teram paper

Example Problem Statements

A large devaluation of the Japanese yen relative to the US dollar has caused ABC Export Corporation’s sales in Japan to fall by 75% in the last 12 months. The Japanese market accounts for approximately one-third of ABC’s sales. Driven by the drop in sales, ABC suffered losses totaling $500 million for the first six months of 2011.

The expanded capabilities of smart phones have reduced demand for traditional point-and-shoot cameras leading to a 30% drop in sales for XYZ Camera Maker Co. over the past 2 years. With no other products, this shift in consumer demand for cameras threatens XYZ’s future.

ABC Manufacturing Co. has seen prices for rolled steel (ABC’s primary raw material) increase by 150% in the past 3 years. Simultaneously, the weak US economy has prevented BAP from passing these cost increases through to customers in the form of price increases and BAP’s gross margins have fallen from 18% to 6.3%, net income is down from $1.1 billion to $345 million since 2008, and the market price of the company’s common shares is down from $16.72 at the end of 2008 to $3.66 today.

Big Bank Inc. has suffered extensive negative publicity in the past year related to its handling of the mortgage crisis and what has been portrayed in the media as unfair treatment of homeowners in default. With this publicity, Big Bank has experienced a loss of 15.1% of its consumer deposit accounts and income in the consumer banking division is down by 40%.

Giant Retail Co. (which sells mostly higher end discretionary items) has experienced an 8% reduction in foot traffic in its stores over the past 2 years due to increased competition from smaller retail outlets focusing on value priced goods. With the reduction in foot traffic, Giant’s sales per square foot of store space have dropped from a national average of $117 per foot per month to $97 per foot and the company has seen net income fall by 34% in the last year.