Case Analysis of Kota Fibers, Ltd Essay

Options:-Portion of debt through insurance company-Continue at 90 day terms-Factor receivables-Collateralize assets-Mortgage general purpose building-Independent Canadian Financing-Flat dividends-Payment Terms - accelerate receipt-LIFO / FIFOEvery available option has a positive and a negative aspect to it. Here we will decipher what option gives Padgett Paper Products the best financial structure, provides the most flexibility for continued growth, and reduces the risk for all parties involved.

MTC initially needed to obtain substantial investment capital due to two main factors: a research-heavy industry, and the need to create most of the markets for its products. Although the founders' goal was to become a major manufacturing company, they did estimate that the company would need $50 million in capital before it would become self-sufficient. Their initial financing model was to first recruit a superior technical team, use that to attract additional equity investment and development funding from interested corporations, and then develop manufacturing capabilities. Commercial sales began 2.5 years after inception, and MTC is nearing the break-even point in 1990.

Higher credit limits given to the distributors also implies a high possibility of decrease in B&L’s operational cash flow (increase in AR)

Because they have faced cash shortage trouble. Their profitability has grown for 1993 ~ 1995 period, as we can see from their I/S (e.g. Sales and Net Income, etc.). However, as its business size grows, their A/R increased, which means that it is getting difficult to collect cash. On the other hand, A/P decreased for the same period, which means that the company paid cash for A/P, resulting in critical cash shortage. Furthermore, the A/P payment period is shorter than A/R collection periods, the company’s cash problem happens to be accelerated.

The Lawsons’ efficiency ratios are another section the bank will find troubling. The company’s age of payables has nearly tripled over the last four years. This can be detrimental to the company’s image and reliability including their reliability toward the bank if granted the loan. Along with increasing age of payables is increasing age of receivables and age of inventory. Indicating that Mr. Mackay is taking longer to collect his receivables and that he has purchased too much inventory. Too much inventory results can result in further issues

Parts Emporium Inc. is currently facing numerous problems in relation to their inventory system. Each problem could be considered both short-term and long-term because both problems need focus immediately but may take an extended period of time to furnish. The first problem is in relation to their customer service department. The customer service department puts

2. Weak Financial Performance A significant number of its vendors demand accelerated payments or require cash on delivery, such demands could have an adverse impact on its operating cash flow and result in severe stress on its liquidity. A downgrade in its credit ratings or a general disruption in the credit markets could make it more difficult for it to access funds, refinance indebtedness, obtain new funding or issue securities.

Q: Was the decision to attract ultra HNI customers through a separate dedicated branch a good idea?

Based on Next Annual Report and Account January (2011), the chief executive's review present the A New Normal of company overview, due to the changing consumer environment, Next PLC need to have New avenues of growth, and brand new way to control cost, also, it will be important that retailer have to generate the healthy cash flow with cautious management. Furthermore, enable to know how company efficiently use asset to generate revenue and whether there was improvement between 2010 and 2011, the activity ratios have to calculate out. The ROCE in 2010 and 2011 were 38.91%,41.79%, this number showed how profit generated by capital employed, and the growth figure of ROCE lead to level up efficiency asset used.((NEXT PLC, 2011 page43, 45) The figure for inventory turnover, receivable turnover, and payable turnover in 2010 and 2011 were 46.81 days, 54.98 days; 66.07days, 68.23 days; 83.36days,81.3days; respectively. (ibid) It is clearly show that the inventory and receivable turnover in 2010 was taken lesser day than 2011, in which means inventories took less day to sold out to costumer and the cash credit receive more faster than the 2011, besides, the payable turnover had longer period than 2011, it was also a good example to illustrate that there was more cash flow holding by company, and the overall image of these figure present that the resource had been

Even though the company has been turning in profits, the ineffective collection practice, not availing trade discounts on time and ineffective inventory management has led the company in need of larger financing needs.

As additional part of the covenants the bank placed importance on the net working capital. This could have positive impact to the firm’s future. As the firm is affected by liquidity problems, the covenants on net working capital will make Butler to

How has Aurora Textile performed over the past four years? Be prepared to provide financial ratios that present a clear picture of Aurora’s financial condition.

Utilizing the monthly forecast financial statement provided by Guna Fibres, Exhibit 1, it is necessary to create a statement of cash flows to begin to assess how the company’s capital is being managed through the working capital accounts of the firm. Exhibit 2 shows the breakdown of cash flows on a monthly basis based on the forecasted information provided by Guna Fibres. There are several important insights to point to instability within Guna Fibres. The first trend that is concerning is that according to Guna Fibres forecast, they will require a positive cash flow from financing activities through the month of June 2012 just maintain operations. Certainly, if this was to be presented to the bank there would be no chance that they would be willing to extend credit as Guna Fibres will not be able to zero out the debt balance in the coming months. Examination of Exhibit 3 shows the statement of cash flows for Guna Fibres for year ending in December 2012. Note the highlighted the cell that indicates the change in short term notes payable for the year in the amount of

The main problem of the company is that it couldn’t liquidate a seasonal working capital loan for the requisite 30 days each year. It reflects the company doesn’t have sufficient cash and they need more loan but the bank is reluctant to give any unless the company can give a reliable financial plan to show they can pay off their loan by the end of 2012. So, Mr Malik came up with a financial forecast for the month to month operation to gain the bank’s trust. Sadly, the forecast portrays it cannot afford to pay off its debt by end of 2012 and would owe a balance of IND 3,858.00. This

However, MacDowell Corporation believes that changing the relationship with San Fabian Supply Company will make it benefit more. On one hand, MacDowell has been marketing its products through an exclusive distributor only in the Philippines and the parent company wants to market the products same as in other countries. On the other hand, the demand for construction materials has decreased since the expansion of its plant in the Philippines before. MacDowell Philippines’ plant operating rate was very low, at only about 45% capacity, and the overcapacity plagued the company a lot. To get rid of this situation, MacDowell Philippines wants to increase sales and its new president believes that having more dealers can lead to more sales. So MacDowell wants to change the relationship with San Fabian Company in the