Domtar Business Analysis Research Paper Example | Topics and Well Written Essays - 2000 words

Domtar Business Analysis - Research Paper ExampleDomtar has exhibited excellent immediate payment flow over the last few years. The cash flow is anticipated to rise to an average of 9% in the bordering one year. Domtars income has been declining considerably though is still considered to be performing well as compared to other companies in the same industry. Domtar Products Domtar specializes in a wide range of fiber-based products. The products include digital printing papers, specialization papers, EarthChoice papers, publishing papers, commercial printing papers, Business papers, as well as office papers. It is currently homework to start manufacturing packaging papers. Additionally, Domtar engages in the manufacture of paper grade, lumber, wood products, in addition to specialty human body. Domtar sells its products to a wide range of customers such as merchants, retailers, printers, converters, publishers, as well as end users. Domtar sells its product in spite of appear ance Canada, North America and exports to other regions of the world such as United State, which is one of the main customers (Ivara, 2012) Domtars Financial Health Financially, Domtar has been performing considerably well. It is considered the second largest paper industry in the world in terms of financial standings. In the financial statement issued on July 27, 2012, which showed the financial performance for the second drag of 2012, the report showed the considerable go down from that of the previous year. The company reported an operating income of $106 million. Although this was excellent compared to other companies in the same industry, it was, however, a decline from $ 109 million reported in the first delineate for the year 2012. The decline was attributed to increased maintenance costs in addition to reduced shipments for pulp as well as paper. However, the market prices had increased considerably which helped offset the losses, which could have been higher. However, Do mtar is anticipating worse times in the third quarter due to the challenges facing the pulp markets such as the declining demand for both paper and pulp shipments. Domtar management is planning to counteract the anticipated losses by converting the less needed communication paper to differentiation as well as packaging papers, which are still in higher demands. Additionally, Domtar hopes to increase the prices of pulp (Domtar, 2012). The cash flow from functioning activities amounted to about $30 million in the first quarter of 2011. The crownwork expenditures were approximately $29 million. By March 31, 2012, which marked the end of the first quarter of 2012, Domtar paid $47 million for outstanding premiums and recorded a free cash flow amounting to $48 million. This demonstrates strong cash flow. Additionally, Domtars cash flow is expect to average improve further in the future. Domtars line price has outdone the benchmark in the first quarter of 2012. Investors are expected t o increase their shareholdings. Additionally, the shares are expected to continue exchanging at bargain basement levels (Domtar, 2012). Any company has the main goal of increasing the assess for the shareholders.