Use of Financial and Accounting Tools Management Case Study (Case Study Sample)

MANAGEMENT REPORT
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MANAGEMENT REPORT
Executive summary
Firms have corporate plans that involve expansion through product or market development. Golden Limited is one such company with subsidiaries abroad and seeks to have the subsidiary as independent as possible. This means that Golden Limited as a subsidiary of Awards Group does not have to regularly rely on the parent firm for funding and expansion decisions. The UK-based company is looking forward to securing a loan facility of $20,000 from a UK or European bank. While the company has access to equity funds, the choice of debt is basically to increase leverage without changing the shareholding structure. Equity funds have more costly than the cost required to source for debt. Upon securing funding, the company made fundamental capital budgeting decisions. The decisions to invest in certain projects were informed by the viability of key products through break even analysis. The production performance of the firm is likely to be affected by Brexit and availability of new technologies.
This report recommends implementation of Major Promo project because it had higher NPV ($9.49million) compared to $3.62million for Major Package. Major promo had higher IRR values and shorter payback period compared to Major Package. The report also recommends Golden Limited to sell 741 units of Single Tool Set (STS) and 478 units of Multi Tool Set (MTS) for it to breakeven. The best combination of sales for the period to hit the target units of 1305 is $426,890. STS will produce the most income for Golden Limited because it takes a shorter time to attain the target income of 1305 units compared to MTS. The cash budget showed a net cash position ($508.27) because the company had low levels of cash sales. The loan facility will improve Golden Limited’s financial leverage without changing the shareholder structure.