Gemini Electronics Case Study

1. How much ownership interest did the venture capitalists possess in Gemini Electronics? Also,briefly explain why you think the venture capitalists wanted to issue an IPO.

a. 25%

b. 35%

c. 45%

d. 55%

 

2. With regard to historic trends, the supply chain for Gemini Electronics had remained fairly consistent in their pricing for several years in that cost of goods sold represented around how much of total revenues? 

a. 20%

b. 40%

c. 60%

d. 80%

 

3. In 2009, how much did Cash represent as a percentage of Total Assets and how did that percentage compare to the industry? 

a. 3.4% and lower than the industry

b. 7.3% and higher than the industry

c. 14.2% and higher than the industry

d. 16.3% and lower than the industry

 

4. In 2006, Gemini Electronics posted a 10.3% net income margin, What was their net income margin in 2009? 

a. 10.1%

b. 5.7%

c. 12.6%

d. 3.3%

 

5. With regard to their $500 million line of credit, Gemini Electronics had to maintain working capital above a 1.50 current ratio as part of the bank’s lending requirements. Over the several years of financial data presented in the case did they meet this financing requirement? 

 

a. Yes

b. No

 

6. In a formal essay (500-750 words), please concisely (i.e. address key points) and precisely   (i.e. provide support) address the following task: What recommendation(s) would you provide the founder of the company moving forward? Consider either a financial strategy or marketing strategy and provide specific tactics to implement.