brown marine supply company
DESCRIPTION
Case Study on Brown Marine Supply CompanyTRANSCRIPT
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Presentation:BROWN MARINE
SUPPLY COMPANY
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Presentors:Abid Khan (Specialization H.R)
Muiz Hassan (Specialization Marketing)
Yasir Wahab (Specialization Finance)
Kamil Afridi(Specialization Marketing)Today We are here to present you the case study on “Brown Marine Supply Company”.
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TABLE OF CONTENTS The Overview Point of View Problem Statement Objectives Situation Analysis The Alternatives Recommandations
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CASE STUDY: Brown Marine Supply Company
The Overview of the Case Study…
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2.Point of View
Let’s start with the first content!
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Point of View:We are trying to present the
case from the financial consultant’s point of view.
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3.Problem Statement
What sort of problem the company is facing!
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Problem Statement■ The company is facing the cash
shortage issue.■ The company’s cash balance had
fallen below $2,000.■ And have to pay for outstanding
accountpayables to its suppliers.
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4.Objectives
What are the set of goals that are to be achieved!
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Objectives■ To organize cash in such a way
that “Brown Marine Supply Company” has enough cash in order to make prompt payments against outstanding payables.
■ To ensure that “Brown Marine Supply Company” has proper mechanism for the speed up collection of outstanding receivables.
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5.Situation Analysis
What are the important points of the case, that are useful for the result.
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Situation Analysis
■ Company’s cash balance has fallen below $2000.■ Company has to pay for outstanding payables by
the end of the week.■ While making consistently profits, company was
getting shorter & shorter of cash.■ Mr. Brown, the owner has decided to extend the
borrowing limits, which was already being fully used.
■ Despite growing sales & continued profitable operations, the company has always seemed to be short of cash on number of events.
■ Company was also failing to take advantage of prompt payment discounts (i.e. 2%, 10 days, net 30 days).
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Exhibits & Ratio AnalysisFinancial Statements of the case
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BROWN MARINE SUPPLY COMPANYLiquidity Ratios
Ratios May 31 June 30 July 31
Current Ratio 2.51 2.49 2.69
Quick Ratio 1.97 1.94 2.06
Working Capital Ratio
150,048 163,605 175,430
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BROWN MARINE SUPPLY COMPANYProfitability Ratios
Ratios May 31 June 30 July 31
Gross Profit Margin
24.40% 23.48% 22.95%
Net Profit Margin
11.23% 11.85% 11.00%
Return on Assets/Return
on Equity3.64/5.62 4.33/6.76 3.70/5.88
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BROWN MARINE SUPPLY COMPANYEfficiency Ratios
Ratios May 31 June 30 July 31
Receivable Turnover/Avg
Collection Period
0.71/512 Days
0.65/557 Days
0.52/705 Days
Inventory Turn Over
1.48 1.52 4.74
Days in Inventory
246 Days 240 Days 77 Days
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6.The Alternatives & Recommendations
What are the set of solutions?
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The Alternatives
■ Revise customers credit policies to speed up collection.
■ Make it easy for your customers to pay you by offering all standard payment options – credit card, cheque or direct deposit into your bank account.
■ Recruit branch managers and sales people to help in the collection effort.
■ Discuss your terms with your buyer at the time of sale.
■ Get extended credits from suppliers.
■ Arrange short term borrowings.
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THANKYOU…
Any Questions??