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Unformatted text preview: COMM 4559-501: Emerging Markets Notes 10-11-2010 (A11) Case Analysis Etale Fishing Company How do you assess performance? o Financial o Meeting expectations o Government regulations o Exchange rates o Quota system o Management o Competitors there are other fishing companies both in Namibia and other parts of the world o Environmental degradation Leverage how much you finance the company through debt o More highly leveraged the more you borrow Sometimes you can be effective when you earn more on the money than the interest on it Bad if you are borrowing to keep the company alive o Etale running on the business on almost all leverage No equity in the business high risk 1. How is the Etale doing? o Ex 3 quotas have been in slight decline (but it is hoped that an actual catch closer to the full quote might increase this target) o Ex 4 the Target Catch Mix = 0 (non Hake) and actual is very close o Ex 5a capital and reserves decreased by about N$5 million due to a current year loss of N$4.2 million o Losing opportunities to Pay off debt Pay dividends o Ex 5b current year loss = N$4.2 million o Notes - Admin costs declined year-to-year - Finance charges account for most of the loss Interest in the money they borrowed is killing them - Cost of sales are increasing while sales are flat + Recent months look better o Ex 5c closing cash flow is better than prior year o Need to Decrease costs Increase revenue Driven by quotas o Ex 6 the Namibian Dollar is declining in value relative to the US Dollar meaning...
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This note was uploaded on 01/24/2011 for the course COMM 4559 at UVA.