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Posts Tagged ‘heir’

To assess the gap between where the organization wants to be and what it currently can produce, I use the organizational process model shown in Figure 21. This tool helps me view the organization at the macro level and allows me to see at a glance what the organization is accomplishing from a task perspective. It helps indicate whether the work being done is consistent with the organization’s vision and mission.

Moreover, the model identifies any gaps between present processes and future plans. A credit card company I worked with had its genesis in the postwar boom of the 1950s and 1960s, enabling millions of consumers to buy electrical appliances. Although this company had been very successful for decades, competition for market share of appliances increased as the market became saturated. In addition, the spread of other credit resources began to squeeze this company’s profits. Soon the company was expanding into other kinds of businesses including dealer financing, retail space design, inventory financing, and even the financing of capital improvements for dealers. Each area now competed for the resources of the original credit card business, and the company found itself spread too thin. Divisions competed against each other for personnel and budget. And as the top leadership increasingly abandoned initiatives that didn’t produce short-term profits, the whole company’s morale spiraled downward.

The costs of acquisition, enhancement and disposal of an asset can be deducted from the gain. Also, the cost of defending your right to ownership of the asset can be deducted, whilst the normal cost of repairs and maintenance and interest payments cannot. Special rules apply to the costs of ‘wasting assets’ (which are defined as assets which had a predictable life of less than 50 years when acquired).

Acquisition costs are defined as being costs wholly and exclusively incurred in acquiring the asset. Where the asset is business goodwill, any capital costs expressly incurred wholly and exclusively in creating the asset can be deducted. Enhancement costs are those costs wholly and exclusively incurred to enhance the asset as long as the costs are still reflected in the nature of the asset at the date of sale.

Incidental costs include costs of transfer or conveyance; and fees, commissions and remuneration for professional advice.

Price/earnings (p/e) ratio. The price/earnings ratio is simply the share price divided by the earnings per share (eps). It is the one that investors
and analysts focus on and it forms part of the valuation of a company during acquisitions and disposals. The higher the ratio, the more the company is deemed to be worth, although there are several points to vote. p/e ratios vary across industry sectors and in different countries, and are relative to those of competitors. They rise when the share price rises – for example, when there is speculation about a merger or takeover. They can also lag behind events, combining current share price with past earnings. A p/e ratio may, for instance, be too high compared with likely future growth.