Business Proposal for the Implementation of Erp

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- CURRENT FINANCIAL SITUATION OF INTERNATIONAL DIVIDER WALLS

2002

2003

Debt

Equity

= 596,366,000

210,721,000

= 631,758,000

205,609,000

= 2.83

= 3.07

Debt/Equity Ratio is a debt ratio used to measure a company's financial leverage, calculated by dividing a company's total liabilities by its stockholders' equity. The ratio indicates how much debt a company is using to finance its assets relative to the amount of value represented in shareholders' equity.

The debt/equity ratio for International Divider Walls in 2003 is high and increased from 2002 by $0.24. A debt ratio of 2.83 and 3.07 means that there are 2.83 and 3.07 timesrespectively as many liabilities than there is equity. In other words, the assets of the company are funded 2.83-to-1 and 3.07-to-1 respectively by investors to creditors. Our company has accumulated a significant amount of debt and this is one of the problems to implement the ERP globally and the cheapest option is the best way to adapt to this situation.

- Profitability For Each Division

2002 ($)

2003 ($)

ANALYSIS ($)

Divider Walls America

25,679,000

17,327,000

Decreasing

(8,352,000)

Divider Walls Europe

10,251,000

12,893,000

Increasing

2,642,000

Indoor Sun Screens

1,906,000

(7,602,000)

Decreasing

(9,508,000)

TOTAL

37,836,000

22,618,000

(15,218,000)

The table shows the differences in profitability between the three divisions, with Divider Walls America that grows revenue, but also grows costs more that proportionally. Divider walls of America operating income decreased about $8,352,000 even though their sales increased in 2003 but at the same time their cost increased but in a way much morehigher than sales.

Next, for divider walls of Europe and Asia Pacific’s profit increase about $2,642,000 because this division currently in good situation because they start cost saving programme since 2001. Even though the restructuring of the back office function and the rationalisation of factories had been painful, but had reduced fixed cost significantly. We can say that this division increases gross margin but still they need more revenue.

Lastly, for Indoor Sun Screens, their profit decreased about $9,508,000 because in 2003 they loss $7,602,000 because currently this division in a deplorable state due to their outdated product and a new technology and also a competitor that comes with a substitute products.

- CURRENT FINANCIALSITUATION& IT LANDSCAPE OF EACH DIVISION

It Budget

It User

Cost Per User

Divider Walls America

$11,130,540.00

1570

$7,089.52

Divider Walls Europe

$5,496,921.00

1306

$4,208.97

Indoor Sun Screens

$4,680,260.00

677

$6,913.23

It Budget

Hours

Cost Per Hour

Divider Walls America

$11,130,540.00

2340

$4,756.64

Divider Walls Europe

$5,496,921.00

8476

$648.53

Indoor Sun Screens

$4,680,260.00

2340

$2,000.11

It Budget

Revenue

Cost Per Revenue

% On Revenue

Divider Walls America

$11,130,540.00

$402,185,000

$0.0277

2.77%

Divider Walls Europe

$5,496,921.00

$279,135,000

$0.0197

1.97%

Indoor Sun Screens

$4,680,260.00

$187,319,000

$0.0250

2.50%

IT Budget of 3 Divisions in ID Walls

- Divider Walls America Division

The