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 strong growth rates of the above measures were uneven, if we look carefully, well-nigh of the recognise ratios have remained fair constant with the exception of 1997. As we lav see from the chart below, inventories and receivables as a % of gross revenue enhancement remained plum constant from 1993 through 1996, and both increased comfortably in 1997. The increase in 1997 can be explained by the weaker than expected requisite in late 1996 which caused eld ascendent to rise combined with requests from customers for extended payment terms which caused Accounts Receivables age 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 pr oved too optimistic for ingest in 1997, Return on Sales decreased so reducing Earnings. A similar graph for 1998 through 2002 shows that Michael has fallow Accounts Receivables and Inventories reasonably unconstipated and approximately at the same accept as a % of Sales as in the former 5 years. And Return on Sales stays beauty at the highs of 6% achieved during 1995.

One of the key assumptions in Michael forecasts for the undermentioned 5 years is the 20% YoY growth in sales. break up that the semiconductor equipment effort grew 52% between 1993 and 1996, and that the semiconductor industriousness se ems poised for a rebound in 1998, a 20% YoY ! growth in sales of semiconductor equipment seems a somewhat 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, swan it on our website: OrderCustomPaper.com

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