abhishreshthaa
Abhijeet S
The Brunswick Corporation (NYSE: BC), formerly known as the Brunswick-Balke-Collender Company, is a United States-based corporation that has been involved in manufacturing a wide variety of products since 1845. Brunswick's global headquarters is in the northern Chicago suburb of Lake Forest, Illinois. In 2007, it had sales of US$5.671 billion with net earnings of $111.6 million.[1]
Brunswick was founded by John Moses Brunswick who came to the United States from Switzerland at the age of 15. The J.M. Brunswick Manufacturing Company opened for business on September 15, 1845, in Cincinnati, Ohio. Originally J. M. Brunswick intended his company to be mainly in the business of making carriages, but soon after opening his machine shop, he became fascinated with billiards and decided that making billiard tables would be more lucrative, as the better tables then in use in the United States were imported from England. Brunswick billiard tables were a commercial success, and the business expanded and opened up the first of what would become many branch offices in Chicago, Illinois in 1848.
In 1873, the Brunswick company merged with competitor Great Western Billiard Manufactory owned by Julius Balke to become the Brunswick & Balke Company, incorporated with a capital stock of $275,000. In 1884, another competitor, H.W. Collender Company of New York (founded by Hugh W. Collender), was absorbed to form the Brunswick-Balke-Collender Company (or B.B.C. Company for short[2]) with capital of $1.5 million.
The company expanded into making a number of other products. Large ornate neo-classical style bars for saloons were a popular product. Bowling balls, pins, and equipment led a growing line of sporting equipment. It popularized bowling balls of manufactured materials, vulcanized rubber at first; earlier bowling balls had been solid wood.
In the early 20th century, Brunswick expanded the product line to include such diverse products as toilet seats, automobile tires, and phonographs. In the late 1910s, they introduced a quickly-popular line of disc phonograph records, under the name Brunswick Records. In 1930, Brunswick sold the control of the record company to Warner Brothers and came out with a line of refrigerators.
In addition to key figures e.g. turnover or cost of sales, several ratios such as performance and activity related ones will be examined in the following analysis.
Even though one might think that the chosen companies are similar in their figures to each other-this assumption will be proven as wrong.
First of all, there has been seen a significant deterioration in performance, as the return of capital employed differs between 12.23% (Tesco), 13.03% (Asda) and 21.24% (Morrison). This is due to a single factor – that each company has different costs in delivery, production, etc. However, the return on capital employed considers the relationship between income and operational assets used to cause this income (Davies and Pain, 2002, p. 159). Therefore, Morrison is showing the best figures and Tesco the worst.
Similar results are also stated in the capital gearing ratio, which shows that Morrison and Asda are less financed by borrowing than Tesco.
Nevertheless, the current ratio implies that Asda’s financial stability is better than Tesco’s or Morrison’s.
First of all, it cannot be denied that all the ratios themselves do not say anything about a company. Ratios will always need to be subject to comparison with ratios from previous years. In case of a comparison with similar companies, one needs to be aware of probably different accounting methods and the availability of material (Boczko, T., 2003, Lecture notes), e.g. the capital gearing number of Tesco differs too much compared to the other companies. Therefore, one may conclude that there is no ‘real’ use of this analysis.
However, a financial analysis has been regarded as a useful tool to facilitate an understanding of absolute values, and performance may be seen in context ( 2003,) - but only in comparison to previous years. It was supposed to help to find out about the financing of the different companies because then it can be seen as a first step towards a stakeholder analysis, as the tool reveals dependencies on creditors but with not being an ‘insider’ of the companies and not knowing their special assigned accounting methods this analysis failed to meet its objectives.
Brunswick was founded by John Moses Brunswick who came to the United States from Switzerland at the age of 15. The J.M. Brunswick Manufacturing Company opened for business on September 15, 1845, in Cincinnati, Ohio. Originally J. M. Brunswick intended his company to be mainly in the business of making carriages, but soon after opening his machine shop, he became fascinated with billiards and decided that making billiard tables would be more lucrative, as the better tables then in use in the United States were imported from England. Brunswick billiard tables were a commercial success, and the business expanded and opened up the first of what would become many branch offices in Chicago, Illinois in 1848.
In 1873, the Brunswick company merged with competitor Great Western Billiard Manufactory owned by Julius Balke to become the Brunswick & Balke Company, incorporated with a capital stock of $275,000. In 1884, another competitor, H.W. Collender Company of New York (founded by Hugh W. Collender), was absorbed to form the Brunswick-Balke-Collender Company (or B.B.C. Company for short[2]) with capital of $1.5 million.
The company expanded into making a number of other products. Large ornate neo-classical style bars for saloons were a popular product. Bowling balls, pins, and equipment led a growing line of sporting equipment. It popularized bowling balls of manufactured materials, vulcanized rubber at first; earlier bowling balls had been solid wood.
In the early 20th century, Brunswick expanded the product line to include such diverse products as toilet seats, automobile tires, and phonographs. In the late 1910s, they introduced a quickly-popular line of disc phonograph records, under the name Brunswick Records. In 1930, Brunswick sold the control of the record company to Warner Brothers and came out with a line of refrigerators.
In addition to key figures e.g. turnover or cost of sales, several ratios such as performance and activity related ones will be examined in the following analysis.
Even though one might think that the chosen companies are similar in their figures to each other-this assumption will be proven as wrong.
First of all, there has been seen a significant deterioration in performance, as the return of capital employed differs between 12.23% (Tesco), 13.03% (Asda) and 21.24% (Morrison). This is due to a single factor – that each company has different costs in delivery, production, etc. However, the return on capital employed considers the relationship between income and operational assets used to cause this income (Davies and Pain, 2002, p. 159). Therefore, Morrison is showing the best figures and Tesco the worst.
Similar results are also stated in the capital gearing ratio, which shows that Morrison and Asda are less financed by borrowing than Tesco.
Nevertheless, the current ratio implies that Asda’s financial stability is better than Tesco’s or Morrison’s.
First of all, it cannot be denied that all the ratios themselves do not say anything about a company. Ratios will always need to be subject to comparison with ratios from previous years. In case of a comparison with similar companies, one needs to be aware of probably different accounting methods and the availability of material (Boczko, T., 2003, Lecture notes), e.g. the capital gearing number of Tesco differs too much compared to the other companies. Therefore, one may conclude that there is no ‘real’ use of this analysis.
However, a financial analysis has been regarded as a useful tool to facilitate an understanding of absolute values, and performance may be seen in context ( 2003,) - but only in comparison to previous years. It was supposed to help to find out about the financing of the different companies because then it can be seen as a first step towards a stakeholder analysis, as the tool reveals dependencies on creditors but with not being an ‘insider’ of the companies and not knowing their special assigned accounting methods this analysis failed to meet its objectives.