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. What would you like to do?
First, I would like to go through the financial mission and strategies, which are to:
The policies we followed to attain the mission were through 1) careful monitoring of costs throughout the company’s value chain 2) consistent anticipation of the firm’s cash flow needs allowing us to make strategic decisions, and then finally 3) we monitored performance through key indicators such as return on assets, return on equities, and return on sales
Next I will discuss some key evaluations
Profits – Overall, Roku6 cautiously expanded capacities. Although this conservativeness paid off in the beginning, the competition became much more aggressive later on. In both plants, the scale of entry was small and profitability was high at first, as you can see in the first 4 quarters of 2009. The blue bars represent Roku6’s profit and the redlines represent the industry average. As time progressed however, profitability of the firm remained average while other firms began to realize far greater returns, but our company’s cumulative profits did beat the industry average.
Next, I will discuss our earnings per share and our stock price.
In the first chart which displays our company’s earnings per share, you will see an identical trend as you did in profits. The blue bars represent our company’s earnings per share and the red line represents the industry average. Earnings per share sharply rose in the last 4 quarters as we increased dividends and re-purchased shares of stock.
In the bottom chart, the blue bars represent our company’s profits and the red line represents our stock price by quarter. Stock price steadily declined, but you can see in the final quarter that the trend was beginning to change as our earnings started improving.
Next I will discuss ROA and ROE, and in these next two charts, the red lines represent the industry average.
After the initial expansion and investments in automation, Roku6 began to use their excess cash in 2010 more efficiently to create greater earnings. Once Roku6 invested in short-term investments, ROA rose from 0.25% in the second quarter, to 5.09% in the third to 6.78% in the final quarter of 2010.
In second chart, you can see our return on equities increased as our retained earnings also increased.
Now I will shift into future strategies
COGS were reduced as a percentage of sales from 61.1% in 2008 to 49.1% in 2009 to 46.1% in 2010. We project the cost of goods sold to continue declining as Roku6 moves towards full automation, invests heavier in quality control training, and achieves overall increased efficiency.
A continued positive and rapid growth is expected at Roku6 as the strategy will be less conservative and aggressive in order to achieve higher profitability. Expansion of the United States operation and higher automation to achieve greater economies of scale in both factories will be pursued to lower costs. Improvements in financial ratios will also be a primary focus for the future through better utilization of cash and assets. Finally, higher dividend payouts and anticipated rise in stock price combined will make Roku6 a leader in profitability in the industry.
These future strategies will significantly boost our firm’s profitability in 2011.
What would you like to do?
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