Black & Decker Corporation

Black & Decker Corporation, incorporated in Maryland in 1910, is a leading manufacturer, of power tools and accessories, hardware and home improvement products, and technology-based fastening systems. Duncan Black and Alonzo Decker started the company, and in 1916 they developed the first handheld electric drill with pistol grip. That would be the foundation for the company’s success for most of the 20th century. Black ; Decker has products and services located in over 100 countries. The corporation has received worldwide recognition for their strong brand names and a superior reputation for quality, design, and value.

The company operates in three reportable business segments: Power Tools and Accessories, which includes electric lawn and garden tools and electric cleaning and lighting products; Hardware and Home Improvement, including security and plumbing products; and Fastening and Assembly Systems. As of December 31, 2001, Black ; Decker Corporation employed approximately 22,700 persons worldwide. Nolan D Archibald has been Chairman, President, and Chief Executive Officer since January 1990. Black ; Decker’s ticker symbol is BDK.

As of January 28, 2002, there were 15,923 holders of record of the Corporation’s Common Stock. Financial calculations can be done to show interested parties how a specific company is doing. I will discuss four different categories of measures: profitability, liquidity, activity, and financial leverage. Profitability consists of ratios that measure the ability of the business to make a profit. An example of these ratios would be Return on Interest (ROI), Return on Equity (ROE), Price/Earnings Ratio, and Dividend Yield. I will only go over ROI and ROE.

For Black ; Decker, ROI is 2. 7%. This describes the rate of return management was able to earn on the assets it had available to use during the year. ROE calculates out to 15%. ROE is important to stockholders and investors because it relates the company’s earnings to the owner’s investment. The next measure I would like to address is liquidity. Liquidity is the firm’s ability to meet it current obligations, and consists of working capital, current ratio, and the acid-test ratio, also known as the quick ratio. Working capital for BDK is $821 million.

Current ratio is used to judge the current bill-paying ability. The current ratio for this company is 1. 76. The quick ratio also expresses liquidity and it specifically excludes inventory. BDK has an acid-test ratio of . 89. Activity measures reflect the efficiency with which assets have been used to generate sales revenue. To analyze activity measures, you must look at receivable turnover and inventory turnover. Receivable turnover measures the number of times, on average, receivables are collected during a given period. This ratio for Black & Decker is 5. 8.

This equals out to approximately every 2 months, or every 60 days. Inventory turnover, on the other hand, is an indicator of how well the company’s products are succeeding in the marketplace. In general, the higher this number, the better. However, a high ratio can also mean there is a shortage of inventory. A low turnover may indicate overstocking, or obsolete inventory. BDK has an inventory turnover of 3. 65. This ratio needs to be compared to similar industries to see how the company rates. Financial leverage is the degree to which a company is utilizing its borrowed money.

Debt/Equity ratio and debt ratio are examples of measures of leverage. Debt/Equity shows the ratio between capital invested by the owners and the funds provided by the lenders. Black ; Decker has a debt to equity ratio of 4. 34. Debt ratio is a good indicator of the extent to which a business is leveraged. For this company, their debt ratio is 81%, which is very high. If this number is low, it usually means that the company is more conservative. If used judiciously, leverage can result in a higher return on assets, which means increased profitability.

Just like turnover, this ratio varies depending on the type of industry a company is. Black ; Decker, compared to other industries of the same type seems to be doing well. The corporation recently announced that they will be closing two power tools facilities and a plumbing products plant in the U. S. Additional restructuring actions taken by the Corporation will also result in the transfer of production fro the United States and England to low-cost facilities in Mexico and China. Company officials say the shifts to more overseas manufacturing will eventually save $100 million a year.

Restructuring actions will result in the elimination of approximately 2,400 positions; however, the Corporation will increase headcount in low-cost locations by 1,900 positions. The elimination of these positions relates to the Corporation’s actions to reduce its manufacturing cost base and selling, general, and administrative expenses. Net earnings for the year ended December 31, 2001 included a restructuring charge of $99. 8 million. Total sales decreased by 5%. Total unit volume had a 1% negative impact on sales during 2001.

Unit volume was negatively affected by weak economic conditions and inventory reductions by retailers in the United States. Pricing actions taken in response to customer and competitive pressures had a 2% negative effect on sales. Looking at the past three years, I have come up with estimates of what I feel the company will produce in the next few years. For 2002, 2003, and 2004, I predict revenue to be $4. 6 billion, $4. 5 billion, and $4. 62 billion respectively. My estimates for cost of goods sold are $2,856, $2,863, and $2,855. Dollar amounts are in millions.

Lastly, net income, I believe, will be $106 million for 2002, $105 million in 2003, and $108 million the year ending 2004. All together, I think that Black & Decker has a very promising future. After restructuring actions are completed, the company will be even more competitive with other corporations. BDK has about average safety with well above average upside potential. It reflects a stock, which is likely to give well above average, relatively consistent returns over the long term. My recommendation would be to hold, with the possibilities of a moderate buy.

Calculate the price
Make an order in advance and get the best price
Pages (550 words)
*Price with a welcome 15% discount applied.
Pro tip: If you want to save more money and pay the lowest price, you need to set a more extended deadline.
We know how difficult it is to be a student these days. That's why our prices are one of the most affordable on the market, and there are no hidden fees.

Instead, we offer bonuses, discounts, and free services to make your experience outstanding.
How it works
Receive a 100% original paper that will pass Turnitin from a top essay writing service
step 1
Upload your instructions
Fill out the order form and provide paper details. You can even attach screenshots or add additional instructions later. If something is not clear or missing, the writer will contact you for clarification.
Pro service tips
How to get the most out of your experience with MyStudyWriters
One writer throughout the entire course
If you like the writer, you can hire them again. Just copy & paste their ID on the order form ("Preferred Writer's ID" field). This way, your vocabulary will be uniform, and the writer will be aware of your needs.
The same paper from different writers
You can order essay or any other work from two different writers to choose the best one or give another version to a friend. This can be done through the add-on "Same paper from another writer."
Copy of sources used by the writer
Our college essay writers work with ScienceDirect and other databases. They can send you articles or materials used in PDF or through screenshots. Just tick the "Copy of sources" field on the order form.
See why 20k+ students have chosen us as their sole writing assistance provider
Check out the latest reviews and opinions submitted by real customers worldwide and make an informed decision.
Business and administrative studies
excellent, got a 100
Customer 452773, May 17th, 2023
Human Resources Management (HRM)
excellent job
Customer 452773, July 17th, 2023
I just need some minor alterations. Thanks.
Customer 452547, February 10th, 2021
Business and administrative studies
Customer 452773, February 23rd, 2023
Business and administrative studies
looks good thank you
Customer 452773, March 3rd, 2023
excellent work
Customer 452773, October 6th, 2023
Business and administrative studies
excellent job! got an A, thank you
Customer 452773, May 24th, 2023
Business and administrative studies
Customer 452773, February 23rd, 2023
Business and administrative studies
Thank you
Customer 452773, March 19th, 2023
Leadership Studies
awesome work as always
Customer 452773, August 19th, 2023
thank you so much
Customer 452749, June 10th, 2021
Human Resources Management (HRM)
excellent job
Customer 452773, June 25th, 2023
Customer reviews in total
Current satisfaction rate
3 pages
Average paper length
Customers referred by a friend
15% OFF your first order
Use a coupon FIRST15 and enjoy expert help with any task at the most affordable price.
Claim my 15% OFF Order in Chat

Sometimes it is hard to do all the work on your own

Let us help you get a good grade on your paper. Get professional help and free up your time for more important courses. Let us handle your;

  • Dissertations and Thesis
  • Essays
  • All Assignments

  • Research papers
  • Terms Papers
  • Online Classes
Live ChatWhatsApp