DICOM VS Captiva Case Study Essay

1. What argon the key business success factors and insecuritys for DICOM and Captiva? DICOM is a Swiss come with that has gross revenue in Europe, Asia, and the get together States. They provide services ranging from structured, semi-structured, and uncrystallized information grab products. DICOM excessively sells hardware, primarily scanners, through its group sales force. DICOM has contraryiated their product offering for the contrastive regions that it opepaces. And the products that are provided are veritable through research and development and also acquisitions. This allows DICOM to provide a versatile set of products that can cover some markets and many different users.DICOM operates in the U.S. under Kofax capture software that was bought in 2004 and primarily offers the information capture softwares to their consumers. There are risks in this industry. DICOM operates in many different markets and is subject to inflation, interest, and foreign currency risks. DICOM operates in three different geographic segments that are managed independently of each other. Each market has their feature inherent risks and DICOM needs to be aware of every possible incident in order to remain prosperous. Captiva Corporation is a U.S. based company that provides similar services as DICOM. Captiva sells structure, semi-structured, and unstructured information capture products, alone also sells hardware.Captiva uses its own research and development, as healthy as strategical acquisitions to provide customers with the different types of information capture products. Captiva sells primarily in the United States, but is able to sell in the areas of insurance, fiscal services, technology, government, and manufacturing. Involvement in so many distinct markets allows Captiva to fudge their risks better against harsh sparing times and different interest rate risks. Additionally, Captiva has a large string of resellers, which accounts for nearly 39% of revenues.F uture profits will best be achieved by leveraging to existing customer base, increase reseller sales, moving into bare-ass markets, and broadening the product offering. But like DICOM, Captiva has business risks that they need to be aware of in their industry. Captiva has 80% of their sales in the United and States and cannot hedge their risks if a crisis develops in that country. Captiva has a large amount of revenues coming from resellers and a drop in this segment could lose the company millions.2. Do the financial statements for the twain firms enable you to comparability their performance? If not, what changes need to be do to ensure comparability? The financial statements are for two different political requirements from two different countries. DICOM operates under the European system of IFRS and Captiva operates under generally accepted accounting principles. With this said, proficient brassing at the financial statements makes it extremely difficult to determine perf ormance. To be able to make a comparison between the two companies easier, their needs to be a reconciliation of the two different accounting systems. IFRS and GAAP need to be put together to form one soul accounting entity. What exactly need to be changed are the standards. When looking at the balance sheet, you are able to see just how different the systems operate. In GAAP, cash is the number 1 line, but in IFRS Fixed pluss are the first line. Changing to a consolidated system would allow for the best panache to make an accurate comparison between two firms in different geographical regions.3. What financial ratios would you use to judge performance of DICOM and Captiva? How do they compare on these dimensions? The financial ratio used to give us a better assessment of performance is return on equity. Return on equity is the amount of income earned from shareholder investments. And this gives us a look at how much money a company is able to amaze from their shareholders. Ret urn on equity is profit margin X asset turnover X financial leverage. The table below shows the ROE for the two companies in the periods of 2003 and 2004. As we can tell from the chart, Captiva earns more money per buck of shareholder investment than DICOM.To further get a better understand of the companies, we can use financial, liquidity, and debt ratios to measure performance. DICOM has a better return on assets than Captiva, but not by much. So, we can determine that they both are similar in this area. Captiva has higher gross margins and lower debt than DICOM. So, it is predictable that Captiva has get at to money faster and can leverage this pool of resources to invest in R&D and acquiring new companies.4. Which company do you rate as the better investment? WHY? Both companies are in a fast paced, technology based industry. Before investing, you need to do the proper due diligence into all functions of the business before investing. In this case, it is decided that we would invest in Captiva. Captiva is a U.S. based company that is modify into many different sectors. They sell to government, insurance, technology, and manufacturing. This would help them hedge against economic risks.Captiva is also not as affected by inflation, currency, and interest rate risk as DICOM. Captiva also is currently providing a higher return on equity on their investments. This shows that the money that is provided is being used efficiently. Captiva seems to be doing well in the U.S. domestic market and has a secondary reseller section that provides perceptual constancy and consistent revenues. Captiva seems to be the company that can provide the growth and competent returns on investments that we are currently look for.