Current financial situation

Analyzing Juan company’s financial statement and financial analysis, John Rivera still hasn’t made a
profit for the month ended since he initially contributed P 400,000 to the firm but ended up with a total
loss of P 1,150. Aside from that, looking at the company’s operating cycle and cash conversion cycle, the
company's period between the sale of the cash payment and the time it takes for the business to collect its
accounts receivables after paying its raw materials shows a significant period. The operating cycle shows
that it takes half of the year, or exactly 176 days, for the company to collect the sale of the finished
product, whereas the cash conversion cycle shows that it takes less than half year, or exactly 139 days, for
the company to pay for its raw materials from the time they are acquired. It is claimed that having a
shorter cycle for the operating cycle and cash conversion cycle is preferable. As a result, we can conclude
that Juan Company is performing poorly in July.

Financial Goals
How can the business improve its financial situation?
It is critical to understand the organization's financial well-being to create proper goals and make
excellent financial decisions for the company. Financial planning is one of the finest things you can do for
your financial situation since it allows you to examine the influence of a certain strategy on your financial
position, cash flows, reported earnings, and need for external funding.

Which areas in financial management need to be improved?

Managing and reducing unnecessary costs. Reducing business costs is one approach to improve the
financial situation, giving the company greater space to save money in the future. Ensuring efficient
resource use can help to avoid unnecessary costs. If we want to save money, we may decide to cut back
on non-essential spending. We should have a solid grasp of how to create a budget that matches the
organization's plans and financial goals.

Alternatives to achieving financial goals

Alternatives-Budgeting is required to achieve the company's financial goal/s. Capital budgeting is
concerned with capital expenditures, which include inflows and outflows of funds to support investment
projects. Advantages of Capital Budgeting: Capital budgeting assists a firm in understanding the
numerous risks involved in an investment opportunity and how these risks influence the company's
profits. All capital budgeting techniques/methods aim to improve shareholder wealth and offer the
organization a competitive advantage. Disadvantages of Capital Budgeting: Capital budgeting decisions
are long-term and mostly irrevocable. A poor capital budgeting choice might have a long-term impact on
the company's viability.
Financing-Stocks are traded on the primary market, and the proceeds from a business's stock issuance are
primarily used to promote the firm's expansion while also commonly repaying the initial company
investors. Any extra sales occur in the secondary market, which consists of stock exchanges, after all of
the stock has been issued. When someone sells a share of stock, the proceeds go to the seller rather than
the company that issued the shares.

Conclusion
Specific
The financial purpose is to establish capital budgeting for the company to fund investment initiatives.
Assists a company in comprehending the multiple risks associated with an investment opportunity and
how these risks affect the company's earnings. All capital budgeting techniques/methods strive to increase
shareholder wealth and provide a competitive edge to the firm.

Measurable
Capital budgeting allows financial decision-makers to make educated decisions for projects that are
expected to last a year or more and need a big capital expenditure. Capital budgeting assists them in
developing a cost-benefit analysis for the project, estimating a schedule for its return on investment, and
determining if the project's prospective value is worth the capital expenditure.

Achievable
Calculate the company's current financial status using a budgeting calculator, then select the appropriate
budgeting technique and implement it using a budgeting tool. Adequate capital planning will surely help
the company improve.

Realistic
If the company is currently under budget and fighting to produce monthly income from outstanding
obligations, the objective may be unattainable. Perhaps the corporation could concentrate on capital
budgeting to reduce expenditures and manage the organization for growth.

Time-based
By implementing capital budgeting and other forms of planning for the company, it will be able to fully
enhance its financial statements, analysis, operational cycle, and cash conversion cycle and reach its
financial goal/s in the following months.