Advanced Technologies

1.In view of the uneven growth in sales, inventories, receivables and fee in the past, were Michaels fiver year forecasts useful? mend dogmatic growth rates of the above measures were uneven, if we look carefully, well-nigh of the bring out ratios have remained fair constant with the exception of 1997. As we cigarette see from the chart below, inventories and receivables as a % of gross tax revenue remained plum constant from 1993 through 1996, and both increased intimately in 1997. The increase in 1997 can be explained by the weaker than expected requisite in late 1996 which caused eld root word to rise combined with requests from customers for extended payment terms which caused Accounts Receivables age to rise in 1997. Return on Sales or Profit Margins increased in 1995 and 1996, before reducing in 1997. The increase in 1995 and 1996 was caused by trim cost of goods sold, R&D and SG&A expenses as a % of Sales. However, as investments in R&D, SG&A and COGS pro ved too optimistic for ask in 1997, Return on Sales lessen so reducing Earnings. A similar graph for 1998 through 2002 shows that Michael has untilled Accounts Receivables and Inventories pretty unconstipated and approximately at the same offer as a % of Sales as in the await 5 years. And Return on Sales stays perk up at the highs of 6% achieved during 1995.

One of the key assumptions in Michael forecasts for the undermentioned 5 years is the 20% YoY growth in sales. snap off that the semiconductor equipment effort grew 52% between 1993 and 1996, and that the semiconductor diligence seems p oised for a rebound in 1998, a 20% YoY growt! h in sales of semiconductor equipment seems a fair good assumption. Whether ATI is financially capable of sustaining that level of growth is a different question. Thus Michael has kept the operational fundamentals fairly constant, while proposing small reductions in COGS, R&D and SG&A to become more profitable. He has also proposed a reduced exposure to leverage. Overall, his forecasts...If you want to get a full essay, rate it on our website: OrderCustomPaper.com

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