Digestive System This 7 page paper addresses ten specific questions that pertain to a case study scenario. This case study describes a year-old business executive who presents with a dull pain located behind his sternum. The details of this scenario suggest hiatal hernia as the cause of his pain, the laboratory tests that influenced this diagnosis and recommended treatment. Bibliography lists 11 sources.
The company produces quality beer and has won awards over the years and is owned entirely by 16 uncles, aunts and cousins. InDeutsche Brauerei expanded into Ukraine. Furthermore, most of the unit growth in sales during that time period was also contributed by Ukraine.
In an attempt to market the beer even more aggressively, Lukas hired Oleg Pinchuk, a marketing guy who understood the Ukrainian markets and had previous experience of marketing beer for a major Ukrainian beer producer.
In the following report, we aim to evaluate the past and prospective financial performance of the company, dividend policy and to critique its liberal credit and inventory policies.
An appropriate compensation scheme will also be recommended. Adoption of a Compensation Scheme for Oleg Pinchuk It Case analysis deutsche brauerei our belief that Oleg Pinchuk does deserve an increase in his compensation package to provide incentive for him to stay and provide future results.
We are also concerned that some of his current policies may not be profitable and are taking on too much risk as the economy shows signs of a recession. Also, we highly recommend that the design of the compensation package be changed as it currently creates a large agency problem.
Previously Pinchuk has worked for a major beer producer in the Ukraine giving him invaluable insight into the industry and environment. The challenge is getting people to try it and getting into a distribution pipeline. Initially inUkraine had no beer distributors, presenting a large problem — the company had no means of distributing the product amongst ustomers.
Distributors in the Ukraine had no capital and could not receive financing from banks to set up their business because they had no collateral, low profits, negative cash flows and were seen as a high risk. They were also not able to bear the credit terms that were currently implemented on the German distributors.
Pinchuk, on a small budget, managed to organise five distributors and set up warehouse arrangements. These strategies have increased customers in the Ukraine from 0 towith even more expected in Particularly in accounts receivable where days in receivables is nearly 90 days.
Exhibit 3 shows our adjusted analysis of the return that the business is receiving after taking into account changes in inventories and capital expenditure. These assumptions are explained in the exhibit.
Notably, these investments are risky and the company needs to compare the return to their risk adjusted cost of capital for the Ukraine and not the cost of financing the debt to see if it is worthwhile.
Although sales growth has been consistently large, operating profit margin has decreased overall since his strategies were implemented.
Return on equity and net assets have increased and in the year were This is a good result for the business and shows efficient management of assets.
It is our belief that the credit policy should not be relaxed and could even be tightened to less than 80 days. Unfortunately, reducing risk by tightening the policy would be accompanied by a decrease in sales.
His current compensation package is a base salary of EUR40, plus an incentive payment of 0. The current compensation package provides Pinchuk with an incentive to pursue projects that are risky to the company like extending large credit to distributors who are unable to pay it back.
This would increase sales, thus increasing his salary, but would have a negative effect on both profits and the company. His incentive payment needs to be aimed more at collection and profits rather than sales growth. Our recommendation is to increase his base salary to EUR50, and have his incentive payment tied to annual profits 0.
However, in our recommended financial plan forthere is a projected net profit of EUR 2, This is a decrease in profits from the previous year and would imply that Pinchuk would receive no incentive payment for At the moment, the company has a cash shortage as it is holding high levels of inventory and is extremely relaxed in credit terms for their Ukrainian distributors.
This would add strain on the already huge short-term debt that they have taken on. The possibility of a financial downturn in adds to the uncertainty of an increase in profits as projected in the financial plan.
Guaranteeing that the company will pay out EUR, in dividends might be too risky.
Rather than rely on more bank borrowings, Deutsche Brauerei should retain more earnings to cover their bank borrowings and to also finance their future investments and projects.- Deutsche Braueri I. Introductory Paragraph Deutsche Brauerei has been a family owned and operated corporation for 12 generations, which has created a high level of focus and control.
Each generation has kept the management and operations processes relatively simple, centered on . Case Deutsche Brauerei had been largely on the production side of the brewery, where he had risen to the position of brewmaster before assuming general management of the company upon the retirement.
methodologies for financial analysis and opportunities for practice through case the analysis and discussion of cases is very useful because it teaches students how to use the principles of finance to define and analyze problems, work as a • Deutsche Brauerei.
4. Deutsche Brauerei Case Study-What accounts for the rapid growth in recent years.
DEUTSCHE BRAUEREI Presented by Audrey-Inès Keou Choukri Boutaina Agenda Company Overview Expansion to Ukraine Marketing Strategy Financial Plan for and.
Case Studies in Finance "Managing for Corporate Value Creation" Robert F. Bruner Case Study Solution Deutsche Brauerei Forecasting and policies regarding growth D iamond Chemical Management Flexibility Option Donaldson Lufkin & Jenrette Initial public offering for a mature firm Enron Weather Derivatives.