ly, one can detect a high volatility (2% to 157%). This high volatility suggests a degree of uncertainty over future profit performance. Because the Australian market in counter cyclical to the United States’, the entrance to the Australian market may smoothen the net profit of Richardson’s manufacturing, providing a more stable profit behavior.As mentioned earlier, Richardson has a strong demand for its products within the United States market as sales continue to increase. Because of their experience and knowledge of this market, Richardson has not been required to spend large amounts of money on marketing its product to the domestic market. However, it must be noted that the percent of increase over the last four years has decreased (down 6% from 1999, and 13% in comparison to 1998). Richardson’s cumulative growth of expenses has increased over the same period of time, in addition to experiencing a decline in its total assets (down 3%). Although Richardson has experienced an increase in sales and profits over the last four years, the decline in the growth percentage in these areas may imply that the demand in the United States for Richardson’s products is currently decreasing. Richardson may desire to ascertain a plan to counter this by increasing sales to maintain increasing percentages of sales growth, net profits, assets, and total net worth. One consideration for Richardson is to enter the market in Australia.Currently, the Australian market offers a high demand for Richardson’s product, especially in the Queensland area. In addition, there are few to no other substitutable products being manufactured in Australia which offer them the same proficiency in farming. The Napier Bros. Company is willing to cooperate and engage in the importation/distribution of Richardson’s mulchers. As the demand for such product increases in the Australian market, they continue to consider the possibility of event...
