Sterling Household Products Company January of 2013 brought a new year and an important new opportunity to the management team of Sterling Household Products Company. Sterling manufactured and marketed a wide line of consumer goods, including laundry products, soaps, cosmetics, toilet preparations, and cleaning, disinfecting and sanitizing products, which were sold domestically and internationally, and were used every day in millions of households around the world. Sterling’s family of quality products included many highly regarded brand names, and the company had consistently delivered impressive sales and profits to…show more content… Jingcheng, 2015. 913-556 | Sterling Household Products Company
manufactured a wide variety of consumer products in more than 20 countries and marketed these products in more than 100 countries. As presented in Exhibit 1, Sterling’s well-regarded laundry products, soaps, cosmetics, toilet preparations, and cleaning, disinfecting and sanitizing products combined to generate nearly $3.3 billion of sales and $323 million of net income in 2012, producing a net profit margin of 9.8% of sales. This high profit margin reflected the income statement success of Sterling and its products, and with year-end 2012 total assets equal to nearly $2.7 billion (Exhibit 2), the company produced a rate of return on assets of 12% in the most recent year. Sterling’s financial results in the preceding years were just as robust; by any financial measure the company was successful year after year. Analysis of Sterling’s income statements through time, however, revealed the company’s biggest challenge. Between 2010 and 2012 sales grew from $3.14 billion to $3.281 billion, a total increase of 4.5%, representing a compounded annual growth rate of only 2.2%. Although the company had excellent products and was well-positioned in the industry, growth opportunities were limited and its business was under constant pressure. The company’s annual sales volume in units had increased by just less than 1% per year, constrained by weak growth in overall demand and strong competition with
Pound Sterling, thus a fall in the currencies value. This is illustrated in the diagram by a leftward in shift in UK exports to the EU (D1-D2), caused by the relatively high inflation. The resulting position of the demand curve sees a drop in the GBP value from P1 to P2. Also, UK consumers will find it more attractive to buy European imports. Therefore they will supply pounds to be able to buy Euros and the Euro imports. This increase in the supply of pounds decreases value of Pound Sterling. The…
six to 12 months or are we just postponing the day of reckoning? And are we storing up worse problems for the future as a result of rising household debt levels and a widening trade deficit? Driving force A good starting point is to consider what drives consumer spending. In the long run, economic research indicates a stable relationship between household spending, disposable income and wealth (all…
which mean the rate of return of purchasing gilts has become lower, thus, people also will buy other assets and push up the prices of those assets, the yields of assets in the economy as a whole are declined, that is the cost of borrowing for the household and the investors become lower, since the investment acts as a injection in the economy, the national income will be increased as well as the aggregate demand, the consumption and the wealth of the assets holders will raise, the inflation rate to…
the long-term interest rates. This is especially the case since short-term interest rates where significantly low already. Secondly through money supply. By acquiring more asset stock it directly causes a rise in the money supply in the economy. Households and investment institutions will be motivated to start spending and since the commercial banks would be more willing and able to lend more, the…
Prices * Lower interest rates can increase the value and prices of assets such as shares and houses. This allows existing home owners to extend their mortgages in order to finance higher consumption. Higher share prices can also increase a households wealth and can increase their propensity to spend. c. Exchange rate * Exchange rates can change very quickly, an unexpected rise in the rat of interest in…
3. Using one specific multinational enterprise with which you are familiar, examine the ways in which ‘credit crunch’ has impacted its operations. Evaluate the strategic responses it has made, and might make going forward, to respond to the impacts of the credit crunch on its operations. Introduction; This work will focus on the broader economic impact of the crisis in credit markets, which began over three years ago with the downturn in United States (US)…
instability than the rest of the UK. These could cut returns, push up charges and increase volatility. Such risks would not be welcomed by savers. Many are expected to protect their funds by moving money south, where they will continue to operate in sterling, have interest set by the Bank of England and enjoy the protections and compensation schemes run by UK financial regulators and ombudsmen, underwritten by the Westminster government. The more than 40 million non-Scots with accounts at banks registered…
Balance of Payment: Summary: 1) Balance of Payments - A record of all transactions between households, firms and the government of one country and the rest of the world a) current account - trade balance + net transfers + net interest income i) trade balance = exports - imports. Exports +, imports - ii) net tranfers - gifts between countries. Gift to US +, gift to other countries - iii) net interest income - income you receive from coupon payments (bonds) and dividends (stocks). US recieves…
ECB’s policy rate reduction in December. The euro effective exchange rate index (ERI) had weakened by around 3½% in the past month. Over the same period, the sterling ERI 2 had appreciated by just over 1%. The skews in options prices continued to imply a balance of risks towards the euro depreciating relative to the US dollar and sterling. 6 Equity markets internationally had fallen before the ECB operation but had rallied subsequently. Over the month as a whole, the FTSE All-Share index…
its 4.73% interest in Axis Bank and 4.74% interest in Yes Bank. In July 2012, one of its subsidiaries, HSBC Europe sold its 100% interest in HSBC credit Zrt to Central Fund Kockazati Tokealap. On Mar 31, 2013 HSBC insurance company of Delaware and Household Life Insurance Company of Delaware were acquired by Enstar group…
