Managing Growth Assignment
Managing Growth Assignment
FIN/571
Kent Kelly
February 16, 2015
Suzanne Elliot
During the past six weeks, this class has provided tools to help analyze financial statements for Sunflower Nutraceuticals with accuracy in order to make a precise educated decision in the working capital simulation. The following decisions were made as each phase and how they influenced the final outcome and the impact on SNC’s working capital and access to financing. Sunflower Nutraceuticals (SNC) is private owned company that distributes all of the vital supplements such as minerals for consumers but mainly women and herb’s for a women to retailers. Founded in 2006, SNC expanded its operations to various outside outlets becoming successful in producing their own brands of vitamins for teenagers, brands of sports drinks, metabolism- boosting powders and other products to enhance the metabolism in humans. SNC has the potential to becoming a nutraceutical distributor but has struggled as late forcing the company to exceed its credit line to $300,000. With only 12% used to evaluate and reinvest into new opportunities they may result in a good return.
There are five principals used in capital investment on how to invest in the cash flows and growth of a business. These principles are cash flows dependent on opportunity cost, post-tax analysis, when to inject cash flows, cash flow results and project return rate.
These are the principals there were used when working the capital simulation task and in making decisions. During the first phase which was from 2013-2015, I chose the acquisition of a new customer such as Atlantic Wellness. This has led to an increase in sales during that period which also resulted in higher inventory balances and account receivables. This decision was made to bring in a new customer to add to the cash flow of the company which is a key principal when it comes to capital investment.
The second decision was to leverage supplier discount, translated
FIN/571
Kent Kelly
February 16, 2015
Suzanne Elliot
During the past six weeks, this class has provided tools to help analyze financial statements for Sunflower Nutraceuticals with accuracy in order to make a precise educated decision in the working capital simulation. The following decisions were made as each phase and how they influenced the final outcome and the impact on SNC’s working capital and access to financing. Sunflower Nutraceuticals (SNC) is private owned company that distributes all of the vital supplements such as minerals for consumers but mainly women and herb’s for a women to retailers. Founded in 2006, SNC expanded its operations to various outside outlets becoming successful in producing their own brands of vitamins for teenagers, brands of sports drinks, metabolism- boosting powders and other products to enhance the metabolism in humans. SNC has the potential to becoming a nutraceutical distributor but has struggled as late forcing the company to exceed its credit line to $300,000. With only 12% used to evaluate and reinvest into new opportunities they may result in a good return.
There are five principals used in capital investment on how to invest in the cash flows and growth of a business. These principles are cash flows dependent on opportunity cost, post-tax analysis, when to inject cash flows, cash flow results and project return rate.
These are the principals there were used when working the capital simulation task and in making decisions. During the first phase which was from 2013-2015, I chose the acquisition of a new customer such as Atlantic Wellness. This has led to an increase in sales during that period which also resulted in higher inventory balances and account receivables. This decision was made to bring in a new customer to add to the cash flow of the company which is a key principal when it comes to capital investment.
The second decision was to leverage supplier discount, translated
References: Cole S (2015), ‘Fixing Market Failures or Fixing Elections? Elections, Banks and Agricultural Lending in India’, American Economic Journals, Applied Economics Ross S, Westerfield R, and Jordan B, (2015) ‘Fundamentals of Corporate Finance’, The McGraw-Hill/Irwin Series.