The Case Involves a Methodology that Could be Used to Solve the Problem (Case Study Sample)
So basically, you need to write a strategy papers, two
pages. You need to follow the requirements below: Strategy
Papers Each student, not presenting/interrogating, will write
a two-page paper which provides a methodology that could
be followed to actually solve the case. The strategy paper
need not be an actual solution to the case -- it may simply
explain how one would go about solving the case, step by
step. The strategy paper is being prepared for the approval
of a senior financial manager who is completely familiar
with the background of the problem. Therefore the strategy
paper should skip background details and deal only with
recommended procedures. The paper is procedural rather
than descriptive. The level of detail that is appropriate in
describing the procedures depends upon the objective of
the particular case. For example, If an important objective
of the analysis is to determine the amount of additional
funds that will be required to support a new project then it is
obviously not sufficient to make a statement such as: "Step
3, determine the additional funds requirements." Instead,
exact and detailed procedures should be outlined for
determining the amount of external financing required,
being careful to identify any peculiarities or complications
that are unique to that particular case. Although I
encourage you to discuss the cases with other students,
strategy papers are to be individually written. I will scan,
and record a check for each paper. In addition I will
carefully read a random selection of your papers. Strategy
papers will be printed and double spaced. For the case, you
need to read the PDF of the book I provide below, read the
case "Kelly Services,Inc" through page 99 to page 107. And
please write with 2 questions for the case which I can ask in
my classmate's presentation and relate to the case. Can be
like how you get the (data).
Kelly Services enjoys increased growth and profitability without obtaining any debt financing. These circumstances are intriguing to Mr. William Murry, whose professor taught him that using debt is less expensive than equity. To solve this problem, Mr. Murry wants to prove to his colleagues that increasing debt also increases shareholder value by establishing the source of the value of leverage. The first step is to analyze Kelly’s performance compared to its competitors, Olsten, and Volt. Calculating the financial ratios from the financial statements will help determine whether Kelly Services outperformed or underperformed the competition over the previous years. Data from the four exhibits give an overview of the market conditions useful in comparing both equity-based and debt/equity-based financial approaches.
The second step is projecting a debt/equity-based model for Kelly Services. Given that this approach transfers part of the leverage to new shareholders, Mr. Murry’s findings have to indicate that earning for current owners will increase and remain sustainable. The company’s expansion ambitions require additional financial backing, whether through finding investors or using the family’s funds. Projecting both financial models will help estimate the interest rate on long-term debt, the tax rate on income, and the payout ratio to all parties. This approach will require detailed technical analysis to capture all variables that affect the business environment.
The next step is performing a weighted SWOT analysis to evaluate the strength of the strategy. Forming a SWOT matrix to highlight internal and external strategic factors and determine that increasing debt increases shareholder value is crucial to Mr. Murry’s case. Given that Olsten is the more successful of Kelly’s competitors, and it has no long-term debt, Mr. Murry has an uphill task of convincing the management of Volt’s debt/equity-based model. Volt’s statements have the highest debt levels, but the company still enjoys a high rate of return.
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