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Abstract

In July 2015, a new CEO joins this small manufacturer of CD-ROMs and DVDs to discover that the firm is in the midst of a financial crisis, induced by rapid growth. The CEO asks an analyst for help with five tasks: (1) review historical performance of the firm; (2) forecast financing requirements for the next two years; (3) exercise the forecasting model to identify "key driver" assumptions; (4) estimate Star River's weighted average cost of capital; and (5) analyze a proposed investment in a packaging machine. The analyst must offer insights and recommendations based on the work. The aim of the case is to exercise students' abilities in financial forecasting and analysis and in the analysis of capital projects. Generally, the case offers a good omnibus review of foundational tools and concepts.
Teaching note
-
Reference no. UVA-F-1361TN
Subject category: Finance, Accounting and Control
Authors: Bob Bruner (Darden School of Business, University of Virginia); Robert M Conroy (Darden School of Business, University of Virginia); Kenneth M Eades (Darden School of Business, University of Virginia)
Published by: Darden Business Publishing
Originally published in: 2001
Version: 31 August 2017
Revision date: 11-Sep-2017
Length: 16 pages
Data source: Published sources
View full details
Supplementary software
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Reference no. UVA-F-1361X
Subject category: Finance, Accounting and Control
Authors: Bob Bruner (Darden School of Business, University of Virginia); Robert M Conroy (Darden School of Business, University of Virginia); Kenneth M Eades (Darden School of Business, University of Virginia)
Published by: Darden Business Publishing
Originally published in: 2001
Revision date: 22-Dec-2016
Format: .xls
Topics: Capital investment; Forecasting; Ration analysis
View full details

About

Abstract

In July 2015, a new CEO joins this small manufacturer of CD-ROMs and DVDs to discover that the firm is in the midst of a financial crisis, induced by rapid growth. The CEO asks an analyst for help with five tasks: (1) review historical performance of the firm; (2) forecast financing requirements for the next two years; (3) exercise the forecasting model to identify "key driver" assumptions; (4) estimate Star River's weighted average cost of capital; and (5) analyze a proposed investment in a packaging machine. The analyst must offer insights and recommendations based on the work. The aim of the case is to exercise students' abilities in financial forecasting and analysis and in the analysis of capital projects. Generally, the case offers a good omnibus review of foundational tools and concepts.

Related

Teaching note
-
Reference no. UVA-F-1361TN
Subject category: Finance, Accounting and Control
Authors: Bob Bruner (Darden School of Business, University of Virginia); Robert M Conroy (Darden School of Business, University of Virginia); Kenneth M Eades (Darden School of Business, University of Virginia)
Published by: Darden Business Publishing
Originally published in: 2001
Version: 31 August 2017
Revision date: 11-Sep-2017
Length: 16 pages
Data source: Published sources
View full details
Supplementary software
-
Reference no. UVA-F-1361X
Subject category: Finance, Accounting and Control
Authors: Bob Bruner (Darden School of Business, University of Virginia); Robert M Conroy (Darden School of Business, University of Virginia); Kenneth M Eades (Darden School of Business, University of Virginia)
Published by: Darden Business Publishing
Originally published in: 2001
Revision date: 22-Dec-2016
Format: .xls
Topics: Capital investment; Forecasting; Ration analysis
View full details