Cases
A case on inventory management, Boying's Delicacies sold native food delicacies such as peanut brittle, ube, tamarind, coconut rice cake and many more. Having a small store, it manages very limited inventory. If it had more space for holding inventory, it could sell more. What's the basis of the owner's assumption? What would he do then? read more..
A branch office of a microfinance institution took advantage of the low rental rates offered by a building owner two years ago. It was occupying only one half or 50 square meters of the 100 square meters it was renting for P 12,000 a month. Converting the unused fifty square meters into a training room would cost the branch P 250,000, including furniture but excluding training equipment worth P 100,000. After considering its past training activities and costs incurred, it tries to come up with a decision of whether to rent or not considering relevant, irrelevant and sunk costs and other investment requirements. read more..
A young entrepreneur, Ben, ventured into a barber shop, Bruto's Cave, Inc. As a neophyte, he wants to start it right and would like to prepare the beginning balance sheet of his shop, the income statements for the combined first and second months of operations, the ending balance sheet at the end of the second month and a cash flow for the first two months of operations. read more..
During the first six months of 2007, Construction Tiles Company (CTC) generated profits after taxes of P343,639 according to its unaudited financial reports. This seemed like a turnaround given the dismal performance of CTC for the last two years due to a depressed construction market. Golden Bank had been repeatedly reminding CTC that its revolving credit line had been continuously “maxed out” at P5 million for the last four and a half years. Golden Bank just kept renewing the revolving credit line of CTC but was worried that CTC might need to restructure its finances to meet its future needs. In doing the financial forecasts, it was assumed that there will be an increase in profit margins... read more..
Fashion Corp. was thinking of expanding its garment operations. The main question is the viability of the expansion plan as it would require new sewing equipment amounting to millions. read more..
An exercise on working capital management, Garde Garments Corporation was experiencing declining sales of its ladies’ wear because the big department stores were shifting to RTW suppliers who were extending longer credit terms. The seeming problem was Garde’s stringent policy of accepting only cash on delivery sales. Would it allow sixty days credit just like what other RTW suppliers were giving to the big department stores? What would this imply? read more..
A volume profit relationship exercise, a chain of gasoline stations which sells premium gasoline only, is centrally owned. The stations are rented. The decision at hand is the desirability of opening another station given the revenue and expense relationships. What would be the monthly break-even point? What would happen if the price and variable costs vary? read more..
Brother Niko of the Philippine Jesuit Foundation was put in charge of the bookstore recently established by the Society of Jesus (Jesuits) in the Philippines. His job was to oversee the sale of religious publications to help augment funds needed by the Foundation for subsistence. His biggest problem was how to account for the various financial transactions of the bookstore. read more..
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