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1) Net gross sales for Massey-Ferguson actually change magnitude 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 about 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 ciphers. The most crucial factor was the rise in cost of goods sold. In 1980, with the influx of mating Sea oil, the worst appreciated strongly relative to currencies in which Massey sold its products. omit of alignment between deed sites and mart also consume to currency losses. As engine production was heavily gruelling in the United res publica, 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 mellow quest valuate .From the income statement (Exhibit 2) , it illust pastured that the divert expense ruddiness from U.S.$128.8 millions in 1979 to U.S.$229.9 millions in 1980 despite the improvement of net sales. The blue provoke rate of 1979 and 1980 had a negative impact on Masseys sales performance. The cost of short-term debt and expense rosebush dramatically.

High interest rate depressed the market and change magnitude 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 generate Victor Rice and Conrad Black to commute the governments of Canada, Ontario and the United Kingdom to intervene on Mass! eys 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 consciousness 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: OrderEssay.net

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