Inner-City Paint Corporation (Revised) Essay

Alternatives1. Management overture Mr. Walsh should rejoinder up management tier. He ask to learn employee em effectment and delegation. He call for to learn employee em positionment and delegation. The whole caboodle four-in-hand needs to be practised on leadership since he has no recognize in management. He should in addition initiate hiring a public relations specialiser and a marketing specialist to meliorate on these two aspects of the business.2. Facility Improvement Equipment at Inner- urban c record paint is three broad social, two splendider mixers, machines in the science laboratory and the trucks. Mr. Walsh should buy more equipment so that his consumers wont name to worry well-nigh their disposition not being ready. He has enough transportation Equipment. But he should buy some new mixer and more lab equipment. In order to acquire all of this he should feign the loan.RecommendationI would recommend the origin alternative which is to improve manageme nt. Mr. Walsh wasnt trained and didnt actualize management. He could speak the gild when it was small. He got lost as the Inner-City winder grew. If Mr. Walsh did some discipline, then the caller probably wouldnt be in such a mess. He did understand how to expand the business and add employees were they be needed but he lacked vainglorious confidence to new(prenominal) people. With employee empowerment training he should be able to depone new employees. So with this alternative we lav see that the company will bewilder favorably.METHODS OF ANALYSISS.W.O.T analytic thinkingStrengths Competitive prices of its products. pixilated growth in its market. The companys reputation had been built on its profligate service it frequently supplied paint to contractors at heart 24 hours.Weaknesses Customers view Inner City as a company that negotiates on price and move overment out of desperation. His plant managers only go steady has been that of a painter. Operating without m anagement controls or fiscal controls. Inability to pay providers on time Poor condition of facilities only records atomic number 18 processed manually strain records are not kept. Lack of congruous delegation of authority. Employees take turns making paint and driving the delivery trucks. Unskilled employees.Opportunities Considering a purchase of a computer to conjure the business and reduce needless paperwork. Consultants who are able to quickly spot problems in business. The production of color paints nemesiss The retardation in the housing market combined with the s minusculedown in the overall economy caused financial difficulty for the company. Walsh manages the corporation today in more the same way that he did when the business began. Walsh lacked on giving trust to new(prenominal) people. Rumors abound that the company is in difficult financial straits, that it is unable to pay suppliers, and it owes a considerable sum for defrayal on back taxes. cay contractor s are hesitant to give larger orders. large orders usually go to larger companies that break demonstrated their reliability and solvency. No backvass has been performed. This could lead to penalty by the interior Revenue Service (IRS).Porters Five Forces Industry Analysis panic of New entrants there are low entry barriers in the paint manufacturing industry. This is because it is ground on the low costs to enter the market and product unanimity. This is due to an escaped and cheap development stage. As for slap-up requirements, firms need to dress small financial resources before entering this market.Rivalry amid Competing FirmsInner-City Paint is confronted by aggressive emulation in its business. there are small paint manufacturers in Chicago that fork up the immediate area. The market for paint is exceedingly competitive. It doesnt compete with giants such as Glidden and DuPont. Competition among the giants isnt that fierce, but they unload their large orders to th em.Bargaining Power of SuppliersThere is a high bargaining power of suppliers since the industry is highly dependent on component suppliers, a powerful supplier could exert pressure on the market, by supplying components at a high price to increase his profits. their products are the primary election raw material for the paint manufacturing companies. They could withal erect high switching costs. Since Inner-City Paint is working only with few selected suppliers, the company is running at a higher(prenominal) risk than the bonnie.Bargaining Power of BuyersThere is a low bargaining power of buyers this is due to high number of other paint manufacturers in the area in the industry and the customer has the options to take the cheapest and the best.Threat of SubstitutesThere is a high threat of substitutes because there are larger companies that have demonstrated reliability and solvency that paint contractors can choose. There are also other small paint manufacturers in the area. p ecuniary ANALYSISInner-City Paint Corporations revenue for the year is $1,784,080. It experienced a engagement Income of $ 17,610.Profitability proportionsReturn on assets = $ 17,610 = 5.98%$ 294,565This shows that Inner-City Paint is not providing an adequate overtake on the firms investment.Net Profit Margin = $ 17,610 = 0.987%$ 1,784,080This ratio indicates how much money Inner-City Paint makes with each incremental dollar in sales that they experience, gist that a higher ratio would return increased profit with each excess dollar in sales.Liquidity Ratio real Ratio = 262,515 = 0.92285,030This ratio shows that Inner-City Paint is currently in trouble run across its financial commitments because its current ratio is under 1.Leverage RatiosDebt Ratio = 300,030 = 1.02294,565This measures the portion of amount of money assets provided by the companys creditors. In conjunction with other ratios, this ratio indicates the degree to which operating losses may be cushioned from adv erse actions by creditors. vulgar Size Financial Statement AnalysisINCOME STATEMENT% to SalesSales$ 1,784,080 100.00% apostrophize of Goods Sold 1,428,730 80.08%Gross Margin 355,350 19.92%Expenses selling expenses 72,460 4.06%Administrative expenses 67,280 3.77%Presidents pay 132,000 7.40%Office Managers wages 66,000 3.70% amount expenses 337,740 18.93%Net Income $ 17,610 0.99%BALANCE mainsheetAmount % to Total AssetsAssetsCurrent Assets bullion $ 1,535 0.52%Accounts receivable (net of ADA of $63,400) 242,320 82.26%Inventory 18,660 6.33%Total current assets 262,515 89.12%Non-current AssetsMachinery and transportation equipment 47,550 16.14%Less accrued depreciation 15,500 5.26%Total non-current assets 32,050 10.88%Total Assets 294,565 100.00%LiabilitiesCurrent LiabilitiesAccounts payable $ 217,820 73.95%Salaries payable 22,480 7.63%Notes payable 6,220 2.11%Taxes payable 38,510 13.07%Total current liabilities 285,030 96.76%Non-current LiabilitiesLong-term notes payable 15,000 5. 09%Owners EquityCommon equity 12,400 4.21% dearth (17,865) (6.06%)Total liabilities and owners equity $ 294,565 100.00%With all of this study we can point out that near of the expenses is attributable to Walshs salary. His six-figure income is not the average salary of a president in such a small company. He might try taking a small pay cut to invest that money in the business. He should also make set selling prices. Next, he should check into finding cheaper suppliers to bring his beam materials cost down. Financially ICP needs a financial account manager to jump off investing money and watch pay closer.