Envy Rides Incorporated Case Study Solution Example

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Case Report – Individual “Estore at Shell Canada Limited” Essay examples

2599 WordsMar 25th, 201311 Pages

Executive Summary In 2002, Shell Canada launched its online store called eStore for its customers. The objective was to keep costs low by having a self-service technology so that agricultural customers can buy their products without the need for a sales-representative. The statistics from eStore showed even though the number of customers who signed up for eStore was close to the target, number of customers who actually used eStore remained low. The problem seemed to be mainly due to customers having difficulty with the service. According to customer’s feedbacks, many encountered various technical problems when they tried to place orders. Others just preferred traditional methods of buying what they needed, while the remaining group were…show more content…

Source: (“Canada Oil & Gas Report”, 2011)

Year Revenue (in million US $) Net Profit (in million US $)
2010 368,056 20,474
2009 278,188 12,718
2008 458,361 26,277
2007 355,782 31,331
2006 318,845 25,422
Table 3 – Financial Statistics. Source: (“Canada Oil & Gas Report”, 2011)

KEY PERFORMANCE INDICATORS 2011 2010

Total shareholder return (%) 17.1 17.0
Net cash from operating activities ($ billion) 37 27
Project delivery (%) 79 75
Production available for sale (thousand boe/d) 3,215 3,314
Sales of liquefied natural gas (million tonnes) 18.8 16.8
Refinery and chemical plant availability (%) 91.2 92.4
Total recordable case frequency (injuries per million working hours) 1.2 1.2 ADDITIONAL PERFORMANCE INDICATORS
Earnings on a current cost of supplies basis attributable to Royal Dutch Shell plc shareholders ($ million) 28,625 18, 643
Earnings per share on a current cost of supplies basis ($) 4.61 3.04
Net capital investment ($ million) 23,503 23,680
Return on average capital employed (%) 15.9 11.5
Gearing at December 31 (%) 13.1 17.1

Table 4 – Performance Indicators. Source: (Shell Annual Report 2011, n.d.)

Earnings (in billions) Revenues (in billions)

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The working capital loan will even bring more revenue to the company. Hence, it will even help increase the gross margin even higher.
The business has really been working well on its expenses by cutting down on most of the recurrent expenditure, apart from salaries, to ensure that the expenses reduce from 40.3% to 17.2% from 2007 to 2009 respectively. This is more than two times reduction in percentage expenses. It is, therefore, easy to make a projection of further reduction in expenses that might be realized in the next two years to be at less than 5%. With this tremendous reduction in expenditure, the business is, therefore, expected to have more revenue on the retained earnings section to be used to reinvest in the working capital. The business therefore has no reason to go for a loan for the working capital as it can be obtained from the retained earnings. However, the position of the business through its expenses support more loan to be obtained since it can be repaid easily given the level of the recurrent expenses in the business is also expected to reduce further for the next two years.
The net income has also experienced some increase from 2.6% to 4.9% from 2008 to 2009. The increase in the net income may also show that the business is using too little to finance its expenses, and it is increasing its volume of sales. Therefore, with an increase in the net income, there is a possibility of further increase in the next two years. Envy can, therefore, go for further loan to renovate and add working capital since such attempts will only increase the net income, and the company will be in a better position to repay the loans.
This is a profitability ratio that gauges whether the far that a firm can generate profits from the investments of the shareholders in the company. The return on equity ratio here has increased from 28.6% to 45.5% from 2008 to 2009. This shows that, currently, from every dollar that the ...Show more

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