Fantastic Manufacturing, Inc. Paper
Autor: cnuwho • June 15, 2015 • Case Study • 388 Words (2 Pages) • 2,122 Views
Cindy Luu
FIN 423
Haddad
June 8, 2015
Fantastic Manufacturing, Inc.
The company, Fantastic Manufacturing Inc, was facing rapid growth and needed financial statements and cash budget forecasts to evaluate their financial health and strategy.
First, the forecasted financial statements should be monthly forecasts of the financial statements and monthly cash budgets for 1981 and 1982.
Since, the company’s sales were seasonal, the revenues vary throughout the year with the most revenues coming from April through September. Therefore, it would make the most logical sense to do monthly forecasts. In addition, it is an opportunity to analysis any revenue trends and opportunities to optimize expansions for the company’s future, such as the products in demand from suppliers and consumers in each season and month to predict future sales.
Next, the monthly cash budget has a few concerns that it needs to consider. The concerns include the variation in sales throughout the year with April to September being the highest in revenues, as well as the increase in selling, general and administrative costs (by rent, advertising, bad debts and interest costs), commissions, sales from small accounts compared to mass-merchandisers and home-center stores, account receivables, debts to sales ratio, and letters of credit. The other factors that might affect the company’s financial health are the oversea sourcing, the order’s 60 days lead time, the company’s inventory, and the company’s $40 million backlog.
Lastly, another factor to consider is the company’s competition and how the company compares to its competitors. The company has already introduced its line of Cotillion, but how does that compare to its major premium-line competition by Hunter and Casablanca by Emerson Electric? In addition, Emerson Electric does little to promote its product. Therefore, is there a possibility that Fantastic Manufacturing could decrease it’s promotion and advertisement to lower the company’s selling, general and administrative costs account?
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