Xerox
1.Focus on the Xerox’s financial statements right around the time of a critical time for the company. Illustrate and examine all the issues; analyze their financial situation, consequences,consistency with their strategy. 2. edit and search more detail about xerox (plz check the file). need to write:
-introduction
-description of their strategy/products
-conclusions/ recommendation
Xerox Corporation is an American multinational document management company with its headquarters in the United States and operations in many other different countries.
It has a wide range of products such as producing and selling a range of color and black-and-white printers, multifunction systems, photo copiers, digital production printing presses, and related consulting services and supplies and fax machines. It produces printing and office supplies such as paper that take many forms, as well as solid ink that uses the 2400 FinePoint technology. Xerox markets software such as Xerox DocuShare, Xerox Market Port and Flow Port, and offers consulting services, as well as printing outsourcing through ECM Digital Repository Services
Xerox adopts various strategies in its market approach. This is based on hardware manufacture and sales as well as improvement in quality design of its products as well as realignment of its product line to take into effect changes in personal computing. A revamp of its entire product range by creating big end laser printers with connection to computer networks has also been used.
A major strategy of Xerox is to turn its product range into services. After supplying customers with the products, it provides maintenance, configuration and user support after the supply. It’s branding of Xerox as the “Document Company” reinforces its place in document service acts as a big marketing strategy and asserts its place in the documents market segment.
Introduction of new product lines is one of its biggest operational strategies. Focus of the company on copiers and desktop business has helped it manage to provide the document service package.
In the late 90s Xerox was on an expansion and acquisition drive. It acquired Tektronix colour printing and imaging division in Wilsonville, Oregon, for US$925 million that brought Xerox Phaser line of products and Xerox solid ink printing technology under its stable. Despite these acquisitions, it had been suffering deep financial crises in the previous years. Increasing debt, inflated interest rates, poor operating revenues, decreasing cash as well as reduced investments in research and development plagued the company.
So as to appease the investors and maintain investor confidence as well as the share price and reputable credit ratings, the company hid its losses during accounting reporting The company wrongly inflated its earnings over a 4 year period by overstating the correct and true equipment revenues by at least $3 billion true earnings by approximately $1.5 billion before the exclusion taxes, minority interest and equity income known as pre-tax earnings.
This came into light after Xerox was accused by the United States Securities and Exchange Commission of employing ‘accounting maneuvers’ which changed the amount of revenue realized with earnings from various sources irregularly recorded. This included copy machine leases shown as sales in only one year and not spreading the earnings across. Later Xerox auditors KPMG were sued by SEC for allowing Xerox to inflate its earnings both revenue and pretax earnings by more than a billion dollars.
KPMG LLP, Xerox auditors, and its partners permitted Xerox Corporation to manipulate its accounting practices and records so as to fill the differences between actual operating results and results reported to the investing public from 1997 through 2000. Xerox then claimed to meet performance expectations financial analysts and it in turn this mislead investors in an attempt to boost the company’s stock price.
Conclusion
Xerox need to maintain credit ratings and investor confidence in the face of a poor operating period led to unethical accounting principles. Nevertheless it has managed to restructure and rebound regaining investor confidence.
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