Executive Level Report - Financial Analysis of AMD Research Paper

Executive Level Report - Financial Analysis of AMD - Research Paper Example This report is structured in such a manner that first section of this report describes brief description of the company which includes its history, comparison of the company with its industry and the ratio analysis with some other financial indicators. Section two mainly describes the stock performance of the company which emphasizes upon the fluctuations in the share prices along with the earning and dividends analysis of AMD. Recommendation is the last section which briefly highlights as whether HTC should go for making long-term contracts with AMD or not in the light of financial analysis conducted above. Description of Company Advanced Micro Devices (AMD) is a listed entity in New York Stock Exchange (NYSE: AMD). The company started off its operations in 1969. The company mainly deals in semiconductor industry such that it manufactures microprocessors which are used in computers, mobile phones, tablets, gaming consoles, networks etc. Financial Ratio Analysis The best way to asses s the financial performance of any company is to make a financial analysis of the company through ratio analysis as it covers most of the parts of the financial statements in a very comprehensive and meaningful form. Under the following paragraphs, the ratio analysis of AMD is conducted in which the financial performance of AMD is analyzed and compared with that of the industry averages and its own previous years’ performance in respect of liquidity, profitability and efficiency of the company. Liquidity Analysis The current ratio describes as in order to pay a current liability of $1, how much current assets the company has. Overall, the current ratio of the company has increased from 1.07 to 2.15 i.e. it has become double in three years. The company still way behind from the industry average which has been around 3.4 in the last three years. If the stock is ignored from the current assets of the company, then the quick ratio of the company has also become quite strong incre ased from 0.64 to 1.65 such that it is heading toward the industry ratio of 1.84 quite smoothly. Leverage Analysis As far as the financial leverage of AMD is concerned, it can be observed that the financial leverage of the company has dropped from 14.01 to 4.9 in the 2009 and 2010. But the financial leverage of the industry is still quite high and moves around 15. The debt ratio of the company has decreased from 6. 56 to 2.16 which is a very good as the company has become less risky but still the company is quire risky as compared to the industry average which is still below 0.5 cumulatively in the three years. Efficiency Analysis Efficiency ratios mainly involve the movements of particular current assets and liabilities which include receivables, inventory and payables. The average collection period of the company has increased from 30 days to around 48 days in the last three years. The industry average revolves around 49 days. This suggests that the company’s performance ha s remained consistent with that of the industry. Inventory turnover of the company has also increased such that it has increased from 4.72 to 5.89, which is still lower than the industry averages of 7 to 8 turnovers per year in last three years. Profitability Analysis Profitability is the core area in which every stakeholder to the company is directly involved. Mainly three profitability ratios have been analyzed which are return on sales (net profit margin), return on assets and

A Study into the Process of Downsizing and Reengineering Essay - 2

A Study into the Process of Downsizing and Reengineering - Essay Example wnsizing and reengineering as well as practical applications need to stress total quality management (TQM), improvement of total level of strategic thinking, reengineering instead of downsizing whenever possible, process safety management (PSM), and other factors. Managing expert Geoffrey James argues that downsizing is one of the five stupid management concepts that should be cut from the management corpus (2010). â€Å"How, exactly, did the company get into a situation where it needed to fire people in order to remain competitive?†, James asks. Yes, markets can be unpredictable and things can change at the drop of a hat, but this is what management is for. Downsizing is a sign of company failure: It is a sign that the company did not anticipate the changing marketplace and grew too much or spent too much. Downsizing is passing the buck: Management failed, but workers pay the bill. When downsizing is required, CEOs should be fired, not improved. Reengineering needs to be conceptually separated from downsizing. Downsizing is almost by definition cutting down capital, particularly labor. It involves terminating peoples jobs, hurting resumes, economic dislocation and externalizing onto the system. But reengineering is a far more generic term. Reengineerings popularity has led to a backlash effect (Business Architects, 1999). It is often confused for downsizing, and thus has become negatively associated with the concept. Further, reengineering, unlike downsizing, can be conceptually â€Å"fuzzy† (Business Architects, 1999). Whats the bright line between reengineering and simply changing a companys strategic approach? If reengineering involves firing some people, isnt that downsizing? What if it merely involves some demotions, or some increases in responsibility without commensurate increases in pay? Nonetheless, reengineering is in fact very different from downsizing, and has unfortunately been falsely associated with do wnsizing when it is conceptually