-9- market price to provide a return. Dividends were therefore important to shareholders, and Kohler recognized that. The Plans Kohler generally used two types of projections to plan for its business. These projections were called the management plan and the operations plan, and each had different uses. The management plan was a set of achievable targets and reflected the realities of the business and management’s best judgment of where the company would be. The management plan was given to outsiders intending to transact with Kohler, such as insurance companies and banks. Kohler also used the management plan internally for capital planning, acquisition planning, and tax planning. Management intended the management plan to be a good predictor of the company’s performance and updated the management plan throughout the year to reflect Kohler’s actual results. Kohler also developed an operations plan, which was a projection of what could theoretically be achieved in a perfect environment. The operations plan was built on the assumptions that each business unit would maximize its results and no contingencies or unforeseen events would occur. The operations plan was not generally updated throughout the year to incorporate new information or unforeseen events. The management plan projected earnings for 1999 to be below those for 1998 and 1997, reflecting the difficulties in thePage: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 Next
Last modified: May 25, 2011