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Fantastic Strategy.edited

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San Diego State University
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Strategy Paper: Fantastic Manufacturing Inc
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Strategy Paper: Fantastic Manufacturing Inc
“Fantastic Manufacturing Inc” was focused on estimating the future growth performance
for a new invention that the corporation felt would pull in customers from all sectors. This
invention was the “ceiling fan.” This being the case, for accurate forecasting of the prospective
growth of the new product (ceiling fans), the company should assess its financial health as
depicted in “Exhibit One,” which is the income statement. This paper entails a strategy to assist
“Fantastic Manufacturing Inc” in forecasting the expected growth brought about by
manufacturing and marketing the ceiling fans.
Based on the corporations financial statements, Fantastic Inc.’s revenue underwent a
considerable rise within a year from 1979-1980. The sales in 1979 were $3.1million while in
1980 the sales were at $9.9million. Despite the revenues increasing, the net income was
relatively low based on increased costs of assembling the product. The revenues in 1981 were at
around $15.8million with a predicted sales of over seventy million by 1982. Thus, forecasting
was a pivotal aspect to determine whether the venture would continue to be profitable. Hence,
the key areas that need to be addressed include the company’s financial health, “need for
increased financing,” and “level fan-parts order strategy.
On the companys financial health, it is significant to assess this aspect as it will offer
insights into Fantastic Inc's operations, the flow of cash, and general performance. Thus, the
strategy to do so entails first assessing the company’s liquidity. This entails the cash levels of the
company as well as the assets that could be quickly converted to cash to handle short-term
company debts. The liquidity can be calculated through the quick ratio, whose formula is current
assets divided by the current liabilities. Another critical financial health area to be scrutinized is
the company’s solvency. This refers to an organization’s ability to handle debt obligations in the

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1 Strategy Paper: Fantastic Manufacturing Inc Name Institution Course Date 2 Strategy Paper: Fantastic Manufacturing Inc “Fantastic Manufacturing Inc” was focused on estimating the future growth performance for a new invention that the corporation felt would pull in customers from all sectors. This invention was the “ceiling fan.” This being the case, for accurate forecasting of the prospective growth of the new product (ceiling fans), the company should assess its financial health as depicted in “Exhibit One,” which is the income statement. This paper entails a strategy to assist “Fantastic Manufacturing Inc” in forecasting the expected growth brought about by manufacturing and marketing the ceiling fans. Based on the corporation’s financial statements, Fantastic Inc.’s revenue underwent a considerable rise within a year from 1979-1980. The sales in 1979 were $3. ...
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