Reference no: EM131452150

Part I

This question will introduce you to some key marketing concepts.

Please read the attached article, Marketing and Social Media. This article talks about the emerging role of social media and social media marketing (SMM) as a tool marketers can use to promote their products and services online in a unique and differentiated manner.

Please answer the following questions once you've read this blog.

1. Identify one of the key roles of social media from a marketing management perspective? Identify two (2) ways in which social media is different from more traditional marketing tactics?

2. Consider the following statement - Social media is rapidly going to become more important than traditional media in promoting the products and services of companies. Do you agree with this statement? Support your answer by using relevant business concepts.

3. Measuring the promotional effectiveness of a social media program or strategy isn't typically based strictly on ROI. What are the key determinants for a successful social media promotional campaign? Do you feel these measures are relevant from a marketing perspective? Explain.

Maximum length - 400 words or 2 pages.

Part II

The objective of this task is to understand some of the key concepts in financial management. This requires an understanding of basic financial and managerial accounting.

The concepts you need to know include:
- Understand and analyze financial statements: Income Statements, Balance Sheets and Cash Flow Statements.
- Understand the cost structure of the business in terms of revenues, variable costs and fixed costs (and ultimately profitability) in order to conduct break-even analysis.
- Conduct the appropriate financial analysis to demonstrate that a business is sustainable.

Scenario
Usain Bolt, an experienced financial analyst at Speedster Athletics Company, has been charged with assessing the firm's financial performance in 2011 and specifically its financial position at year-end 2011. To complete this assignment, he gathered the firm's 2011 financial statements, shown below.

Assignment
Using the financial information below, answer the following questions:

1. Calculate the following three ratios for 2011 - using the financial data provided. Please show your work on an excel spreadsheet

- Return on equity (ROE)
- Earnings per share (EPS)
o Assume a share price of $10/share at year end, Dec. 31.
- Debt to owners' equity ratio (debt equity ratio - D/E)

2. For the three ratios listed above, explain what it could mean to the company if the calculated number went up? What if it went down? What story does each tell about the Speedster Athletics Company? Be company specific in your responses (don't make generalizations). Limit your response to 4 sentences per ratio. (10 marks)

3. Write a 2 page business memo to the CEO of Speedster Athletics Company, outlining the current financial position of the organization (both strengths and weaknesses). Maximum length 400 words. (40 marks)

- To justify your response, you must include 4 supporting arguments (i.e. examples) from the financial information provided below (2 for the strengths and 2 for the weaknesses).
- Your last paragraph should be a recommendation to the organization for the direction you suggest they take in the next several years.

Income Statement

Speedster Athletics Company for the year ended 2011

Sales revenue	$5,075,000
Less: Cost of goods sold	$3,704,000
Gross margin	$1,371,000
Less: Operating expenses
Selling expense	$655,000
General and admin expenses	$422,000
Amortization expense	$152,000
Total operating expense	1,229,000
Operating earnings (EBIT)	$ 142,000
Less: Interest expense	$92,000
Earnings before taxes	$ 50,000
Less: Taxes (rate = 40%)	$20,000
Net income after taxes	$ 30,000

 Balance Sheet

December 31
	2010	2011
Current assets
Cash	$ 24,100	$ 25,000
Accounts receivable	$763,900	$805,556
Inventories	$763,445	$700,625
Total current assets	$1,551,445	$1,531,181
Gross fixed assets (at cost)	$1,691,707	$2,093,819
Less: Accumulated amortization	$348,000	$500,000
Net fixed assets	$1,343,707	$1,593,819
Total assets	$2,895,152	$3,125,000

Speedster Athletics Company Assets

Liabilities and shareholders' equity

Current liabilities
Accounts payable	$400,500	$230,000
Line of credit	$370,000	$311,000
Accruals	$100,902	$75,000
Total current liabilities	$871,402	$ 616,000
Long-term debt	$700,000	$1,165,250
Total liabilities	$1,571,402	$1,781,250
Shareholders' equity
Preferred shares	$50,000	$50,000
Common shares	$293,750	$293,750
Retained earnings	$980,000	$1,000,000
Total shareholders' equity	$1,323,750	$1,343,750
Total liabilities and shareholders' equity	$2,895,152	$3,125,000

Historical Ratios - Speedster Athletics Company

Ratio	Actual 2009	Actual 2010	Industry Average 2011
Current ratio	1.7	1.8	1.5
Quick ratio	1.0	.9	1.2
Average age of inventory	70.2 days	73 days	35.8 days
Average collection period	50 days	55 days	46 days
Total asset turnover (times)	1.5	1.5	2.0
Debt ratio	45.8%	54.3%	24.5%
Times interest earned ratio	2.2	1.9	2.5
Gross margin	27.5%	28.0%	26.0%
Profit margin	1.1%	1.0%	1.2%
Return on total assets (ROA)	1.7%	1.5%	2.4%
Return on equity (ROE)	3.1%	3.3%	3.2%

Attachment:- Marketing Social Media Article.pdf