A new CEO at Star River Electronics, a small manufacturer of CD-ROMs and DVDs, discovers the company is in a financial crisis due to rapid growth. The CEO asks an analyst to help with five tasks: 1) review historical performance, 2) forecast financing needs for two years, 3) identify key drivers in a forecasting model, 4) estimate the company's weighted average cost of capital, and 5) analyze a proposed investment in a new packaging machine. The analyst must provide insights and recommendations based on completing these tasks.
A new CEO at Star River Electronics, a small manufacturer of CD-ROMs and DVDs, discovers the company is in a financial crisis due to rapid growth. The CEO asks an analyst to help with five tasks: 1) review historical performance, 2) forecast financing needs for two years, 3) identify key drivers in a forecasting model, 4) estimate the company's weighted average cost of capital, and 5) analyze a proposed investment in a new packaging machine. The analyst must provide insights and recommendations based on completing these tasks.
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A new CEO at Star River Electronics, a small manufacturer of CD-ROMs and DVDs, discovers the company is in a financial crisis due to rapid growth. The CEO asks an analyst to help with five tasks: 1) review historical performance, 2) forecast financing needs for two years, 3) identify key drivers in a forecasting model, 4) estimate the company's weighted average cost of capital, and 5) analyze a proposed investment in a new packaging machine. The analyst must provide insights and recommendations based on completing these tasks.
Copyright:
Attribution Non-Commercial (BY-NC)
Available Formats
Download as DOCX, PDF, TXT or read online from Scribd
by Robert F. Bruner, Robert M. Conroy, Kenneth Eades, Sean Carr Source: Darden School of Business 10 pages. Publication date: Mar 22, 2002. Prod. #: UV0014-HCB-ENG In July 2001, 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. This is a Darden case study.
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