Flash Memory

Flash Memory, Inc. faces stiff competition in an industry that maintains focus on new development and is challenged with ‘short product life cycles’ (Pg.2). Their future will be predicated on how they invest their cash flows and generate new business. This process will involve generating new financing and developing renovated product lines. Flash Memory, Inc. specializes in the production of Solid State Drives (SSD) which makes up 80% of their revenue. The remaining 20% is comprised of high end/ high performance technology products that are distributed and purchased through the same avenues as their SSDs. Specific investments have been made by Flash to grow their SSD production due to an increase in market demand. In fact, sales revenue for SSDs has increased from 400Million to 5.3Billion over a 6-year period within the industry. Flash is well known for their production of this technology and as economic conditions have improved since early 2010 they have seen a large and rapid increase in sales. Despite this rapid increase in sales, a need for financing is leaving Flash with some hard choices to make. The CFO Hathaway Browne wants analyze the financial options that are open to Flash and determine what the best option for the company is. This decision is made difficult since there are many large players in this market and a potential for others to expand their production is rising. With an unsteady pace of growth, another competitor entering the market could greatly diminish the already sporadic sales that Flash is currently experiencing. The company has three options when considering financing their prospective product line. They can issue common stock that would generate an increase of $6.9 million dollars. Obtain additional funding through their factoring group. Or they can eliminate any new outside investments and use their current profits to finance the effort. We will break down the best options that Flash Memory, Inc. has in regards to financing and