GLO-BUS Quiz
The options that a company has for assembling enough cameras to meet peak-quarter order form retailers include
hiring "temporary" PATs, the use of overtime, and outsourcing assembly to contact assemblers.
The company's shipments of digital cameras to retailers in various foreign countries are subject to
import duties imposed by the countries to which the cameras are shipped and the effects of fluctuating exchange rates.
The interest rate a company pays on loans outstanding depends on
its credit rating.
The decisions that company co-manages make each year are organized around
marketing, product design, assembly/shipping, compensation and labor force, and finance.
A camera-maker's price competitiveness in a particular geographic region is determined by
whether its price is above or below the average price of all companies competing in that geographic region.
According to explanations provided on the Help screens for the Production Cost Report, if a company pays a PAT member a base wage of $18,000, a $60 quarterly bonus for perfect attendance, and annual fringe benefits of $2,500, if a PAT is paid a $1 incentive bonus per camera assembled, and if a PAT assembles 12,000 cameras per year (or 3000 cameras per quarter), than the annual compensation cost of a single PAT member and a fully-staffed PAT would be
$23,740 and $94,960.
According to the depreciation rates used by the company and described in the Production Cost Report, if a company adds 50 new workstations at a cost of $75,000 each and also spends $10 million for an addition to its assembly plant to accommodate the new workstations, than its annual depreciation costs will rise by
$550,000.
Assume a company's Income Statement for a given period has the following entries: Sales Revenues (50,000), Production Costs (26,500), Delivery Costs (1,600), Marketing Costs (8,500), Administrative Expenses (3,000), Operating Profit (13,400), Net Interest (750), Income Before Taxes (12,650), Taxes (3,795), Net Income (8,855). Based on the above income statement data, the company's operating profit margin and net profit margin are
26.8% and 17.7%.
Given the following Financial Statement Data: Sales Revenues (50,000), Operating Profit (14,400), Net Income (9,555), Total Current Assets (70,000), Total Assets (159,000), Total Current Liabilities (26,000), L-T Debt (43,000), Total Equity (91,400), Depreciation (4,000), Dividend Payments (2,250). Based on the above figures, the company's capital structure (defined as the sum of total debt outstanding and total stockholder's equity) consists of what percentages of debt and equity? (The percentages of total capital invested that are debt-financed and equity-financed are among the factors used to determine a company's credit rating, as explained in the Help section for the Comparative Financial Performances presented on p.7 of the GLO-BUS Statistical Review.)
32% debt and 685 equity or 32:68.
Which one of the following actions is usually a dependable and appealing way for managers to try to boost their company's EPS?
Achieve a differentiation-based competitive advantage over rivals in both the entry-level and multi-featured camera segments that company managers are savvy enough to sustain; as the market demand for digital cameras grows worldwide and the company exploits its competitive advantage to win additional sales, the profit margins from a growing sales volume of entry-level and multi-featured digital cameras typically results in increase in EPS.
Which of the following sets of actions are unlikely to help a company achieve a differentiation-based competitive advantage over some/many of its rivals that are marketing entry-level cameras?
Actions to raise the base pay of PAT members by 10% or more each year, charging prices for entry-level cameras that are $5 or more above any other company in that industry in all four geographic regions, and spending more on new product R&D per entry-level camera that is the highest in the industry (as reported on p. 5 of each issue of the GLO-BUS Statistical Review.)
The industry-low, industry-average, and industry-high benchmarks for camera costs and operating profits on pp. 5-6 of each issue of the GLO-BUS Statistical Review.
Are worth careful scrutiny by the managers of all companies because when the bench-marking data signals that a company's costs/operating profits for one or more of the benchmarks are clearly out-of-line (or unappealing), managers are well advised to take corrective action in the next decision round.
Which one of the following actions does NOT result in higher levels of PAT labor productivity in assembling cameras?
Avoiding contracting the assembly of cameras to outside suppliers/contractors.
Assume a company's Income Statement for a given quarter is as follows: Sales Revenues (50,000), Production Costs (26,500), Delivery Costs (1,600), Marketing Costs (8,500), Administrative Expenses (2,000), Operating Profit (14,400), Net Interest (750), Income Before Taxes (13,650), Taxes (4,095), Net Income (9,555). Based on the above data, which of the following statements is false?
Delivery costs are 2.8% of revenues and represent the company's smallest cost component.
Which of the following are the four geographic regions in which the company is selling its cameras?
Europe-Africa, Latin America, Asia-Pacific, and North America.
Which one of the following is NOT a way to improve the P/Q rating of a company's brand of multi-featured cameras?
Increasing the number of models in the company's line of multi-featured cameras.
Which of the following actions does not help make a company's brand of multi-featured cameras more competitive and attractive to buyers vis-a-vis the brands of rival firms?
Increasing total compensation of PAT members to boost their productivity in assembling multi-featured cameras.
Which of the following is NOT an action company co-managers can take to boost a sub-par ROE?
Issue additional shares of stock and use the proceeds to pay down the debt outstanding on the company's line of credit.
Which of the following is an action company co-managers should seriously consider in trying to improve the company's credit rating? You may wish to consult the discussion of the credit rating that appears on the Help screen for the Comparative Financial Performance page of the GSR in answering this question.
Issue additional shares of stock and use the proceeds to pay down the loans on the company's line of credit.
Which of the following most accurately describes your company's production/assembly operations?
Most all camera components are sources from outside suppliers having plants or distribution centers near the company's assembly facility; the company uses workstations staffed by 4-person teams to assemble cameras. In the most recent year, the current productivity of the assembly teams was 2,500 cameras per quarter or 10,000 per year. Some cameras are outsourced from contract assemblers that are paid a $25 fee for each camera assembled.
Which of the following are not measures on which a company's performance is judged/scored?
P/Q rating, dividend payments, revenues, market share, and total number of cameras sold, and balance sheet strength.
Which of the following is not an accurate description of the market for digital cameras?
Retailers get their cameras from camera-makers on a just-in-time delivery basis.
Which one of the following is an attractive and effective way to reduce the production costs of multi-featured cameras and help put the company in better position to achieve a low-cost competitive advantage over rival companies based on lower production and marketing costs per multi-featured camera sold?
Striving to keep the labor costs per camera assembled in-house to amounts that are well below the industry-average benchmark (as reported on p. 5 of each issue of the Glo-BUS Statistical Review).
The company maintains a production facility in
Taiwan.
Which of the following statements accurately describes the distribution of the company's unit sales across the four geographic regions in which it sells cameras?
The company sells 40% of its cameras its biggest region and sells only 10% of its cameras in its smallest region.
Which of the following ARE components of the compensation package for members of production assembly teams?
The dollar-cost of a PAT member's fringe benefit package, assembly quality incentives ($ per unit assembled divided equally among PAT members), year-end bonus for perfect attendance, and annual base wage
Which the following are not factors in determining a company's credit rating?
The size of the company's year-end cash balance, the average of its ROE for the past three years, and how many times the company has been put on credit watch.
Which of the following do not have a bearing in determining a company's unit sales and market share of entry-level or multi-featured cameras in a particular geographic region?
The size of the incentive bonus paid to PATs, the percentage of cameras that were outsourced, and warranty claims costs.
Which of the following currencies are involved in affecting the revenues your company receives on camera shipments to retailers in the four geographic regions of the world where it markets cameras?
U.S. dollars, Taiwan dollars, Singapore dollars, euros, and Brazilian real.
In which one of the following situations/circumstances is it most reasonable for a company to consider shifting away from pursuit of a strategy to strongly differentiate its multi-featured cameras from the multi-featured camera brands of rival companies and sell them at a premium price?
When the market for high-end multi-featured cameras is crowded with companies using more or less copycat differentiation strategies to try to out-compete one another, thus making it difficult for any of these companies to earn attractively high profits.
Consumer purchases of digital cameras are seasonal with
about 20% of consumer demand coming in quarter 1, 20% in quarter 2, 20% in quarter 3 and 40% in quarter 4.
One of the benefits of pursuing a strategy of social responsibility and corporate citizenship is
an enhanced image rating, provided company spending for socially responsible activities is meaningful and is sustained over a multi-year period.
The market for digital cameras is projected to grow
at 8-10% annually during the year 6-year 10 period and at 4-6% during the year 11-year 15 period.
If a company is being out-competed by various rival companies in the Europe-Africa market for multi-featured cameras and consequently has an unappealing low sales volume and market share in Europe-Africa, then company managers should
explore correcting most or all of the company's competitive weaknesses (shown at the bottom of the latest Competitive Intelligence Report for the Europe-Africa region); in addition, managers should initiate actions that they believe will result in the company having at least two important competitive strengths vis-a-vis its Europe-Africa rivals in the upcoming decision round.
A company's managers should give serious consideration to changing from a low-cost/low price strategy for multi-featured cameras to a different strategy in the multi-featured camera market when
so many other rival companies are marketing low-priced multi-featured cameras that intensive competition in the low-end multi-featured camera segment makes it quite difficult for every company competing for buyers of low-priced multi-featured cameras to capture big enough revenues and global market share to earn attractively large profits selling low-priced multi-featured cameras.
The most important/essential results from the latest decision round that company managers need to review/study in order to guide their strategic moves and decisions to improve their company's competitiveness and rank among the top-performing companies in the upcoming decision round are
the Quarterly Snapshot data in the top sections of the Competitive Intelligence Report that shows each company's competitive efforts (advertising, tech support, prices, P/Q ratings, promotions, models available, and so on) in each geographic region.
The factors that affect a company's P/Q rating for UAV drones include
the assembly quality incentives paid to drone PAT members, the company's prior-year brand reputation, and the prior year worldwide average warranty claim rate on the company's drones.
The factors that affect a company's P/Q rating include:
the caliber of core components; company's cumulative spending for new product R&D, engineering and design; the number of models; camera body ergonomics/durability; and the number of special utility features.
If a company earns net income of $40 million in Year 8, has 10 million shares of stock, pays a dividend of $1,50 per share, and has annual interest costs of $15 million, then
the company's EPS for Year 8 would be $4.00 and its retaining earnings for Year 8 would be $25 million (net income of $40 million less dividend payments of $15 million).
The factors that affect the productivity of both camera PATs and drone PATs include
the size of assembly quality incentives paid to camera/drone PATs, how favorably the overall size of the company's total compensation package (not including overtime pay) per camera/drone PAT member compares against the camera/drone all-company averages, and changes in the number of camera/drone models that have to be assembled.
The factors that affect the productivity of PATs include
the size of incentive bonuses to workers, base pay increases, perfect attendance bonuses, the size of the fringe benefits package, how favorably the overall size of a company's compensation package compares with the industry-average compensation package, expenditures for PAT training and productivity improvement, and changes in the number of models.
The company's present assembly plant has sufficient space for
up to 150 workstations, without expanding the size of the plant.
