Toromont Industries Ltd: Case Study
Business Description
Toromont Industries Ltd. was founded in 1961 by eight private investors in Canada. The company’s stock was listed on the Toronto Stock Exchange in 1968. Toromont Industries Ltd. owns and operates through two business segments which are: The Equipment Group and CIMCO Refrigeration. The Equipment Group serves an estimated $5 billion markets and owns one of the world’s largest CAT dealerships in terms of revenue and geographic territory, which comprises of 36 branches in Canada. The dealerships sell Caterpillar products and specialize in industrial machines. Toromont Industries Ltd. also owns Battlefield- The CAT Rental Store which specializes in mobile equipment rental and compact equipment. There are 37 CAT Rental Stores. …show more content…
CIMCO Refrigeration operates 23 locations in Canada and the United States. Toromont employs approximately 4000 people in over 110 locations. The company is hoping to achieve an 18% after tax return on opening shareholders’ equity over a business cycle. Additionally as a performance objective, the company aims to earn threshold pre-tax returns on invested capital in the rage of 17%-25% depending on the business. The company uses a number of growth strategies to assume the title of market leader. They have policies to expand markets, strengthen product support, have more broad product offerings, invest in resources such as employee training and development, and of course to maintain a strong financial position. Toromont Industries Ltd. have a favourable employee-shareholder culture and they have diversified business with leading brands. The company is also enjoying a stable financial condition, with revenues, net earnings, and return on shareholder’s equity increasing in the last 3 years. The company is also witnessing an increase in stock prices from October 2013 after a period of stable prices. The company has also announced an 8% increase in its regular quarterly …show more content…
have been doing well in the recent periods after a series of instability primarily in 2010 when the company witnessed an overall decrease in every performance aspects. The economy is witnessing slow growth. A main area of concern would be the mining sector of Equipment Group, where they witnessed a 18% decline in mining revenue even though construction related markets such as road building and infstracture development have got better.So it can be analysed that the mining sector is not doing well and is witnessing a fall in revenue while the activities of Equipment Group appreciating. At the same time the high number of Equipment Group backlogs is to be taken into consideration, while the numbers are decreasing it is still high and it is stemming from the unavailability of equipment and the mining deliveries may not have been done at the right time. For CIMCO the backlogs are a major concern where it is present in both recreational and industrial areas. A major source of risk for Toromont would be its limited geographical presence and infrastructure in markets. The company operates primarily in the US and Canada where 97.6% of the revenue generated from Canada while the remaining from other countries. This is a disadvantage in today’s globalized world where geography is not a barrier anymore, so the high dependence on the home country for revenues would be more prone to risk because of geographical threats. The industry itself is facing increasing
Toromont Industries Ltd. was founded in 1961 by eight private investors in Canada. The company’s stock was listed on the Toronto Stock Exchange in 1968. Toromont Industries Ltd. owns and operates through two business segments which are: The Equipment Group and CIMCO Refrigeration. The Equipment Group serves an estimated $5 billion markets and owns one of the world’s largest CAT dealerships in terms of revenue and geographic territory, which comprises of 36 branches in Canada. The dealerships sell Caterpillar products and specialize in industrial machines. Toromont Industries Ltd. also owns Battlefield- The CAT Rental Store which specializes in mobile equipment rental and compact equipment. There are 37 CAT Rental Stores. …show more content…
CIMCO Refrigeration operates 23 locations in Canada and the United States. Toromont employs approximately 4000 people in over 110 locations. The company is hoping to achieve an 18% after tax return on opening shareholders’ equity over a business cycle. Additionally as a performance objective, the company aims to earn threshold pre-tax returns on invested capital in the rage of 17%-25% depending on the business. The company uses a number of growth strategies to assume the title of market leader. They have policies to expand markets, strengthen product support, have more broad product offerings, invest in resources such as employee training and development, and of course to maintain a strong financial position. Toromont Industries Ltd. have a favourable employee-shareholder culture and they have diversified business with leading brands. The company is also enjoying a stable financial condition, with revenues, net earnings, and return on shareholder’s equity increasing in the last 3 years. The company is also witnessing an increase in stock prices from October 2013 after a period of stable prices. The company has also announced an 8% increase in its regular quarterly …show more content…
have been doing well in the recent periods after a series of instability primarily in 2010 when the company witnessed an overall decrease in every performance aspects. The economy is witnessing slow growth. A main area of concern would be the mining sector of Equipment Group, where they witnessed a 18% decline in mining revenue even though construction related markets such as road building and infstracture development have got better.So it can be analysed that the mining sector is not doing well and is witnessing a fall in revenue while the activities of Equipment Group appreciating. At the same time the high number of Equipment Group backlogs is to be taken into consideration, while the numbers are decreasing it is still high and it is stemming from the unavailability of equipment and the mining deliveries may not have been done at the right time. For CIMCO the backlogs are a major concern where it is present in both recreational and industrial areas. A major source of risk for Toromont would be its limited geographical presence and infrastructure in markets. The company operates primarily in the US and Canada where 97.6% of the revenue generated from Canada while the remaining from other countries. This is a disadvantage in today’s globalized world where geography is not a barrier anymore, so the high dependence on the home country for revenues would be more prone to risk because of geographical threats. The industry itself is facing increasing