cam case cost4life inc
To: Cost4Life Inc.
From: Mr. Pat Brown
Subject: Strategic Recommendations for the cost saving and revenue generation during upcoming industry downturn.
Date: 21st January 2014
Table of Contents
Introduction 3
Identification of Issues 3
Major Strategic Issue 3
Identification and Prioritization of Issues and Alternatives 4
Alternative 1: Divesting the Fraser dry dock 4
Alternative 2: Targeting more profitable market segment 4
Alternative 3: Register ship in Liberia and hiring low wage work force 5
Alternative 4: Implement a Web based booking system 5
Recommendations 5
Implementation Plan and Financial Forecast 6
Appendices 7
Ratio Analysis – Appendix 1 7
Alternative Analysis 1 - Appendix 2 7
Alternative Analysis 2 - Appendix 3 8
Alternative Analysis 2 - Appendix 4 8
Alternative Analysis 4 - Appendix 5 8
Pro-forma Financial Forecast – Appendix 6 9
Introduction
Overall Cruise Industry is facing downturn in the business during upcoming year. Coast4life is determined to remain profitable during those times without compromising on overall company values. This report aims to provide best suitable alternative with company’s desired 16% after tax return bottom line.
Identification of Issues
• Decline in overall bookings for cruise by 50%-55% over next six months and 30%-35% there after.
• $3.6 million incidental expense required for the hull repair of Coastal native.
• Liquidity ratios for 2012 indicate that company will be able to survive and fulfill liability obligation in coming downturn. Also there is significant improvement in company’s liquidity over past years. (Appendix 1)
• Debt to Equity ratio for 2012 is 1.23 that shows 17.44% improvement over last year. Company is less dependent on debt. (Appendix 1)
• Profitability ratios indicate significant improvement over years. Increasing amortization and interest expense can be a problem in an even of decline in sales.
From: Mr. Pat Brown
Subject: Strategic Recommendations for the cost saving and revenue generation during upcoming industry downturn.
Date: 21st January 2014
Table of Contents
Introduction 3
Identification of Issues 3
Major Strategic Issue 3
Identification and Prioritization of Issues and Alternatives 4
Alternative 1: Divesting the Fraser dry dock 4
Alternative 2: Targeting more profitable market segment 4
Alternative 3: Register ship in Liberia and hiring low wage work force 5
Alternative 4: Implement a Web based booking system 5
Recommendations 5
Implementation Plan and Financial Forecast 6
Appendices 7
Ratio Analysis – Appendix 1 7
Alternative Analysis 1 - Appendix 2 7
Alternative Analysis 2 - Appendix 3 8
Alternative Analysis 2 - Appendix 4 8
Alternative Analysis 4 - Appendix 5 8
Pro-forma Financial Forecast – Appendix 6 9
Introduction
Overall Cruise Industry is facing downturn in the business during upcoming year. Coast4life is determined to remain profitable during those times without compromising on overall company values. This report aims to provide best suitable alternative with company’s desired 16% after tax return bottom line.
Identification of Issues
• Decline in overall bookings for cruise by 50%-55% over next six months and 30%-35% there after.
• $3.6 million incidental expense required for the hull repair of Coastal native.
• Liquidity ratios for 2012 indicate that company will be able to survive and fulfill liability obligation in coming downturn. Also there is significant improvement in company’s liquidity over past years. (Appendix 1)
• Debt to Equity ratio for 2012 is 1.23 that shows 17.44% improvement over last year. Company is less dependent on debt. (Appendix 1)
• Profitability ratios indicate significant improvement over years. Increasing amortization and interest expense can be a problem in an even of decline in sales.