I need help with this case study. Questions in part 1 and 2


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I need help with this case study. Questions in part 1 and 2 highlighted. Thanks . sunbeam case study.pdf ACG6175 – Final Examination Name Panther ID Number • There are TWO parts to this examination. Part 1 = 13 points. Part 2 = 7 points. Total = 20 points. • Write your answers in Standard English. • Separately label each of your answers. / 20 SUNBEAM COMPLETES RECORD YEAR FOR SALES, EARNINGS & GLOBAL EXPANSION DELRAY BEACH, FLORIDA JANUARY 28, 1998 – Sunbeam Corporation (NYSE:SOC) today announced record sales and earnings for its fourth quarter and full year 1997. Sales for the quarter were $338 million, reflecting a 30.6% increase over the prior year period on a comparable basis. Before the 1996 special charges taken by the Company to restructure and reposition Sunbeam, earnings per share (diluted) from continuing operations of $0.47 were $0.50 ahead of the loss of $0.03 reported in the fourth quarter last year. Including these charges earnings per share (diluted) rose $2.76 above the reported $2.29 loss reported in 1996. On a year to date basis, revenue of $1.168 billion was 22.4% above 1996 on a comparable basis. Albert J. Dunlap, Sunbeam’s Chairman and Chief Executive Officer, said "I am very proud of the dramatic turnaround that we have achieved at Sunbeam in such a short period of time as we continue to execute against our three year growth plans. Our continuous sales increases of 13%, 17%, 28% and 31% in the four quarters of 1997, for an overall sales increase of 22% for the year, are a clear indication that our strategy is working." The Company’s three year strategy to achieve $1 billion in revenue growth, which it embarked upon in 1997, was fueled by the addition of 25 international distribution/license agreements, the introduction of 35 new U.S. products and 54 new international products along with the contribution from 22 factory outlet stores. "We experienced sales growth in all major channels of distribution, in all regions of the world and in each of our five global businesses, and we gained market share in all of our key product categories, reversing a three year downward trend, " said Mr. Dunlap. Required: PART 1 – There are a number of interesting differences between Sunbeam’s 1997 and 1996 balance sheets (e.g., receivables increased by $82 million, inventories increased by $94 million, and pre-paid expenses decreased by $23 million, while long-term productive assets and liabilities remained relatively unchanged), and between its 1997 and 1996 income statements (e.g., during 1997 the company engaged in a number of "buy and hold" transactions, gross margin increased dramatically and SG&A declined). a. (maximum 7 points out of 13) – Adjust Sunbeam’s 1997 Earning before interest and taxes for one-time events and apparent (e.g., doubtful accounts, depreciation expense, and etc.) changes in accounting policy. Be careful to adjust for things done in 1996 that had a carry-over effect on 1997. You may want to compute some comparative ratios to facilitate your analysis. Be sure to provide the details of and clearly label any computations. b. (maximum 4 points out of 13) – Utilizing your adjusted numbers from 1)a. (above) re-compute Sunbeam’s operating cash flows for 1997 (i.e., compute a new cash flows amount based on your adjustments to the original data). Clearly label the components of your computations. c. (maximum 2 points out of 13) – Summarize your findings in 1)a. and 1)b. (above), paying particular attention to any evidence of fraud (be careful not to let 20-20 hindsight – i.e., information that you are aware of, but is not included in this case – influence your conclusions). SELECTED DATA FROM: SUNBEAM CORPORATION AND SUBSIDIARIES ANNUAL REPORT ON FORM 10-K GENERAL Sunbeam Corporation is a leading designer, manufacturer and marketer of branded consumer products. The Company’s primary business is the manufacture, marketing and distribut

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