. The main image, of American supermodel Jessica Stam, is situated at the centre of the advertisement and used to promote the product. Jessica Stam has so far had a lucrative career which has included working alongside successful fashion designers and companies such as Victoria Secret, Marc Jacobs, Gucci and Anna Sui as well as appearing on Valentino. Jessica has appeared on the front cover of the UK’s and Germany’s edition of Vogue, (a highly successful fashion and life magazine), hence she is recognisable in Europe and the US therefore by using this particular model DKNY have aimed the advert at a larger audience. Jessica Stam is supporting a reflective sequined black backless dress which shows glamour emanating from her as the colour black is associated with glamour, elegancy and sophistication. 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