(4 pages of text)
Case (Gen Exp)
In 2011, the sole owner and chief executive officer of Delisle Industries received Delisle’s 2010 financial statements from the company’s auditors and compared the results with previous years. While she was very happy with Delisle’s rapid growth, she had a number of serious concerns about its future. In particular, she was concerned about operating problems that had arisen as a result of rapid expansion as well as Delisle’s dependence on one vendor, Eagle Wholesale Club, to distribute Delisle’s product. She also had concerns about the establishment of a new production facility, wondered what could be done about the company’s poor cash management and overreliance on debt financing, and was seeking opportunities to finance future growth.
This case provides undergraduate and graduate students who are taking their first course in corporate finance with the opportunity to apply their skills in financial statement analysis. Students will be able not only to calculate and analyze an array of financial ratios, but also to learn to use this knowledge in plotting a strategic direction for a rapidly expanding manufacturing company that is facing some serious financial challenges.
Canada, Medium, 2011
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