Harnischfeger's turnaround plan included a four-phase approach that included (1) changes in top management, (2) cost reductions to lower the break-even point, (3) reorientation of company operations and (4) debt restructuring and recapitalization. At first glance, it appears that these changes allowed Harnischfeger to improve its financial performance from a net loss of $3.49 per share in 1983 to a net gain of $1.28 per share in 1984. Furthermore, Harnischfeger appears to have achieved the majority of desired results. desired results from each of its four changes, as shown below. • Harnischfeger's desired results from hiring a new COO and Vice President of Finance and Administration were to rebuild investor and creditor confidence in the company and show them that it is taking serious action to improve its performance starting from a new executive team. New investor interest in the company, such as Mr. Peter Roberts, and bankers willing to extend credit to Harnischfeger again after failing to meet working capital, quick ratio and net worth requirements, demonstrated that Harnischfeger was able to improve your image. • The desired outcomes of cost reduction, such as reducing the workforce by nearly half and eliminating management bonuses, are to reduce the cost of goods and increase operating income. Although Harnischfeger's cost of sales (COS) increased from 1983 to 1984, the company appears to have reduced its COS relative to sales from 81% to 79%. Additionally, it increased its operating profit from $62 million in 1983 to $90 million in 1984. • The desired outcomes of the reorientation of the company's operations were to reduce the risk of price increases, decrease costs, and increase in sales. These desired outcomes have already reached the halfway point of the document... or renegotiate credit agreements with banks. However, the liquidity was the result of structural changes and would not have had a significant effect on the company because it is unusual and infrequent (the $15 million extraordinary receivables also fall into this category). The financial report must be consistent year after year. A company should perform the same or similar activities, especially operational activities, to generate “money” each year and recognize the “money” as profit. However, this is not the case with Harnischfeger. We doubt the company will perform well in the future. The company reported a modest profit this year because it reduced operating costs, not because it increased operating revenue. Given that Harnischfeger did not generate its profits through operating activities, it would be too risky to predict whether its stock price will reach $6.00 per share during the period. 1986-87.