Advanced Technologies

1.In view of the uneven growth in sales, inventories, receivables and fee in the past, were Michaels fiver year forecasts useful? mend downright growth rates of the above measures were uneven, if we look carefully, well-nigh of the primordial ratios have remained fair constant with the exception of 1997. As we nates see from the chart below, inventories and receivables as a % of gross revenue enhancement remained plum constant from 1993 through 1996, and both increased intimately in 1997. The increase in 1997 can be explained by the weaker than expected requisite in late 1996 which caused eld demarcation to rise combined with requests from customers for extended payment terms which caused Accounts Receivables days to rise in 1997. Return on Sales or Profit Margins increased in 1995 and 1996, before reducing in 1997. The increase in 1995 and 1996 was caused by trim cost of goods sold, R&D and SG&A expenses as a % of Sales. However, as investments in R&D, SG&A and COGS proved too optimistic for contend in 1997, Return on Sales rock-bottom so reducing Earnings. A similar graph for 1998 through 2002 shows that Michael has fallow Accounts Receivables and Inventories moderately unconstipated and approximately at the same start out as a % of Sales as in the search 5 years. And Return on Sales stays calm at the highs of 6% achieved during 1995.

One of the key assumptions in Michael forecasts for the succeeding(prenominal) 5 years is the 20% YoY growth in sales. fork out that the semiconductor equipment effort grew 52% between 1993 and 1996, and that the se miconductor manufacturing seems poised for ! a rebound in 1998, a 20% YoY growth in sales of semiconductor equipment seems a jolly good assumption. Whether ATI is financially capable of sustaining that level of growth is a different question. Thus Michael has kept the operational fundamentals fairly constant, while proposing small reductions in COGS, R&D and SG&A to become more profitable. He has also proposed a reduced exposure to leverage. Overall, his forecasts...If you want to get a full essay, rat it on our website: OrderCustomPaper.com

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