Cash management:
The major objective is to yield a positive cash flow. This means that there will be need for discerning the different cash needs of the company while also identifying the different sources that can best suit the needs. For the long-term goal, the goal is to achieve an optimal cash balance whereby there is quality between long-term carrying costs and long-term stockout costs. Further, there is need to achieve liquid assets availability for the planning of cash outflows and unexpected events. The strategy to be followed is as follows:
Cash flow is to be forecasted by coming up with a cash project for every quarter. This is essential to permit analysis of firm’s projected position of cash for every quarter. Further, it is also useful to incur carrying costs and not stockout costs. Stockout cost comprises of the liquidation associated with marketable securities considering a discount rate of 3% with the issuance of a penalty loan at 8% for quarterly interest. Carrying costs include costs that are incurred in storage of the goods. The charges at the warehouse are examples of carrying costs. Determining the optimal inventory quantity in cash management requires the use of Economic Order Quality (EOQ) so that the demand is met. On the other hand, it reduces the costs incurred in managing cash. The economic order quality is a sure way of managing cash because it aids in the solving of issues that relate to costs and revenues in a company. It also gives the position of the company as far as cash management is concerned. When a company shows excess cash at the end of business, cash management will show the company the areas which they money can be spent. Contrary to stockout costs, they mainly deal with the assets of the company and not leases and liquidation terms. Carrying costs are directly incorporated as costs incurred in processing of a product.
In the process of having control over the company,
Cash balances
This made the increase of the unit price from the fourth quarter till the seventh quarter so as to increase the margin. The company experienced a strike at the start of the eighth quarter that put them in a dilemma whether to ignore or assume the possibility or choose the settlement. The company would experience some financial problems within the next quarter considering the settlement value. There was reduction in the unit price during the eighth quarter to $112 and then to $104 in the ninth and tenth quarter. The aim of this increase was to increases the product demand and rise in the total profits. There was increase in the unit price to $107.44 in the eleventh quarter and then to $112.10 in the twelfth quarter. These increase allowed for the extra profit in earnings.
Product strategy
For the company to increase its control we have to produce maximum amount according to the production schedule. This will help to maintain the expected demand for every quarter. The main aim for this quarter was to have the highest production level that the machines and the plant capacity can contain. To increase the production level we have to make the greatest investment by acquiring the machine and plant. This will in turn also increase the financial requirements. The main objective was to produce the highest amount of production that we could produce. This will help to have a clear vision and objectives hence will avoid having any problems with loans in the times to come. The main objective throughout the quarters was to maintain sufficient production and this will in turn help in maintaining the maximum and optimum amount of inventory. The main challenge that affected this goal was the fire which occurred since it destroyed a bigger percentage of the property.
It cleared all the ending inventory completely. Due to this occurrence the remaining option was to increase the production and to make the maximum production using all the possible ways. The fire led to the ending of very low ending inventory and we had to produce much higher production in quarter 7 to increase the ending inventory. Our main aim during this challenging period was to try as much as possible to maintain the level of inventory without incurring much cost in warehousing costs. This would help us in settling all the acquired debts. We also wanted to reduce the expenses of carrying costs and stock costs. We wanted also to maintain the level of units; this will help to meet the sales demand in the coming quarters. Throughout we will try to have enough plant and machine capacity.
Capital structure
The company makes use of capital structure, whereby the maturity debt are obtained and so are the structure of the debt. A mission guides the company: To work towards simplifying complexity in the logistic sector through working with experts and experienced proprietary technology. The company has managed to achieve a close working accord with clients while also fostering active partnership, and sound financial footing. The company offers both local and international services to our esteemed clients. The following are our products: Freight shipping services such as Full Truckload, Less than Truckload, Freight Billing Auditing, and DeepBlue expertise solutions. The contents such as names, images, and trademarks are licensed to Blue G for personal use and the use of clients under stipulations set forth herein. The available substances are administered in the absence of warranty, statutory or express. The company is accountable for lost gains, indirect, incidental or consequential.
