Company Financial Position - Book Report/Review Example

Oral Case Reports1. Bridgeport ClothingPurpose of the case: Evaluate whether the company is in a position to qualify the revolving loan. The company stands the risk of violating the loan agreement. This will result in the bank calling the loan and BCI losing its assets.Different financial forecasts between the CFO and the corporate banker. The corporate banker raised red flags while the previous one did not. Despite the banks financial position, the bank is still willing to work out a plan beneficial to all.

Key financial concepts of the case include revolving loan, inventory turnover, and receivablesConclusions: The Company’s financial position raises its credit risk. 2. Barely Edible CompanyPurpose of the case: Perform credit analysis of the Barely Edible CompanyCompetitive analysis: The structure of the company, unique product, and its class as premium fast foods gives it a competitive edge over the competitors. The $25 million loan will improve the company’s financial statements, boost the assets from the acquisition of real estate, and equipment to expand the restaurants elevates the company’s competitive edge.

Key financial concepts: Initial Public Offer (IPO), scenario analysis, and financial ratiosConclusion: The Company displays growth that is improving its financial position.3. The Jumbo CorporationThe company’s financial structure consist of common stock flotation costs of 5%, Jumbo’s capital structure bonds -8%, $1000 par, 15 years to maturity, cost of new debt 9%. The Expected growth of 12.5% IRR ProjectC 13%, with a common stock price $ 30.Key financial concepts: earning per share, and annual cash flows4.

General Motors –Europe: Purpose of the case: analyze the effects of foreign currency exchange on GM’s financial performance in the European markets. Key financial concepts: international foreign exchangeIndustry and its closest competitors: GM developed a coping strategy to compete effectively by initiating a multi-country supplier diversification in the home country of its suppliers. However, the decision to diversify production location increased operating cost that led to poor performance.

GM’s performance in the European markets remained poor despite the steps taken to improve its competitive advantage in these markets.Conclusion: GM’s performance in foreign markets reflected the general performance of their competitors who also performed poorly in foreign markets.5. Everlast Purpose of the case: the case aimed at presenting the prospects of investing Arabia and the impacts of foreign markets on the projected returns. The low cost of building a plant in Arabia will give Everlast a competitive advantage in several ways.

For instance, the cost of building a plant in Arabia is lower than building a plant in Europe. According to the case, the tax cuts and tax exemptions during the projected seven years of operationwere facilitated by the use of fixed currency instead of the floating Arabian pounds.Key financial concepts: expropriation, repatriation, fixed exchange rate, as well as devaluationConclusion: Building a plant in Arabia will bring more returns due to tax cuts and low operational costs.6. Meredith CorporationPurpose of the case: this study aimed at discussingtheways of raising $50 million capital to boost the company’s profit margins.

The board members disagreed on the best way to raise the capital based on the company’s weak financials.Conclusion: Any method of raising capital carries risks that may harm the company in the end.Key financial concepts: stock and bond options, indentures, and Earning per Share (EPS)