SARA LEE ATTEMPTS TO CREATE VALUE THROUGH RE STRUCTURING

Sara Lee Attempts to Create Value through Re structuring

Sara Lee Attempts to Create Value through Re structuring

Creating Value through Restructuring

Creating Value through Restructuring

Introduction

Thesis Statement

“Restructuring can have a both a positive and a negative impact over the financial health of a business and creating value for the firm” (Baker, 2009).

Purpose of Paper

Sara Lee would have on the financial performance of the business and how it would help to contribute to providing returns on the investments made by the shareholders in the business. It will be analyzed whether or not her decision to restructure the organization is able to overcome the declining returns that shareholders have been receiving in the form of dividend. Since Sara Lee Company has been considered as the one of the companies that has not been able to manage its operations effectively and it is one of the worst managed companies. Sara Lee has been making efforts to restructure her business with the objective of earning higher profits and creating value for its shareholders by making business compatible that would bring a rise in the stock price of the firm's goods and services that are being offered to its customers (Baker, 2009).

Overview of the Paper

The paper would comprise of discussing and evaluating the performance of Sara Lee's business, how her decision to restructure would enable her to meet the targets and the objective to create value for the shareholders. Analysis will be conducted by looking at the business operations of Sara Lee from various aspects. After restructuring the company by splitting it into two publically traded companies, a new firm called Hanes Brands Inc. was formed that has its main focus on the businesses of food, beverages, and households and body care. This firm was able to generate cash for the business and the decision was made to be distributed to its shareholders however it is significant to analyze of this would help the company to retain its investors and payoff for the dividends for which the growth rate has been declining (DePamphilis, 2011).

Discussion

Restructuring can take either of the two forms it can be an organizational or operational restructuring or restructuring the capital structure of the business that is to determine the proportion of the sources of funds. Operational restricting is done usually if the firm is facing the problem of inefficiency or it has not been able to ...