• Author / Uploaded
• Swetha Ravichandran

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Maumee Commercial Dinning Products, Inc Maumee Commercial Dining Products Inc. is a publicly owned company which manufactures dining room furniture. Now the company is in the middle of a hostile take-over by John Warren. In this process Stephanie Holden, director of Corporate Communications found out that the middle management employees did not know about the basic financial ratios. 4 Metrics were considered important by her, the EPS, debt ratio, interest coverage ratio, and the return on equity ratio. But as per our analysis these 4 metrics are not sufficient. The middle management is adept at technical skills so they should be made aware of the ratios and their impacts related to the technical aspects. Thus we can educate them about the inventory turnover ratio, Days’ sales in inventory, return on assets ratio, gross profit ratio, EBIT margin, R&D expense ratio and return on capital employed ratio. So we can educate them regarding these 7 metrics. The ones related to share price need not be known to them immediately. This is because these mid management employees are those who belong to the core engineering background. Thus for them to internalize these ratios it would take time. Also these were the major ratios which would be impacted immediately by their working. Thus it made sense to train them on these ratios initially. The remaining ratios could be presented to them in the form of a report. By reading the report they could understand the impact of the ratio on the company’s financial position.