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Massey Ferguson Case

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Massey Ferguson Case
BUSS384 - Individual Case Questions:
“Massey-Ferguson, Ltd. (1980)”
Due by 10:30 am on October 30
You are responsible for handing in written answers to the following questions drawn from the Massey-Ferguson case. You can work with others on this assignment, but each individual must hand in their own set of answers.

1. Net sales for Massey-Ferguson actually increased between 1979 and 1980. Despite this, net income and income from continuing operations both dropped sharply in 1980. Which item on the income statement was most responsible for this drop in income?

2. Why would the Canadian government have any interest in helping Massey-Ferguson refinance its debt?

3. Why would it be difficult for Massey-Ferguson to conduct an equity issue to pay down its debt? Discussion question: You do not need to hand in an answer to the following questions. Think about these questions when you read the case material.
What options would Massey have in response to its financial distress? What should the firm do to survive in the situation?

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