Wednesday, September 11, 2019

Corporate Finances Case study Research Paper Example | Topics and Well Written Essays - 750 words

Corporate Finances Case study - Research Paper Example In this case, the business has to take some precautionary measures to cushion the business form such financial meltdown. In a business, it does not matter the amount of profit your company is making in a day, a month or quarterly, the most important thing to ensure is the continuity of the cash flow of the business. In this case a cash flow forecast is important and an integral part of any business successes. Without doing the forecast, one is destined to have problems in paying suppliers as well as meeting the basic business financial obligation and this will results into failure of the business to operate (Ross, & Westerfield, 1996). In this regard based on the information of the cash flow of the business, there are several options open for the business to evade the financial crisis. There are several ways of mitigating on a looming cash flow crisis; these are considered depending on the analysis of the business performance and cash flow. In the case of Manson the following are considered; The mainstream sources of cash flow are the revenues collected from sales of the business products. Mason Corporation must then ensure that they constantly meet the projection of the sales to ensure collection of sufficient cash (Ross, & Westerfield, 1996). Money borrowed to make up for a looming financial problems associated with poor cash flow are not always the best option. The business should ensure that the sales targets are met and that there is no viable market that is left unattended to. For instance, if a business has the potential of making sales of up to $ 2 million and manages only $1million, this will imply that the business will be short of the $ 1 million untapped. This always makes businesses to opt for other sources of income to meet their financial obligation, which are paid at extra cost. Mason should thus endeavor to rationalized its credit policy and significant reduce the debtors. Mason

No comments:

Post a Comment

Note: Only a member of this blog may post a comment.