Unit IX Introduction to Financial Management

Case Study 9.1: XYZ Corporation

 XYZ Corporation is a manufacturing company that produces electronic devices. The company has been in operation for several years and has recently faced financial challenges. The management team is looking for ways to improve the company's financial performance and ensure its long-term sustainability.

Background:

XYZ Corporation's financial statements reveal a decline in profitability, and the cash flow has been inconsistent. The management is concerned about the company's ability to meet its short-term obligations and wants to explore opportunities for growth.

 Q1.  Identify the various issues related to the profitability, cash flow, working capital and show its impact on the company?

Q2.  Suggest the strategies; company must adopt to improve the Financial Performance.

Case Study 9.2: XYZ Corporation's Financing Decisions

 Background:

XYZ Corporation is a mid-sized manufacturing company that produces electronic components for various industries. The company has been operating successfully for several years and is now considering expansion to meet increasing market demand. The management team is faced with crucial financing decisions to fund the expansion project.

Situation:

XYZ Corporation has identified an opportunity to expand its production capacity and improve efficiency by investing in new manufacturing equipment and technology. The expansion project is estimated to cost Rs. 10 crores, including the purchase of machinery, facility upgrades, and additional working capital requirements.

 1Q.    What are the various financing options XYZ Corporation have and what are the pros and cons of these financing options?

2Q.   What are the factors which company consider while making financing decisions?