Torment employs approximately 4000 people in over 1 1 0 locations. The company is hoping to achieve an 18% after tax return on opening shareholders’ equity over a business cycle. Additionally as a performance objective, the company aims to earn threshold pre-tax returns on invested capital in the rage of 17%-25% depending on the business. The company uses a number of grog. Vet strategies to assume the title of market leader. They have policies to expand markets, strengthen product support, have more broad product offerings, invest in resources such as employee training and development, and of course to maintain a strong financial session.
Torment Industries Ltd. Have a favorable employee-shareholder culture and they have diversified business with leading brands. The company is also enjoying a stable financial condition, with revenues, net earnings, and return on shareholders equity increasing in the last 3 years. The company is also witnessing an increase in stock prices from October 201 3 after a period of stable prices. The company has also announced an 8% increase in its regular quarterly dividend on February 1 1, 2013. Industry Overview and Competitive Positioning PEST Analysis Porters 5 Forces Bargaining Power of Suppliers:
Bargaining Power of Customers: Threat of New Entrants: Threat of Substitute Products: Competitive Rivalry within an industry: SOOT Analysis Strengths: Distributor of a strong brand Comprehensive product support capabilities Weaknesses: One of the weaknesses associated with Torment Industries Ltd. Is the geographic concentration. Torment operations are situated in a limited areas and markets, focusing on the United States and Canada. According to Torment company profile, ‘the company generated 97. 6%of its revenues from Canada, while generating the remaining 2. 4% from other countries.
The fact that majority of Torments revenues come from one concentrated area can lead the company to engage in risks that are associated with dependence in one specific region. Opportunities: Growing equipment rental business in the US and Canada. Positive outlook of the US mining equipment market As the market declined in 2009 it has recovered well in the current years and is producing growth. Threats: The major threat that is faced by Torment is the increased competitive pressures. As Torment focuses on one primary market that is highly competitive there are a large number of companies who re providing services to the same customers.
Referring to the company profile some of the major competitors of Torment are NEST Holdings, United Rentals and Industrial Engines. Another threat is the environmental regulation. This could negatively impact the business. Depending on the region where Torment decides to provide its services, the legislations could drive the cost of products to go up. The company will also have to follow the environmental laws in place for that particular region and if the company violates any of these laws it can find itself charged with penalties or fines which could greatly affect the financial of the company.
Demand Fluctuations due to Financial Analysis Common-Size Financial Statements a) Referring to In the years 2008-2009 Torment gained all their revenues through historical segments, including while in 201 0 they began gaining some revenue from the Equipment Group. In 2011 and 2012, revenues were flowing mainly from Queue intent group while a small portion was coming from COMIC with a slight overall increase in 2012 compared to the previous year. B) c) In a lot of respects, Torment can be viewed as a profitable company.
All reparability ratios in the Facts database point to this conclusion, as they are all positive (Facts, 2013). These include gross margin percentage, operating margin percentage, net margin, and ROE/DuPont Ratio (Facts, 2013). Torment has never reported a loss in profitability in the last 5 years and all profitability ratios are trending upwards (except for net revenue, which decreased in 201 1 due to the split of Enrollee) (Facts, 2013). When margins are compared to other companies in the industry, Torment either are very close to the average or exceed competitors margins in 2012.