Sales to Working Capital - measures the relationship between sales and the working capital of a business. Too high a ratio may indicate an insufficient amount of working capital. Too low a ratio may indicate unproductive assets.
Sales to Total Assets - measures the ability of a business to use assets productively. This ratio may be indicating conditions of excess capacity, inefficient or obsolete equipment, or temporary changes inn demand.
Bertelsmann appears to be healthy in terms of short-term liquidity. The Acid Test Ratio is normal for companies of this size and the Current Ratio is higher than normal and indicates that the company should have no trouble meeting short-term financial commitments. The capital structure ratios also appear to indicate that the company is able to finance operations, but does not have too large exposure in terms of debt. The Return on Assets and Return on Investment are also strong, although there was a downturn in 2003. This was most likely due to higher interest expenses and a charge for amortization of goodwill.
The Gross Margin appears extremely high, but this is due to the nature of the business. Bertelsmann does not have a large cost of goods sold. Because it is partially a service business, a large part of operating expenses are personnel costs. Operating Profits to Sales and Net Income to Sales Ratios are within norms, although the increased expenses in 2003 are reflected by the 1.2% Net Income to Sales Ratio. The Sales to Cash Ratio indicates that Bertelsmann may be holding an excess amount of cash, providing little or no return. The other asset utilization ratios are within industry norms, further highlighting the large amount of cash on hand.
Other Factors in Assessment of Company's Health
Bertelsmann is a complete media company encompassing books, newspapers, magazines, music, television, movies and radio. It is well-known for its music labels, such as Arista and Columbia, and the publishing houses, Random House, Dell, Doubleday and Ballatine. Less well-known to Americans are the television and radio networks and the extensive list of newspapers and magazines in Europe, but they are a core part of the business. It also includes some holdings which seem unusual, such as Dynamic Graphic Finishing, which provides foil stamping, embossing, die-cutting, and related graphic arts services. Another holding somewhat out of the mainstream of the media business is the investment in Arvato Mobile, a European cell phone provider. Arvato Services has also purchased the majority of shares in Phone Assistance, a Moroccan Call Center Services provider with operations in Morocco, India, Poland, Ireland and Turkey.
Probably the most significant recent development within Bertelsmann has been the 2004 merger of BMG with Sony Music Entertainment. This venture includes some of the most important labels in the music business and has a stable of many of today's most prominent artists. It also includes an archive of works from such artists as Miles Davis, the Byrds, John Denver, Johnny Cash, Robert Johnson, Janis Joplin, Barry Manilow, Louis Armstrong, Dolly Parton,...
Managing All Stakeholders in the Context of a Merger Process Review of the Relevant Literature Types of Mergers Identifying All Stakeholders in a Given Business Strategic Market Factors Driving Merger Activity Selection Process for Merger Candidates Summary, Conclusion, and Recommendations The Challenge of Managing All Stakeholders in the Context of a Merger Process Mergers and acquisitions became central features of organizational life in the last part of the 20th century, particularly as organizations seek to establish and
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