Case Study: "American Home Products Corporation" (Capital Structure Decision)

American inhabitation Products Corporation1. CASE SUMMARYAHP party boss Executive?I exactly don?t interchangeable to owe m unmatchedy?, let out William F. Laporte, AHP header executive, when asked about his attach to?s about debt-free balance sheet and growing bullion in reserves. Mr. Laporte had taken tout tout ensemble over as chief executive of American Home Products in 1964. passim 17 subsequent years of his term of office Mr. Laporte has not changed his imprint of debt financial backing and AHP?s abstinence from debt continued, mend the fruit in its bills balance outpaced impressive growth in two gross revenue and earnings. At the end of 1980, AHP had almost no debt and a cash balance equal to 40% of its net worth. explanation of the CompanyAHP? 1981 sales of more than $4 one million million were produced by over 1,500 marketed brands in four lines of melody: prescription drug drugs, packaged drugs (i.e. copyrighted or over-the-counter), food returns, and foretokenwares and household products. Consumer products include a motley of long-familiar brand names, such as Anacin, Preparation H, Sani-Flush, Chef Boy-Ar-dee, florin?s Mustard, Woolite, and the Ekco line of housewares. AHP?s victor in these lines of business was build on marketing expertise. Whether the product was an oral hitch or a toilet gutter cleaner, ?they sell the funny house out of everything they?ve got?, said one competitor.

AHP?s Distinctive in collective CultureAHP had a distinctive corporeal culture that, in the pull in of many a(prenominal) observers, emanated from its chief executive. This culture had several(prenominal) components:Reticence. A jacket crownwork of W entirely Street analysts class-conscious AHP last in corporate communicability among 21 drug companies. self-denial and tight financial control. Reportedly, all expenditures greater than $500 had to be personally approved by Mr. Laporte even if authorized in the corporate budget. Conservatism and peril aversion. AHP consistently avoided much of the endangerment of new product development and introduction in the volatilisable drug industry. Most of its... If you distress to get a profuse essay, order it on our website: Orderessay

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