Midwest_Lighting_-_Case_(4).

But there 's a good side aside from increasing net sales and net profit , its return on owner 's investment is also decreasing from 15 in 2003 to 12 in 2005 . Comparing the company 's EBIT for the year 2005 with the previous years , we can tell that it continue to grow . Its earnings after the deduction of interest and taxes , is still higher than its previous years . This shows that the company is still capable of incurring more debt at reasonable amount

We can get more funds by selling some portions

of company stocks . The company under the current management is financed both by Equity and Debt . Over the past three years from 2003 to 2005 , its reliance on equity lowered from 94 to 85 in 2005 . But its reliance on long-term debt decreased from 22 in 2003 to 16 in 2005 . With Net Sales and EBIT continue to rise each year the company is enjoying tax shields from interest on debts thereby increasing its net earnings . But a tax shield is not reliable in all cases especially when the EBIT is very low Therefore , let 's not set aside the option of selling company stocks

Assume you do purchase the company : What specific actions would you plan to take on the first day ? by the end of the first week ? by the end of the six months ? Explain how and why

After restoring the full ownership of the company , I will start with restructuring the organization , the policies , management functions , and reviewing job specifications and working policies . During the first day I will conduct an immediate orientation to all company employees . It is also necessary to inform the public of the internal changes to eliminate the impact of past rumors or of negative perceptions . The next days will...