Has the company increased production, made a significant capital investment (i.e. purchased new equipment or implemented new computer systems) in the most recent fiscal cycle?
The Cabot Corporate has made a significant capital investment by launching a new product line of carbon black products for use in the rubber applications. The new product line is in line with the changing global markets as well as changes in customer requirements. The company has made this investment in the recent fiscal cycle as it announced news of the new product line in June 2015 (Cabot Corporate, 2015).
Where did you find this information?
The information above on the company was found on the press release section of the Cabot Corporate website. The link for the website is http://investor.cabot-corp.com/phoenix.zhtml?c=94559&p=irol-newsArticle&highlight=&ID=2063100
What analysis might they have performed and how do you think the decision was made?
The company may have examined a number of factors in order to make the decision to start a new product line. In order to reach this decision the company may have examined the environmental impact of its products. The company may also have examined the different global environmental laws that govern the production of rubber and carbon related products that may have a negative impact on the environment. Lastly, the company may have analyzed market trends as well as customer needs and requirements in order to invest in its new production line. This is mainly because customers have specific requirements for the end use of the product (Cabot Corporate, 2015).
Considering their cash position and bottom line, do you think this was the correct decision? Provide specific examples in your response.
Introducing the new product line was the correct decision for the company. Considering its cash position it is clear that the company is highly profitable, therefore, it has the financial capability of investing in the new product line. Furthermore, the new product line is aimed towards increasing the company’s revenues and profits by targeting new customer segment. Considering its bottom line, the company aims towards producing environmentally friendly products that meet laid out standards as well as customer requirements. This new product line will help the company maintain this bottom line since it is in line with it.
Cabot Corporate (2015). Cabot Launches New Series of Low Polycyclic Aromatic Hydrocarbons (PAH) Carbon Black Products for Rubber Product Applications. Retrieved 15/7/2015 from http://investor.cabot-corp.com/phoenix.zhtml?c=94559&p=irol-newsArticle&highlight=&ID=2063100