Star River Electronics
I. STATEMENT OF THE PROBLEM
Star River Electronics is a CD-Rom manufacturing company based out of Singapore. Star River was founded as a joint venture between Starlight Electronics Ltd., and an Asian venture-capital firm called New Era Partners. Star River became favorably recognized as a supplier of high-quality CD-ROMs as the industry grew quickly during the mid to late 1990s.
New Chief Executive Officer Adeline Koh is tasked with navigating the CD-ROM manufacturing company through tough times as DVDs threaten to render the current business model of the company obsolete.
Problem: Use historical data and sales projections to forecast the conditions of the company for the next two years in order to find Star River’s debt requirement. Also provide Koh with a substantial financial report.
II. ALTERNATIVE SOLUTIONS 1. Review Historical performance and give feedback 2. Build simple forecast of performance for next two years 3. Find the discount rate of new packaging machine investment.
III. ANALYSIS OF ALTERNATIVES
First and foremost it is necessary to address that the alternative solutions in this case is a list of several analyses which are used in conjunction as opposed to one being chosen amongst the list. The list will give Adeline Koh a more complete look at the financial condition of Star River Electronics in order for her to be more equipped to make business decisions.
When analyzing the historical data of the company it was very easy to find that there are several operating and financing flaws that can be potentially dangerous for Star River. One of the more notable of these financing flaws is the drastic spikes in short term borrowings shown in the balance sheet. This is something that must be addressed as the company moves forward. On the operating end of the spectrum, the Inventories to Cost of Goods Sold ratio is a cause for concern. This figure can signify an inability for the company to forecast the demanded for CD-ROMs to the amount
Star River Electronics is a CD-Rom manufacturing company based out of Singapore. Star River was founded as a joint venture between Starlight Electronics Ltd., and an Asian venture-capital firm called New Era Partners. Star River became favorably recognized as a supplier of high-quality CD-ROMs as the industry grew quickly during the mid to late 1990s.
New Chief Executive Officer Adeline Koh is tasked with navigating the CD-ROM manufacturing company through tough times as DVDs threaten to render the current business model of the company obsolete.
Problem: Use historical data and sales projections to forecast the conditions of the company for the next two years in order to find Star River’s debt requirement. Also provide Koh with a substantial financial report.
II. ALTERNATIVE SOLUTIONS 1. Review Historical performance and give feedback 2. Build simple forecast of performance for next two years 3. Find the discount rate of new packaging machine investment.
III. ANALYSIS OF ALTERNATIVES
First and foremost it is necessary to address that the alternative solutions in this case is a list of several analyses which are used in conjunction as opposed to one being chosen amongst the list. The list will give Adeline Koh a more complete look at the financial condition of Star River Electronics in order for her to be more equipped to make business decisions.
When analyzing the historical data of the company it was very easy to find that there are several operating and financing flaws that can be potentially dangerous for Star River. One of the more notable of these financing flaws is the drastic spikes in short term borrowings shown in the balance sheet. This is something that must be addressed as the company moves forward. On the operating end of the spectrum, the Inventories to Cost of Goods Sold ratio is a cause for concern. This figure can signify an inability for the company to forecast the demanded for CD-ROMs to the amount