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Random House Forecast Essay

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sheets titled “Random House Forecast” and “Penguin Forecast” it is clear that neither company is at particular risk of poor performance for the next few years which is a further indicator of financial strength. Similarly, another measure of financial performance is an analysis of trends in revenue and sales. Random House shows an incredibly steady growth rate of approximately 1 from 2007 until 2011 with a range of 0.93 to 1.06. While it is positive that the company has remained steady, they could benefit from the growth that entering into a new market could provide. Penguin shows a similar and even more stable range of 0.99 to 1.11, also indicating that they have been maintaining their performance but could benefit from growth. Together, the companies can pool their strengths to achieve more market share and likely more growth as a result. The stability shown in the analysis above may be an indicator of low risk-taking behaviours as making …show more content…

As seen in the sheets titled “Bertelsmann Asset to Liab.” and “Pearson Asset. to Liab.”, both companies have maintained a ratio of high assets in comparison to low liabilities, a move consistent with their steady values for growth. Changing their debt-to-asset ratio may be a hard sell for the seemingly conservative companies but it is an important step to achieve significant growth. An example of debt that would need to be taken on would be either the purchase, rental or outsourcing of web servers capable of handling high-volume e-reading. It is important to emphasize the fact that these risks have the potential of paying off in the form of much higher growth than the company has seen in recent years. Please note that data from Jan-June 2012 for Bertelsmann was not included in this analysis because the second portion of the year could see some significant changes due to the merger and the matching data was not available from

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