pwc case competition 2016

Greenlight Mind the GAAP

Angela Bruzzi, Brendan Kirsch, Mark Hammerschmidt, Natalia Hoyos, Shiv Moola

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Agenda Recommendation

Social Media

Short Term Plan

Long Term Plan

Financials

Risks and Mitigation

Why PwC?

3Recommendation Social Media Short Term Long Term Financials Risks Risk and

Mitigation

Our Recommendation

● Greenlight does not acquire RubberUp Inc.● Greenlight sets up an “in house” operation to maintain the

integrity of the motto “Built at Greenlight for Greenlight,” that recycles rubber into components that can be sold and used.

● Investment into Research and Development.● Social Media campaign to combat poor public image with regard

to environmental sustainability.

Why PwC?

44Recommendation Social Media Short Term Long Term Financials Risks Risk and

Mitigation

Social Media Campaign

Why PwC?

Social Media Campaign-Tire Tracker

Recommendation Social Media Short Term Long Term Financials Risks Risk and Mitigation

Why PwC?

6Recommendation Social Media Short Term Long Term Financials Risks Risk and

Mitigation

Short Term

● Collect used tires from auto shops and tire graveyards to ensure no more future waste and also to ensure future profit.

● Tires can be acquired for an average of $1.25 and sold for rubber mulch and scrap steel for $2.40. Greenlight can start production on playground equipment.

● While this is done our R&D team will be investigating our capabilities to use rubber for playground, turf, and track production.

Why PwC?

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Rubber Expansion

Recommendation Social Media Short Term Long Term Financials Risks Risk and Mitigation

● Used tires will be sold for its components up until we build capabilities to create:○ Playgrounds ○ Turf fields○ Tracks

● This new expansion will dig into Greenlights cash assets but some of the stress felt there will be relieved by the immediate selling of the stock we are gathering for profit

Why PwC?

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Long Term

Recommendation Social Media Short Term Long Term Financials Risks Risk and Mitigation

● Greenlight’s recycling division turning a profit● Market Cap equal to that of RubberUp Inc.

Lower Cost of Production→Larger scale→Higher Profit Margins

● Operate on B2B and B2C level● Market leader● Wider range of products● Convert recycling division into a Non-profit wing● Acquire RubberUp Inc.?

Why PwC?

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Financials

Recommendation Social Media Short Term Long Term Financials Risks Risk and Mitigation

● Our team of experts have analyzed the impact of this into financial statements and conclude that the effects of our plan would be damaging in the short term.

● However, this situation could be the best thing that has ever happened to Greenlight. With our plan we estimate Greenlight could start to make profit in the recycling business.

● R&D expense restructuring ● Structured Settlement

Why PwC?

Projections of Greenlight with the added costs and revenues of building in house capabilities equal to that of RubberUp over the course of 3 years (2015-2018)

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Risk and Mitigation

Recommendation Social Media Short Term Long Term Financials Risks Risk and Mitigation

● Acknowledge the environmental issue.● Take appropriate steps minimize fines and restitution by

incorporating our suggested social media plan, to reiterate Greenlight’s sustainable business practices to the public.

● Reassure investors ● Assure the public that this problem can not happen again.● BP Oil?

Why PwC?

Why PwC?We are here to help!● We support the integration of sustainability with business ● Identify your issues and goals ● Prioritise these issues from both a sustainability and commercial point

of view ● Map the short and long-term ambitions for your sustainability vision

Recommendation Social Media Short Term Long Term Financials Risks Risk and Mitigation

Why PwC?

Why not Rubber Up?

●Unstable

●Further investigation needed

●High purchase value-66.7%*

*Net income/total assets

The Data●Max amount spent on “in house” operation- $2.25m-1m

inventory=$1.25m

●Over three years=$583,000 per year, about 60% increase in R&D spending from current spending in the first year

●Restructure R&D spending- cut previous R&D expense by about 105,000 and use towards new operation. New per year R&D spending=$478,000.