1) Net gross sales for Massey-Ferguson actually change order between 1979 and 1980. disrespect this, net income and income from continuing operations two downslopeped sharply in 1980. Which item on the income statement was most responsible for this drop in income? Net income dropped significantly from U.S. $37 millions in 1979 to -U.S.$225.2 millions in 1980 attributed to the two work outs. The most crucial factor was the rise in cost of goods sold. In 1980, with the influx of northwards Sea oil, the worst appreciated strongly relative to currencies in which Massey sold its products. omit of alignment between toil sites and merchandise also consume to currency losses. As engine production was heavily gruelling in the United realm, strong British pound increased Masseys cost of goods sold from U.S.$2381.8 millions in 1979 to U.S.$2568.5 millions in 1980 and wounded the profit margin. Another factor was spirited quest valuate .From the income statement (Exhibi t 2), it illust pastured that the divert expense go up from U.S.$128.8 millions in 1979 to U.S.$229.9 millions in 1980 despite the improvement of net sales. The full(prenominal) invade rate of 1979 and 1980 had a negative impact on Masseys sales performance. The cost of short-term debt and expense ruddiness dramatically.
High interest rate depressed the market and lessen the demand of give rise and industrial machinery which shrank the company sales. 2) why would the Canadian government activity rescue any interest in helping Massey -Ferguson refinance its debt? Looming pecuniary position bring on Victor Rice and Conrad Black to commute the governments of Canada,! Ontario and the United Kingdom to intervene on Masseys behalf. Massey approached the Trudeau and Thatcher government for aid in June 1980. Event there was hindrance to bailing show up a privately owned multinational firm, their initiative embossed the sentience of Canadian government. The Canadian government would have interest in helping Massey refinance its debt because of the upcoming Ontario...If you want to shit a full essay, order it on our website: BestEssayCheap.com
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