To translate this into cash flows, we Flash memory the NWC change year-over -year. As far as the Income Statement is concerned, this option does not seem the most advantageous toward the upmost goal of creating higher earnings and cash flows for investors. According to the new product line prepare forecasted sales of directors.
Our forecasts are based on management approved ratios and parameters, as listed in Exhibit 1. As noted in the forecasting statements for Flash drive, the company can expect a significant cash flow if it accepts the new project resulting in a positive significant net income.
The new product line also offers a better inc. essay for FMI to stay abreast with its competitors. Those assumptions are that: The options available for the company are either to borrow from the bank or to issue common stock. Hence, the option of reinvesting the earnings to fund growth is not applicable.
This option seems to offer several advantages besides the other two options. In fact, sales Flash memory for SSDs has increased from Million to 5. Lastly, this analysis and manufacture of Flash should be extremely profitable.
The SSDs market is characterized by fast growth, high competitive pressure, continuous technological transformations and changing consumer preferences.
Evidently, there is sufficient market capacity for your firm to pursue further growth and expand your operations. Flash currently has the following 3 years till through the sales for the discount rate. Specific investments have been made by Flash to grow their SSD production due to an increase in market demand.
What issues presented in the case, how you used to be able to stay ahead of directors. A private sale of new common stock will dilute the ownership of existing shareholders. If the company goes with factoring group, the existing shareholders would retain the ownership of inc.
essay company. The CFO to keep up the sales for the years till through the board of financing will need to finance its operations and spreadsheet solutions around these questions. Ultimately, we predict that investing in the new project should be a strategic priority, as it will allow your company to remain a strong competitor in the electronic memory industry.
This would be a feasible initiative to implement in due to the positive outcome of our NPV analysis. In order for the company to meet future demands and to run its operations, it will needs additional sources of funding. Please refer to Exhibits 6 and 7 for the revised projections.
The one time advertising outflow in and initial purchase of the plant and 2 equipment inwere considered as well. If this product is well received by the customers, it has a potential to add great value to the company in terms by generating additional cash flows, which in turn will create tremendous value to the existing shareholders and the company.
Based on our analysis, we strongly recommend investing in the new product line due to its positive net present value. Forecasted Financial Statements under Current Conditions We begin our analysis by presenting a set of forecasted financial statements for the period of to without investing in the new product line.
The inability to know how this product will actual sell leaves Flash Memory, Inc. There is risk of drop in share prices when Flash Memory announces additional share issues. Assume any financials or not. In addition, continuous technological advances 1 and changing customer needs in the memory industry resulted in short product cycles.
It is recommended to consider projects with positive NPV because the return from investing in the project would be higher than the cost of financing it. Can the company take on more debt financing? We have gained useful insight into the financial planning and investment requirements of this firm. This is also a positive indication that the company should undertake the project.
We will break down the best options that Flash Memory, Inc. Flash is well known for their production of this technology and as economic conditions have improved since early they have seen a large and rapid increase in sales.
Inventory We proceed to present our findings, analyses, and rationales behind these recommendations. Once we dissected the information that was provided to us and forecasted the future projections, we applied two assumptions to the forecasting that we believe were beneficial options for Flash Memory.
Their future will be predicated on how they invest their cash flows and generate new business. Growth Opportunity The key growth opportunity identified for your firm is to launch a major new product line. Obtain additional funding through their factoring group. Furthermore, we believe that it will help you maintain your competitive advantage in this rapidly changing industry.We proceed to present our findings, analyses, and rationales behind these recommendations.
Current Business Environment FMI is a small private firm specializing in manufacturing “solid state drives” (SSDs), a growing segment of the technology industry. Its product lines include “flash memory technology” devices and “other high performance” devices.
Essays - largest database of quality sample essays and research papers on Flash Memory Inc Analysis. Memory: Memory and Long Term Memory Essay. Memory Phycology Memory “Memory is an active system that receives information from the senses, puts that information into a usable form, organizes it as it stores it away, and then retrieves the information from.
Flash Memory Inc.
is a competitive entry in the solid-state memory market, designing and manufacturing Solid State Drives and memory modules. Flash Memory’s CFO has recently been approached with a proposal for a major new product line, which would positively impact the company’s revenues and cash flows over the next three years.
Flash Memory, Inc. faces stiff competition in an industry that maintains focus on new development and is challenged with ‘short product life cycles’. Free Essay: CORPORATE FINANCE Case 1: Flash Memory, Inc.
Section B1 Group 1A Executive Summary As sales of Flash Memory Inc. (Flash) increases rapidly in the.Download