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Monmouth, Inc. (Brief Case) – Case Solution

Monmouth, Inc. is one of the leading producers of engines and massive compressors. The company is looking into acquiring the Robertson Tool Company and the value and form that the acquisition should take.

​Thomas R. Piper and Heide Abelli Harvard Business Review ( 4226-PDF-ENG ) July 31, 2010

Case questions answered:

• If you were Mr. Vincent, would you try to gain control of Robertson Tool? In other words, is the Robertson Tool Company a good strategic fit for Monmouth, Inc.?
• How much can Monmouth afford to pay for the Robertson Tool Company? Using the information provided in the case, value the Robertson Tool Company using the WACC method. Make sure to clearly label and explain all calculations.
• Is the above valuation reasonable? Answer this question in two parts: First, consider alternative cash flows and re-calculate the value of the Robertson Tool Company. Make sure to explain why these alternative cash flows make sense, given the case setting. Second, estimate the sales growth and operating performance that would result in a value of $50 per Robertson share, the price Simmons has stated as sufficient. Assess and discuss this scenario.

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Monmouth, Inc. (Brief Case) Case Answers

This case solution includes an Excel file with calculations.

Overview – Monmouth, Inc. (Brief Case):

In this report, we will analyze Monmouth, Inc.’s position in the heavy equipment and machinery industry. Next, we will state the key issues as well as sub-issues that must be addressed. Then, we will provide a summary of our analysis of whether to invest in the Robertson Tool Company (RTC).

About Monmouth Inc.

Monmouth Inc. is one of the leading producers of engines and massive compressors. However, this industry is heavily dependent on sales in the oil and gas industry, known to have violent earnings fluctuations. Monmouth must diversify to protect its stock price. This need leads to Monmouth’s current acquisitions of several companies. These efforts were not entirely successful.

The acquisitions broadened Monmouth’s market but still left it highly sensitive to general economic conditions. In the past, Monmouth was interested in acquiring RTC, but all of its acquisitions have not reached their intended results.

Now, however, RTC is in the middle of an acquisition fight that could provide Monmouth with an opportunity to gain control without a hostile takeover.

About Robertson Tool Company

RTC is one of the largest domestic manufacturers of cutting & edge hand tools. In this industry, it is a leader in two main product areas: clamps and vises, scissors, and shears. RTC has had relatively poor sales and profit performance in recent years; RTC’s annual sales growth of 2% has been behind the industry growth rate of 6% per year.

One of RTC’s greatest assets is its distribution network, which includes 140 local sales representatives and reaches overseas to 137 countries. The company seems to have all the necessary strengths to fully exploit the 6%-7% annual sales growth industry average. However, it lacks financial strength.

Current Situation Regarding the Hostile Takeover of RTC by Other Companies

The “Simmons Company” acquired 44,000 shares of Robertson stock in 2000 and has been an attentive stockholder ever since. In 2003, Simmons informed Robertson management of its plan to tender immediately for 437,000 of Robertson’s 584,000 outstanding shares at $42 per share in cash.

Robertson’s management was alarmed. It was feared that Simmons’s quest for higher profits might lead to aggressive cost-cutting and the elimination of marginal product lines. On the other hand, Monmouth was willing to make such an offer if Robertson’s management and directors would commit themselves to it now. Monmouth’s efforts didn’t work out.

After that, the NDP Corporation entered the battle. This battle between Simmons and NDP seemed to provide Monmouth with an unexpected second opportunity to gain control of Robertson.

A merger of Monmouth and RTC could allow Simmons to convert its shares into the common stock of Monmouth. For the same reason, Simmons tentatively agreed to support this merger on the condition that the price is at least $50 for each RTC share it held.

The Critical Decision

Main issue: Should Monmouth acquire RTC? If so, at what price and in what form the offer should the offer take?

• Is RTC a strategic fit for Monmouth, Inc.?
• What is the value of the firm?
• How much risk can we bear?
• Is Simmons’ offer reasonable?

I. RTC as a Strategic Fit for Monmouth

RTC is a strong strategic fit for Monmouth for two key reasons: 1.) the two firms can complement one another in a way that leverages each other’s strengths and mitigates weaknesses; 2.) RTC fits Monmouth’s criteria well, especially compared to the experiences with previous acquisitions.

Analysis of RTC’s current situation:

Current Weaknesses of RTC:

RTC has been conservative in its accounting and financial policies and has had a history of poor sales & profit performance. Its profit margin is one-third of other competitors, and the annual sales growth is 2%, behind the industry growth rate of 6% per year.

The stock is at its lowest, far below the book value of 53 USD per share. The stock has only been appealing for its dividend yield. Investors are hoping for a stock price increase, which is pressuring management and the Robertson family, as they have only a 20% stake in RTC, so it is hard for them to introduce any major strategic changes.

Unexploited strengths of RTC:

RTC is the largest manufacturer of cutting-edge hand tools and a leader in two main product areas: it controls 50% of the market of clamps and vises and 9% of the market of scissors and shears.

One of RTC’s greatest assets is its distribution network, with 48 salesmen and 28 sales engineers who can reach up to 2100 wholesalers in contact with 15000 retail outlets in the US and Canada.

With its heavy advertising and promotion program, RTC can also leverage its 140 sales representatives to reach 137 different countries to sell its products.

Strategic Opportunities:

Currently, there is a battle between Simmons and NDP for the control of RTC. RTC prefers to make a deal with Monmouth since they are at risk with others whom they suspect will overhaul their business model and simply focus on cost-cutting and the bottom line.

The Robertson family and the managers share the long-term vision that Monmouth has. They both have a long-term strategic interest in the firm instead of divestiture, like the NDP’s intentions. For example, here is the potential that Monmouth sees in RTC:

They are reducing costs of goods sold (CoGS), reducing sales & administrative costs (S&A), increasing market share, and increasing sales using the efficient distribution network to distribute their products. Also, the sales of Monmouth’s towards industrial (75%) and consumer market (25%) are perfectly in opposite proportion for Robertson.

Respective the diversification criteria set by Monmouth to acquire other companies:

• Major player : RTC has the full potential but lacks in realization. Better management could bring the company to its fullest, bringing it to its comparable peers (6% growth annually)
• Industry stable, broad market, product line for small-ticket items : The industry of hand tools is fairly stable (not volatile like oil-related products). Also, the market is broad enough, serving 137 countries and 15000 retail stores only in the USA and Canada. Products are indeed small ticket items.
• Only leading companies in their respective market : The company lacks financial figures, but the competitive strengths are present. Robertson is a leader in the clamps and vises (50% market share) market and 3rd in the scissors and shears market (9% market share). Monmouth, together with the acquisition of Dessex and Kroll, would eventually strengthen its position.

II. Valuation of Robertson from a Monmouth perspective

How much Monmouth should pay for RTC shares in full and in part was solved with a DCF model. To obtain the calculation for RTC’s company value to discount the free cash flow to the firm in a post-acquisition scenario from 2003 to infinity using RTC’s WACC as a discount rate.

First, to accomplish this model, several assumptions needed to be made. They will be mentioned as they arise in the calculations. From the years 2003 to 2006, information was forecasted in detail by the management of Monmouth. For the years remaining, the same figures that were used in 2007 were held constant, as predicting changes in value becomes less possible over time due to uncertainties.

Based on this, the valuation was divided into six steps:

• Determination of future sales
• Determination of future expenses
• Calculation of profit after tax
• Calculation of free cash flow to the firm
• Calculation of the WACC
• Calculation of Monmouth company value and fair share price

1. For the determination of future sales, Monmouth’s management used the proforma figures they prepared . These figures were based on the actual figures of 2002, with an applied growth rate of 6% (which corresponds to the industry average) from 2003 to 2006.

From 2007 to infinity, the same figure as in 2006 is used. This perspective includes Monmouth’s view that they will be able to exploit RTC’s strengths after the acquisition.

2. RTC’s future expenses, namely costs of goods sold (CoGS), selling and administrative expenses (S&A), and depreciation, are also based on the proforma figures.

This perspective includes Monmouth Inc.’s view that they will be able to…

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Product Description

Publication Date: July 31, 2010

Source: HBS Brief Cases

The management of Monmouth Inc. is considering whether to acquire the Robertson Tool Company and the value and form that the acquisition should take. Value can be assessed using a variety of approaches including a DCF with WACC analysis, impact on EPS and market multiples. The case also requires the student to consider how the offer should be designed and implemented. Subjects Include: Acquisition, DCF Analysis, Market Multiples Analysis, Revenue Forecasting, Margin Improvement, Valuation, EPS Analysis, Stock Offer, Weighted Average Cost of Capital, and Bidding Contest.

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EMBA Pro case study solution for Monmouth, Inc. (Brief Case) case study

At EMBA PRO , we provide corporate level professional case study solution. Monmouth, Inc. (Brief Case) case study is a Harvard Business School (HBR) case study written by Thomas R. Piper, Heide Abelli. The Monmouth, Inc. (Brief Case) (referred as “Monmouth Eps” from here on) case study provides evaluation & decision scenario in field of Finance & Accounting. It also touches upon business topics such as - Value proposition, Financial analysis, Financial markets, Forecasting, Mergers & acquisitions, Negotiations. Our immersive learning methodology from – case study discussions to simulations tools help MBA and EMBA professionals to - gain new insight, deepen their knowledge of the Finance & Accounting field, and broaden their skill set.

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Case Description of Monmouth, Inc. (Brief Case) Case Study

The management of Monmouth Inc. is considering whether to acquire the Robertson Tool Company and the value and form that the acquisition should take. Value can be assessed using a variety of approaches including a DCF with WACC analysis, impact on EPS and market multiples. The case also requires the student to consider how the offer should be designed and implemented. Subjects Include: Acquisition, DCF Analysis, Market Multiples Analysis, Revenue Forecasting, Margin Improvement, Valuation, EPS Analysis, Stock Offer, Weighted Average Cost of Capital, and Bidding Contest.

Case Authors : Thomas R. Piper, Heide Abelli

Topic : finance & accounting, related areas : financial analysis, financial markets, forecasting, mergers & acquisitions, negotiations, what is the case study method how can you use it to write case solution for monmouth, inc. (brief case) case study.

Almost all of the case studies contain well defined situations. MBA and EMBA professional can take advantage of these situations to - apply theoretical framework, recommend new processes, and use quantitative methods to suggest course of action. Awareness of the common situations can help MBA & EMBA professionals read the case study more efficiently, discuss it more effectively among the team members, narrow down the options, and write cogently.

Case Study Solution Approaches

Three Step Approach to Monmouth, Inc. (Brief Case) Case Study Solution

The three step case study solution approach comprises – Conclusions – MBA & EMBA professionals should state their conclusions at the very start. It helps in communicating the points directly and the direction one took. Reasons – At the second stage provide the reasons for the conclusions. Why you choose one course of action over the other. For example why the change effort failed in the case and what can be done to rectify it. Or how the marketing budget can be better spent using social media rather than traditional media. Evidences – Finally you should provide evidences to support your reasons. It has to come from the data provided within the case study rather than data from outside world. Evidences should be both compelling and consistent. In case study method there is ‘no right’ answer, just how effectively you analyzed the situation based on incomplete information and multiple scenarios.

Case Study Solution of Monmouth, Inc. (Brief Case)

We write Monmouth, Inc. (Brief Case) case study solution using Harvard Business Review case writing framework & HBR Finance & Accounting learning notes. We try to cover all the bases in the field of Finance & Accounting, Financial analysis, Financial markets, Forecasting, Mergers & acquisitions, Negotiations and other related areas.

Objectives of using various frameworks in Monmouth, Inc. (Brief Case) case study solution

By using the above frameworks for Monmouth, Inc. (Brief Case) case study solutions, you can clearly draw conclusions on the following areas – What are the strength and weaknesses of Monmouth Eps (SWOT Analysis) What are external factors that are impacting the business environment (PESTEL Analysis) Should Monmouth Eps enter new market or launch new product (Opportunities & Threats from SWOT Analysis) What will be the expected profitability of the new products or services (Porter Five Forces Analysis) How it can improve the profitability in a given industry (Porter Value Chain Analysis) What are the resources needed to increase profitability (VRIO Analysis) Finally which business to continue, where to invest further and from which to get out (BCG Growth Share Analysis)

SWOT Analysis of Monmouth, Inc. (Brief Case)

SWOT analysis stands for – Strengths, Weaknesses, Opportunities and Threats. Strengths and Weaknesses are result of Monmouth Eps internal factors, while opportunities and threats arise from developments in external environment in which Monmouth Eps operates. SWOT analysis will help us in not only getting a better insight into Monmouth Eps present competitive advantage but also help us in how things have to evolve to maintain and consolidate the competitive advantage.

- Experienced and successful leadership team – Monmouth Eps management team has been a success over last decade by successfully predicting trends in the industry.

- Strong Balance Sheet – The financial statement of Monmouth Eps looks strong and will help the company going forward.

- Low profitability which can hamper new project investment – Even though Monmouth Eps financial statement is stable, but going forward Monmouth Eps 5-7% profitability can lead to shortage of funds to invest into new projects.

- Little experience of international market – Even though it is a major player in local market, Monmouth Eps has little experience in international market. According to Thomas R. Piper, Heide Abelli , Monmouth Eps needs international talent to penetrate into developing markets.

Opportunities

- Developments in Artificial Intelligence – Monmouth Eps can use developments in artificial intelligence to better predict consumer demand, cater to niche segments, and make better recommendation engines.

- Increase in Consumer Disposable Income – Monmouth Eps can use the increasing disposable income to build a new business model where customers start paying progressively for using its products. According to Thomas R. Piper, Heide Abelli of Monmouth, Inc. (Brief Case) case study, Monmouth Eps can use this trend to expand in adjacent areas Financial analysis, Financial markets, Forecasting, Mergers & acquisitions, Negotiations.

- Customers are moving toward mobile first environment which can hamper the growth as Monmouth Eps still hasn’t got a comprehensive mobile strategy.

- Age and life-cycle segmentation of Monmouth Eps shows that the company still hasn’t able to penetrate the millennial market.

Once all the factors mentioned in the Monmouth, Inc. (Brief Case) case study are organized based on SWOT analysis, just remove the non essential factors. This will help you in building a weighted SWOT analysis which reflects the real importance of factors rather than just tabulation of all the factors mentioned in the case.

What is PESTEL Analysis

PESTEL /PEST / STEP Analysis of Monmouth, Inc. (Brief Case) Case Study

PESTEL stands for – Political, Economic, Social, Technological, Environmental, and Legal factors that impact the macro environment in which Monmouth Eps operates in. Thomas R. Piper, Heide Abelli provides extensive information about PESTEL factors in Monmouth, Inc. (Brief Case) case study.

Political Factors

- Little dangers of armed conflict – Based on the research done by international foreign policy institutions, it is safe to conclude that there is very little probability of country entering into an armed conflict with another state.

- Political and Legal Structure – The political system seems stable and there is consistency in both economic policies and foreign policies.

Economic Factors

- According to Thomas R. Piper, Heide Abelli . Monmouth Eps should closely monitor consumer disposable income level, household debt level, and level of efficiency of local financial markets.

- Foreign Exchange movement is also an indicator of economic stability. Monmouth Eps should closely consider the forex inflow and outflow. A number of Monmouth Eps competitors have lost money in countries such as Brazil, Argentina, and Venezuela due to volatile forex market.

Social Factors

- Leisure activities, social attitudes & power structures in society - are needed to be analyzed by Monmouth Eps before launching any new products as they will impact the demand of the products.

- Consumer buying behavior and consumer buying process – Monmouth Eps should closely follow the dynamics of why and how the consumers are buying the products both in existing categories and in segments that Monmouth Eps wants to enter.

Technological Factors

- Proliferation of mobile phones has created a generation whose primary tool of entertainment and information consumption is mobile phone. Monmouth Eps needs to adjust its marketing strategy accordingly.

- Artificial intelligence and machine learning will give rise to importance of speed over planning. Monmouth Eps needs to build strategies to operate in such an environment.

Environmental Factors

- Environmental regulations can impact the cost structure of Monmouth Eps. It can further impact the cost of doing business in certain markets.

- Consumer activism is significantly impacting Monmouth Eps branding, marketing and corporate social responsibility (CSR) initiatives.

Legal Factors

- Health and safety norms in number of markets that Monmouth Eps operates in are lax thus impact the competition playing field.

- Property rights are also an area of concern for Monmouth Eps as it needs to make significant Financial analysis, Financial markets, Forecasting, Mergers & acquisitions, Negotiations infrastructure investment just to enter new market.

What are Porter Five Forces

Porter Five Forces Analysis of Monmouth, Inc. (Brief Case)

Competition among existing players, bargaining power of suppliers, bargaining power of buyers, threat of new entrants, and threat of substitutes.

What is VRIO Analysis

VRIO Analysis of Monmouth, Inc. (Brief Case)

VRIO stands for – Value of the resource that Monmouth Eps possess, Rareness of those resource, Imitation Risk that competitors pose, and Organizational Competence of Monmouth Eps. VRIO and VRIN analysis can help the firm.

What is Porter Value Chain

Porter Value Chain Analysis of Monmouth, Inc. (Brief Case)

As the name suggests Value Chain framework is developed by Michael Porter in 1980’s and it is primarily used for analyzing Monmouth Eps relative cost and value structure. Managers can use Porter Value Chain framework to disaggregate various processes and their relative costs in the Monmouth Eps. This will help in answering – the related costs and various sources of competitive advantages of Monmouth Eps in the markets it operates in. The process can also be done to competitors to understand their competitive advantages and competitive strategies. According to Michael Porter – Competitive Advantage is a relative term and has to be understood in the context of rivalry within an industry. So Value Chain competitive benchmarking should be done based on industry structure and bottlenecks.

What is BCG Growth Share Matrix

BCG Growth Share Matrix of Monmouth, Inc. (Brief Case)

BCG Growth Share Matrix is very valuable tool to analyze Monmouth Eps strategic positioning in various sectors that it operates in and strategic options that are available to it. Product Market segmentation in BCG Growth Share matrix should be done with great care as there can be a scenario where Monmouth Eps can be market leader in the industry without being a dominant player or segment leader in any of the segment. BCG analysis should comprise not only growth share of industry & Monmouth Eps business unit but also Monmouth Eps - overall profitability, level of debt, debt paying capacity, growth potential, expansion expertise, dividend requirements from shareholders, and overall competitive strength. Two key considerations while using BCG Growth Share Matrix for Monmouth, Inc. (Brief Case) case study solution - How to calculate Weighted Average Market Share using BCG Growth Share Matrix Relative Weighted Average Market Share Vs Largest Competitor

5C Marketing Analysis of Monmouth, Inc. (Brief Case)

4p marketing analysis of monmouth, inc. (brief case), porter five forces analysis and solution of monmouth, inc. (brief case), porter value chain analysis and solution of monmouth, inc. (brief case), case memo & recommendation memo of monmouth, inc. (brief case), blue ocean analysis and solution of monmouth, inc. (brief case), marketing strategy and analysis monmouth, inc. (brief case), vrio /vrin analysis & solution of monmouth, inc. (brief case), pestel / step / pest analysis of monmouth, inc. (brief case), swot analysis and solution of monmouth, inc. (brief case), references & further readings.

Thomas R. Piper, Heide Abelli (2018) , "Monmouth, Inc. (Brief Case) Harvard Business Review Case Study. Published by HBR Publications.

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Monmouth Inc. Harvard Case Solution & Analysis

Home >> Finance Case Studies Analysis >> Monmouth Inc.

Question No. 1:

If you were Mr. Vincent, would you try to obtain control of Robertson Inc. in May 2003?

After careful evaluation and analysis if I were Mr. Vincent, I would try to obtain control of Robertson Inc. in May 2003. The reasons behind this decision are based on both qualitative and quantitative measures. Since, Monmouth Inc. has been one of the leading producers of the electrical appliances and utilities in the industry of Oil and Gas.

monmouth inc case solution

The management was very much concerned about the vulnerability and volatility in this nature of business and was thinking to bring diversification in its business to avoid heavy dependency over oil and gas industry. For this reason, Robertson Tool Company appeared to be a very feasible investment opportunity in terms of the Net Present Value and the Multiples.

On the other hand, Robertson Tool Company was facing serious crisis in terms of sales growth, profit performance in the recent years and a very low percentage of inventory held by the family members and the members, but the things which made Robertson Tool Company most competitive and interesting was that the company was one of the leading local manufacturers of edge and cutting hand tools and was also the leader in its two core product areas. Both of the above abilities and plus points were not previously translated by the family owned management of the company.

It held around 50% share of the $75 million market for vises and clamps. On the bright side, Robertson Tool Company also has the reputation for high quality products in the mind of the customers and has an ability to grow its revenues by current 2% of industry averaged growth of around 6%.

The company was also in favorable conditions in terms of the distribution function as the distribution area was one of the main functional areas of the Monmouth Incorporation. Robertson Tool Company has around 2,100 wholesalers and has the ability to extend to 15,000 retail outlets.

Question No. 2:

What is the maximum price that Monmouth can afford to pay based on discounted cash flow valuation? Based on market multiples of EBIAT?

Based on our careful computations and the professional judgments, the price Monmouth can offer to the Robertson Tool Company should be under $84 of each share. Based on the Cash Flow Analysis, the company was expected to grow at a constant rate of industry averaged 6%. On the other hand, on the basis of market Multiples of EBIAT and the total market capitalization, the price offered should be below $65.

Question No. 3:

Why is Simmons eager to sell its position to Monmouth for $50 per share? What are the concerns of and alternatives for each of the other groups of Robertson’s shareholders?

Just after the interest shown by Monmouth over the potential merger of the Robertson Tool Company, it became obvious to the management of the Monmouth Incorporation that their company was not the only one in the race. Two other potential investors, the first was the Simmons Company, a corporation with a main business of producing nonferrous metals, tools, rubber products and electrical equipment. Who also had invested in 44,000 shares of Robertson stock in the year 2000.

In March 3, 2003 the management of Simmons Company approached Robertson Tool Company and offered to tender around 75% of Robertson’s outstanding shares for $42 each. A premium of $12 was also included in the offered price, which was a trick to trap the shareholders of Robertson Tool Company. But Simmons Company just ended up with only 23% of shares which was not enough to constitute an operating independence.

On the other hand, the management of Simmons Company believed that the merger of Robertson Tool Company with the Monmouth Incorporation would be a 2nd best alternative they have, as after the merger of Robertson Tool Company with the Monmouth Incorporation, the management of the Simmons Company would convert its 8% shares holding in Robertson Tool Company into the common stock of the Monmouth Incorporation.

The management of Simmons Company expected that the synergies and the economies of scale anticipated after the merger will have a significant positive impact on the share price of Monmouth Incorporation.  The company suggested a price of $50 to the management of the Monmouth Incorporation.............................

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Monmouth Inc Brief Case Case Study Solution

Posted by John Berg on Feb-16-2018

Introduction

Monmouth Inc Brief Case Case Study is included in the Harvard Business Review Case Study. Therefore, it is necessary to touch HBR fundamentals before starting the Monmouth Inc Brief Case case analysis. HBR will help you assess which piece of information is relevant. Harvard Business review will also help you solve your case. Thus, HBR fundamentals assist in easily comprehending the case study description and brainstorming the Monmouth Inc Brief Case case analysis. Also, a major benefit of HBR is that it widens your approach. HBR also brings new ideas into the picture which would help you in your Monmouth Inc Brief Case case analysis.

To write an effective Harvard Business Case Solution, a deep Monmouth Inc Brief Case case analysis is essential. A proper analysis requires deep investigative reading. You should have a strong grasp of the concepts discussed and be able to identify the central problem in the given HBR case study. It is very important to read the HBR case study thoroughly as at times identifying the key problem becomes challenging. Thus by underlining every single detail which you think relevant, you will be quickly able to solve the HBR case study as is addressed in Harvard Business Case Solution.

Problem Identification

The first step in solving the HBR Case Study is to identify the problem. A problem can be regarded as a difference between the actual situation and the desired situation. This means that to identify a problem, you must know where it is intended to be. To do a Monmouth Inc Brief Case case study analysis and a financial analysis, you need to have a clear understanding of where the problem currently is about the perceived problem.

For effective and efficient problem identification,

• A multi-source and multi-method approach should be adopted.
• The problem identified should be thoroughly reviewed and evaluated before continuing with the case study solution.
• The problem should be backed by sufficient evidence to make sure a wrong problem isn't being worked upon.

Problem identification, if done well, will form a strong foundation for your Monmouth Inc Brief Case Case Study. Effective problem identification is clear, objective, and specific. An ambiguous problem will result in vague solutions being discovered. It is also well-informed and timely. It should be noted that the right amount of time should be spent on this part. Spending too much time will leave lesser time for the rest of the process.

Monmouth Inc Brief Case Case Analysis

Once you have completed the first step which was problem identification, you move on to developing a case study answers. This is the second step which will include evaluation and analysis of the given company. For this step, tools like SWOT analysis, Porter's five forces analysis for Monmouth Inc Brief Case, etc. can be used. Porter’s five forces analysis for Monmouth Inc Brief Case analyses a company’s substitutes, buyer and supplier power, rivalry, etc.

To do an effective HBR case study analysis, you need to explore the following areas:

1. Company history:

The Monmouth Inc Brief Case case study consists of the history of the company given at the start. Reading it thoroughly will provide you with an understanding of the company's aims and objectives. You will keep these in mind as any Harvard Business Case Solutions you provide will need to be aligned with these.

2. Company growth trends:

This will help you obtain an understanding of the company's current stage in the business cycle and will give you an idea of what the scope of the solution should be.

3. Company culture:

Work culture in a company tells a lot about the workforce itself. You can understand this by going through the instances involving employees that the HBR case study provides. This will be helpful in understanding if the proposed case study solution will be accepted by the workforce and whether it will consist of the prevailing culture in the company.

Monmouth Inc Brief Case Financial Analysis

The third step of solving the Monmouth Inc Brief Case Case Study is Monmouth Inc Brief Case Financial Analysis. You can go about it in a similar way as is done for a finance and accounting case study. For solving any Monmouth Inc Brief Case case, Financial Analysis is of extreme importance. You should place extra focus on conducting Monmouth Inc Brief Case financial analysis as it is an integral part of the Monmouth Inc Brief Case Case Study Solution. It will help you evaluate the position of Monmouth Inc Brief Case regarding stability, profitability and liquidity accurately. On the basis of this, you will be able to recommend an appropriate plan of action. To conduct a Monmouth Inc Brief Case financial analysis in excel,

• Past year financial statements need to be extracted.
• Liquidity and profitability ratios to be calculated from the current financial statements.
• Ratios are compared with the past year Monmouth Inc Brief Case calculations
• Company’s financial position is evaluated.

Another way how you can do the Monmouth Inc Brief Case financial analysis is through financial modelling. Financial Analysis through financial modelling is done by:

• Using the current financial statement to produce forecasted financial statements.
• A set of assumptions are made to grow revenue and expenses.
• Value of the company is derived.

Financial Analysis is critical in many aspects:

• Decision Making and Strategy Devising to achieve targeted goals- to determine the future course of action.
• Getting credit from suppliers depending on the leverage position- creditors will be confident to supply on credit if less company debt.
• Influence on Investment Decisions- buying and selling of stock by investors.

Thus, it is a snapshot of the company and helps analysts assess whether the company's performance has improved or deteriorated. It also gives an insight about its expected performance in future- whether it will be going concern or not. Monmouth Inc Brief Case Financial analysis can, therefore, give you a broader image of the company.

Monmouth Inc Brief Case NPV

Monmouth Inc Brief Case's calculations of ratios only are not sufficient to gauge the company performance for investment decisions. Instead, investment appraisal methods should also be considered. Monmouth Inc Brief Case NPV calculation is a very important one as NPV helps determine whether the investment will lead to a positive value or a negative value. It is the best tool for decision making.

There are many benefits of using NPV:

• It takes into account the future value of money, thereby giving reliable results.
• It considers the cost of capital in its calculations.
• It gives the return in dollar terms simplifying decision making.

The formula that you will use to calculate Monmouth Inc Brief Case NPV will be as follows:

Present Value of Future Cash Flows minus Initial Investment

Present Value of Future cash flows will be calculated as follows:

PV of CF= CF1/(1+r)^1 + CF2/(1+r)^2 + CF3/(1+r)^3 + …CFn/(1+r)^n

where CF = cash flows r = cost of capital n = total number of years.

Cash flows can be uniform or multiple. You can discount them by Monmouth Inc Brief Case WACC as the discount rate to arrive at the present value figure. You can then use the resulting figure to make your investment decision. The decision criteria would be as follows:

• If Present Value of Cash Flows is greater than Initial Investment, you can accept the project.
• If Present Value of Cash Flows is less than Initial Investment, you can reject the project.

Thus, calculation of Monmouth Inc Brief Case NPV will give you an insight into the value generated if you invest in Monmouth Inc Brief Case. It is a very reliable tool to assess the feasibility of an investment as it helps determine whether the cash flows generated will help yield a positive return or not.

However, it would be better if you take various aspects under consideration. Thus, apart from Monmouth Inc Brief Case’s NPV, you should also consider other capital budgeting techniques like Monmouth Inc Brief Case’s IRR to evaluate and fine-tune your investment decisions.

Monmouth Inc Brief Case DCF

Once you are done with calculating the Monmouth Inc Brief Case NPV for your finance and accounting case study, you can proceed to the next step, which involves calculating the Monmouth Inc Brief Case DCF. Discounted cash flow (DCF) is a Monmouth Inc Brief Case valuation method used to estimate the value of an investment based on its future cash flows. For a better presentation of your finance case solution, it is recommended to use Monmouth Inc Brief Case excel for the DCF analysis.

To calculate the Monmouth Inc Brief Case DCF analysis, the following steps are required:

• Calculate the expected future cash inflows and outflows.
• Set-off inflows and outflows to obtain the net cash flows.
• Find the present value of expected future net cash flows using a discount rate, which is usually the weighted-average cost of capital (WACC).
• If the value calculated through Monmouth Inc Brief Case DCF is higher than the current cost of the investment, the opportunity should be considered
• If the current cost of the investment is higher than the value calculated through DCF, the opportunity should be rejected

Monmouth Inc Brief Case DCF can also be calculated using the following formula:

DCF= CF1/(1+r)^1 + CF2/(1+r)^2 + CF3/(1+r)^3 + …CFn/(1+r)^n

In the formula:

• CF= Cash flows
• R= discount rate (WACC)

Monmouth Inc Brief Case WACC

When making different Monmouth Inc Brief Case's calculations, Monmouth Inc Brief Case WACC calculation is of great significance. WACC calculation is done by the capital composition of the company. The formula will be as follows:

Weighted Average Cost of Capital = % of Debt * Cost of Debt * (1- tax rate) + % of equity * Cost of Equity

You can compute the debt and equity percentage from the balance sheet figures. For the cost of equity, you can use the CAPM model. Cost of debt is usually given. However, if it isn't mentioned, you can calculate it through market weighted average debt. Monmouth Inc Brief Case’s WACC will indicate the rate the company should earn to pay its capital suppliers. Monmouth Inc Brief Case WACC can be analysed in two ways:

• From the company's perspective, it can be analysed as the cost to be paid to the capital providers also known as Cost of Capital
• From an investor' perspective, if the expected return on the investment exceeds Monmouth Inc Brief Case WACC, the investor will go ahead with the investment as a positive value would be generated.

Monmouth Inc Brief Case IRR

After calculating the Monmouth Inc Brief Case WACC, it is necessary to calculate the Monmouth Inc Brief Case IRR as well, as WACC alone does not say much about the company’s overall situation. Monmouth Inc Brief Case IRR will add meaning to the finance solution that you are working on. The internal rate of return is a tool used in investment appraisal to calculate the profitability of prospective investments. IRR calculations are dependent on the same formula as Monmouth Inc Brief Case NPV.

There are two ways to calculate the Monmouth Inc Brief Case IRR.

• By using a Monmouth Inc Brief Case Excel Spreadsheet: There are in-built formulae for calculating IRR.

IRR= R + [NPVa / (NPVa - NPVb) x (Rb - Ra)]

In this formula:

• Ra= lower discount rate chosen
• Rb= higher discount rate chosen
• NPVa= NPV at Ra
• NPVb= NPV at Rb

Monmouth Inc Brief Case IRR impacts your finance case solution in the following ways:

• If IRR>WACC, accept the alternative
• If IRR<WACC, reject the alternative

Monmouth Inc Brief Case Excel Spreadsheet

All your Monmouth Inc Brief Case calculations should be done in a Monmouth Inc Brief Case xls Spreadsheet. A Monmouth Inc Brief Case excel spreadsheet is the best way to present your finance case solution. The Monmouth Inc Brief Case Calculations should be presented in Monmouth Inc Brief Case excel in such a way that the analysis and results can be distinguished to the viewers. The point of Monmouth Inc Brief Case excel is to present large amounts of data in clear and consumable ways. Presenting your data is also going to make sure that you don't have misinterpretations of the data.

To make your Monmouth Inc Brief Case calculations sheet more meaningful, you should:

• Think about the order of the Monmouth Inc Brief Case xls worksheets in your finance case solution
• Use more Monmouth Inc Brief Case xls worksheets and tables as will divide the data that you are looking at in sections.
• Choose clarity overlooks
• Keep your timeline consistent
• Organise the information flow
• Clarify your sources

The following tips and bits should be kept in mind while preparing your finance case solution in a Monmouth Inc Brief Case xls spreadsheet:

• Avoid using fixed numbers in formulae
• Avoid hiding data
• Useless and meaningful colours, such as highlighting negative numbers in red
• Label column and rows
• Correct your alignment
• Keep formulae readable
• Strategically freeze header column and row

Monmouth Inc Brief Case Ratio analysis

After you have your Monmouth Inc Brief Case calculations in a Monmouth Inc Brief Case xls spreadsheet, you can move on to the next step which is ratio analysis. Ratio analysis is an analysis of information in the form of figures contained in the financial statements of a company. It will help you evaluate various aspects of a company's operating and financial performance which can be done in Monmouth Inc Brief Case Excel.

To conduct a ratio analysis that covers all financial aspects, divide the analysis as follows:

• Liquidity Ratios: Liquidity ratios gauge a company's ability to pay off its short-term debt. These include the current ratio, quick ratio, and working capital ratio.
• Solvency ratios: Solvency ratios match a company's debt levels with its assets, equity, and earnings. These include the debt-equity ratio, debt-assets ratio, and interest coverage ratio.
• Profitability Ratios: These show how effectively a company can generate profits through its operations. Profit margin, return on assets, return on equity, return on capital employed, and gross margin ratio is examples of profitability ratios.
• Efficiency ratios: Efficiency ratios analyse how efficiently a company uses its assets and liabilities to boost sales and increase profits.
• Coverage Ratios: These ratios measure a company's ability to make the interest payments and other obligations associated with its debts. Examples include times interest earned ratio and debt-service coverage ratio.
• Market Prospect Ratios: These include dividend yield, P/E ratio, earnings per share, and dividend payout ratio.

Monmouth Inc Brief Case Valuation

Monmouth Inc Brief Case Valuation is a very fundamental requirement if you want to work out your Harvard Business Case Solution. Monmouth Inc Brief Case Valuation includes a critical analysis of the company's capital structure – the composition of debt and equity in it, and the fair value of its assets. Common approaches to Monmouth Inc Brief Case valuation include

• DDM is an appropriate method if dividends are being paid to shareholders and the dividends paid are in line with the earnings of the company.
• FCFF is used when the company has a combination of debt and equity financing.
• FCFE, on the other hand, shows the cash flow available to equity holders only.

These three methods explained above are very commonly used to calculate the value of the firm. Investment decisions are undertaken by the value derived.

Monmouth Inc Brief Case calculations for projected cash flows and growth rates are taken under consideration to come up with the value of firm and value of equity. These figures are used to determine the net worth of the business. Net worth is a very important concept when solving any finance and accounting case study as it gives a deep insight into the company's potential to perform in future.

Alternative Solutions

After doing your case study analysis, you move to the next step, which is identifying alternative solutions. These will be other possibilities of Harvard Business case solutions that you can choose from. For this, you must look at the Monmouth Inc Brief Case case analysis in different ways and find a new perspective that you haven't thought of before.

Once you have listed or mapped alternatives, be open to their possibilities. Work on those that:

• need additional information
• are new solutions
• can be combined or eliminated

After listing possible options, evaluate them without prejudice, and check if enough resources are available for implementation and if the company workforce would accept it.

For ease of deciding the best Monmouth Inc Brief Case case solution, you can rate them on numerous aspects, such as:

• Feasibility
• Suitability
• Flexibility

Implementation

Once you have read the Monmouth Inc Brief Case HBR case study and have started working your way towards Monmouth Inc Brief Case Case Solution, you need to be clear about different financial concepts. Your Mondavi case answers should reflect your understanding of the Monmouth Inc Brief Case Case Study.

You should be clear about the advantages, disadvantages and method of each financial analysis technique. Knowing formulas is also very essential or else you will mess up with your analysis. Therefore, you need to be mindful of the financial analysis method you are implementing to write your Monmouth Inc Brief Case case study solution. It should closely align with the business structure and the financials as mentioned in the Monmouth Inc Brief Case case memo.

You can also refer to Monmouth Inc Brief Case Harvard case to have a better understanding and a clearer picture so that you implement the best strategy. There are a number of benefits if you keep a wide range of financial analysis tools at your fingertips.

• Your Monmouth Inc Brief Case HBR Case Solution would be quite accurate
• You will have an option to choose from different methods, thus helping you choose the best strategy.

Recommendation and Action Plan

Once you have successfully worked out your financial analysis using the most appropriate method and come up with Monmouth Inc Brief Case HBR Case Solution, you need to give the final finishing by adding a recommendation and an action plan to be followed. The recommendation can be based on the current financial analysis. When making a recommendation,

• You need to make sure that it is not generic and it will help in increasing company value
• It is in line with the case study analysis you have conducted
• The Monmouth Inc Brief Case calculations you have done support what you are recommending
• It should be clear, concise and free of complexities

Also, adding an action plan for your recommendation further strengthens your Monmouth Inc Brief Case HBR case study argument. Thus, your action plan should be consistent with the recommendation you are giving to support your Monmouth Inc Brief Case financial analysis. It is essential to have all these three things correlated to have a better coherence in your argument presented in your case study analysis and solution which will be a part of Monmouth Inc Brief Case Case Answer.

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Monmouth, inc. (brief case), spanish version description.

The management of Monmouth Inc. is considering whether to acquire the Robertson Tool Company and the value and form that the acquisition should take. Value can be assessed using a variety of approaches including a DCF with WACC analysis, impact on EPS and market multiples. The case also requires the student to consider how the offer should be designed and implemented. Subjects Include: Acquisition, DCF Analysis, Market Multiples Analysis, Revenue Forecasting, Margin Improvement, Valuation, EPS Analysis, Stock Offer, Weighted Average Cost of Capital, and Bidding Contest.

Case Description Monmouth, Inc. (Brief Case), Spanish Version

Strategic managment tools used in case study analysis of monmouth, inc. (brief case), spanish version, step 1. problem identification in monmouth, inc. (brief case), spanish version case study, step 2. external environment analysis - pestel / pest / step analysis of monmouth, inc. (brief case), spanish version case study, step 3. industry specific / porter five forces analysis of monmouth, inc. (brief case), spanish version case study, step 4. evaluating alternatives / swot analysis of monmouth, inc. (brief case), spanish version case study, step 5. porter value chain analysis / vrio / vrin analysis monmouth, inc. (brief case), spanish version case study, step 6. recommendations monmouth, inc. (brief case), spanish version case study, step 7. basis of recommendations for monmouth, inc. (brief case), spanish version case study, quality & on time delivery.

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Case Analysis of Monmouth, Inc. (Brief Case), Spanish Version

Monmouth, Inc. (Brief Case), Spanish Version is a Harvard Business (HBR) Case Study on Finance & Accounting , Texas Business School provides HBR case study assignment help for just $9. Texas Business School(TBS) case study solution is based on HBR Case Study Method framework, TBS expertise & global insights. Monmouth, Inc. (Brief Case), Spanish Version is designed and drafted in a manner to allow the HBR case study reader to analyze a real-world problem by putting reader into the position of the decision maker. Monmouth, Inc. (Brief Case), Spanish Version case study will help professionals, MBA, EMBA, and leaders to develop a broad and clear understanding of casecategory challenges. Monmouth, Inc. (Brief Case), Spanish Version will also provide insight into areas such as – wordlist , strategy, leadership, sales and marketing, and negotiations.

Case Study Solutions Background Work

Monmouth, Inc. (Brief Case), Spanish Version case study solution is focused on solving the strategic and operational challenges the protagonist of the case is facing. The challenges involve – evaluation of strategic options, key role of Finance & Accounting, leadership qualities of the protagonist, and dynamics of the external environment. The challenge in front of the protagonist, of Monmouth, Inc. (Brief Case), Spanish Version, is to not only build a competitive position of the organization but also to sustain it over a period of time.

Strategic Management Tools Used in Case Study Solution

The Monmouth, Inc. (Brief Case), Spanish Version case study solution requires the MBA, EMBA, executive, professional to have a deep understanding of various strategic management tools such as SWOT Analysis, PESTEL Analysis / PEST Analysis / STEP Analysis, Porter Five Forces Analysis, Go To Market Strategy, BCG Matrix Analysis, Porter Value Chain Analysis, Ansoff Matrix Analysis, VRIO / VRIN and Marketing Mix Analysis.

Texas Business School Approach to Finance & Accounting Solutions

In the Texas Business School, Monmouth, Inc. (Brief Case), Spanish Version case study solution – following strategic tools are used - SWOT Analysis, PESTEL Analysis / PEST Analysis / STEP Analysis, Porter Five Forces Analysis, Go To Market Strategy, BCG Matrix Analysis, Porter Value Chain Analysis, Ansoff Matrix Analysis, VRIO / VRIN and Marketing Mix Analysis. We have additionally used the concept of supply chain management and leadership framework to build a comprehensive case study solution for the case – Monmouth, Inc. (Brief Case), Spanish Version

Step 1 – Problem Identification of Monmouth, Inc. (Brief Case), Spanish Version - Harvard Business School Case Study

The first step to solve HBR Monmouth, Inc. (Brief Case), Spanish Version case study solution is to identify the problem present in the case. The problem statement of the case is provided in the beginning of the case where the protagonist is contemplating various options in the face of numerous challenges that Monmouth Eps is facing right now. Even though the problem statement is essentially – “Finance & Accounting” challenge but it has impacted by others factors such as communication in the organization, uncertainty in the external environment, leadership in Monmouth Eps, style of leadership and organization structure, marketing and sales, organizational behavior, strategy, internal politics, stakeholders priorities and more.

Step 2 – External Environment Analysis

Texas Business School approach of case study analysis – Conclusion, Reasons, Evidences - provides a framework to analyze every HBR case study. It requires conducting robust external environmental analysis to decipher evidences for the reasons presented in the Monmouth, Inc. (Brief Case), Spanish Version. The external environment analysis of Monmouth, Inc. (Brief Case), Spanish Version will ensure that we are keeping a tab on the macro-environment factors that are directly and indirectly impacting the business of the firm.

What is PESTEL Analysis? Briefly Explained

PESTEL stands for political, economic, social, technological, environmental and legal factors that impact the external environment of firm in Monmouth, Inc. (Brief Case), Spanish Version case study. PESTEL analysis of " Monmouth, Inc. (Brief Case), Spanish Version" can help us understand why the organization is performing badly, what are the factors in the external environment that are impacting the performance of the organization, and how the organization can either manage or mitigate the impact of these external factors.

How to do PESTEL / PEST / STEP Analysis? What are the components of PESTEL Analysis?

As mentioned above PESTEL Analysis has six elements – political, economic, social, technological, environmental, and legal. All the six elements are explained in context with Monmouth, Inc. (Brief Case), Spanish Version macro-environment and how it impacts the businesses of the firm.

How to do PESTEL Analysis for Monmouth, Inc. (Brief Case), Spanish Version

To do comprehensive PESTEL analysis of case study – Monmouth, Inc. (Brief Case), Spanish Version , we have researched numerous components under the six factors of PESTEL analysis.

Political Factors that Impact Monmouth, Inc. (Brief Case), Spanish Version

Political factors impact seven key decision making areas – economic environment, socio-cultural environment, rate of innovation & investment in research & development, environmental laws, legal requirements, and acceptance of new technologies.

Government policies have significant impact on the business environment of any country. The firm in “ Monmouth, Inc. (Brief Case), Spanish Version ” needs to navigate these policy decisions to create either an edge for itself or reduce the negative impact of the policy as far as possible.

Data safety laws – The countries in which Monmouth Eps is operating, firms are required to store customer data within the premises of the country. Monmouth Eps needs to restructure its IT policies to accommodate these changes. In the EU countries, firms are required to make special provision for privacy issues and other laws.

Competition Regulations – Numerous countries have strong competition laws both regarding the monopoly conditions and day to day fair business practices. Monmouth, Inc. (Brief Case), Spanish Version has numerous instances where the competition regulations aspects can be scrutinized.

Import restrictions on products – Before entering the new market, Monmouth Eps in case study Monmouth, Inc. (Brief Case), Spanish Version" should look into the import restrictions that may be present in the prospective market.

Export restrictions on products – Apart from direct product export restrictions in field of technology and agriculture, a number of countries also have capital controls. Monmouth Eps in case study “ Monmouth, Inc. (Brief Case), Spanish Version ” should look into these export restrictions policies.

Foreign Direct Investment Policies – Government policies favors local companies over international policies, Monmouth Eps in case study “ Monmouth, Inc. (Brief Case), Spanish Version ” should understand in minute details regarding the Foreign Direct Investment policies of the prospective market.

Corporate Taxes – The rate of taxes is often used by governments to lure foreign direct investments or increase domestic investment in a certain sector. Corporate taxation can be divided into two categories – taxes on profits and taxes on operations. Taxes on profits number is important for companies that already have a sustainable business model, while taxes on operations is far more significant for companies that are looking to set up new plants or operations.

Tariffs – Chekout how much tariffs the firm needs to pay in the “ Monmouth, Inc. (Brief Case), Spanish Version ” case study. The level of tariffs will determine the viability of the business model that the firm is contemplating. If the tariffs are high then it will be extremely difficult to compete with the local competitors. But if the tariffs are between 5-10% then Monmouth Eps can compete against other competitors.

Research and Development Subsidies and Policies – Governments often provide tax breaks and other incentives for companies to innovate in various sectors of priority. Managers at Monmouth, Inc. (Brief Case), Spanish Version case study have to assess whether their business can benefit from such government assistance and subsidies.

Consumer protection – Different countries have different consumer protection laws. Managers need to clarify not only the consumer protection laws in advance but also legal implications if the firm fails to meet any of them.

Political System and Its Implications – Different political systems have different approach to free market and entrepreneurship. Managers need to assess these factors even before entering the market.

Freedom of Press is critical for fair trade and transparency. Countries where freedom of press is not prevalent there are high chances of both political and commercial corruption.

Corruption level – Monmouth Eps needs to assess the level of corruptions both at the official level and at the market level, even before entering a new market. To tackle the menace of corruption – a firm should have a clear SOP that provides managers at each level what to do when they encounter instances of either systematic corruption or bureaucrats looking to take bribes from the firm.

Independence of judiciary – It is critical for fair business practices. If a country doesn’t have independent judiciary then there is no point entry into such a country for business.

Government attitude towards trade unions – Different political systems and government have different attitude towards trade unions and collective bargaining. The firm needs to assess – its comfort dealing with the unions and regulations regarding unions in a given market or industry. If both are on the same page then it makes sense to enter, otherwise it doesn’t.

Economic Factors that Impact Monmouth, Inc. (Brief Case), Spanish Version

Social factors that impact monmouth, inc. (brief case), spanish version, technological factors that impact monmouth, inc. (brief case), spanish version, environmental factors that impact monmouth, inc. (brief case), spanish version, legal factors that impact monmouth, inc. (brief case), spanish version, step 3 – industry specific analysis, what is porter five forces analysis, step 4 – swot analysis / internal environment analysis, step 5 – porter value chain / vrio / vrin analysis, step 6 – evaluating alternatives & recommendations, step 7 – basis for recommendations, references :: monmouth, inc. (brief case), spanish version case study solution.

• sales & marketing ,
• leadership ,
• corporate governance ,
• Advertising & Branding ,
• Corporate Social Responsibility (CSR) ,

Amanda Watson

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