ENG329-766 GROUP

CARBOSTAR:
TO SELL OR NOT
TO SELL?
CASE STUDY
TEAM 1
GANCHIMEG. B. /B21FA1008/
ARIUNZUL. B. /B21FA1032/
URANBILEG. B. /B21FA1023/
MUNKHTUUL. N /B20FA1014/
TUGS OCHIR. B. /B20FA1121/
 CONTENT
01 PURPOSE

02 INTRODUCTION OF CASE

03 Q1: CARBOSTAR’S FINANCIAL SITUATION BY END OF 2017

04
Q2: THE REASON OF PARTNERS CONSIDERING POSSIBILITY OF
SELLING OR OPENING SHARES TO THIRD PARTIES

05
Q3: LINK BETWEEN SOCIOEMOTIONAL WEALTH AND CAPITAL
STRUCTURE OF FAMILY BUSINESSES

06 Q4: MOST CONVINIENT OPTION FOR CARBOSTAR’S SHAREHOLDER

07 CONCLUSION
PURPOSE
The purpose of this case study is to work together as a team
to reinforce the financial knowledge gained in the course.
INTRODUCTION
OF CASE
 Maria’s husband,Carlos

Andres’ sister,Carlos’wife
Maria

Andres
Q1: WHAT IS CARBOSTAR’S
FINANCIAL SITUATION BY
THE END OF 2017?
 no margin management
current assets- 35.2%
CONCLUSION fixed assets- 64.8% buying fixed asset constantly
 CONCLUSION
liability- 44.6%
equity- 55.4%

current liability- 60.6%

fixed liability- 39.4%

increasing suppliers
decreasing fixed liability
constantly
ANALYSIS

>1, normal
>1, normal

positive

0.4 or less

2 or more

less than 1
ANALYSIS

>7.8, normal
30-40, bad
5-10, bad

10% or more

10% or more

10% or more
10% or more

15-20%, good

10 or more, bad
 REASON

The fluctuation of the

price of coal

10 year low - less than

49$ per ton
Q2: WHY ARE THE PARTNERS
CONSIDERING THE POSSIBILITY
OF SELLING OR OPENING
SHARES TO THIRD PARTIES?
 1. Drop in coal prices
2. Considering business withdrawal
3. Worried about business value
Profitability in the face of economic uncertainties
Changing market
4. Solution to relieve them of the responsibility
Q3: WHAT IS THE LINK BETWEEN
SOCIOEMOTIONAL WEALTH AND
THE CAPITAL STRUCTURE OF
FAMILY BUSINESSES?
The link between socioemotional wealth and capital
structure in family businesses can be understood as
follows:

1. Ownership and Control

2. Financing Decisions
3. Risk Tolerance
4. Long-Term Perspective
5. Harmony and Relationships
The ownership structure of a family business can either promote
or hinder the development of social-emotional wealth.
A family business’s capital structure can be used to

create a sense of security

ownership
emotional connection for family members involved in the
business
OR
create a sense of insecurity
inequality
power imbalance
Therefore, when making decisions about the capital structure of a
family business, it is important to consider how those decisions may
impact the SEW of the family.
Q4: WHAT IS THE MOST
CONVENIENT OPTION FOR
CARBOSTAR'S SHAREHOLDER?
WHY?
 3 Options
1. Sale of the entire company to
Carbones de Panama
2. Partnering with Carbones Julius,
45% of shares
3. Sell 60% of the shares to Maklan
CONCLUSION
In this case study, we reinforced the knowledge we gained in
class, organized our financial concepts, and increased our
teamwork skills.
THANK'S FOR
YOUR ATTENTION

ENG329-766 GROUP
TEAM 1