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1, 2 - Case Study Example
Finance & Accounting
Pages 5 (1255 words)
Case Study 1, Case Study 2 Table of Contents Case 1 3 Objectives to Consider 3 Actions to Take 3 Options 4 Decision 5 Case 2 5 Objectives to Consider 5 Actions to Take 6 Options 6 Decision 7 Works Cited 8 Case 1 Objectives to Consider Sweetco Inc. was a subsidiary of 5A1, but the parent company decided to sell off its subsidiaries as the company was not fitting into their strategic framework…
were never taken care of. Now it has been heard that Sweetco Inc is being sold off by its holding company to its senior management and a leading firm. Apart from this, another fact was also revealed that Sweetco received money from its holding company for its operational functions on the basis of loans. This is the reason why the CFO has asked for an extension in the credit terms to 60 days. The objective is now to analyze the financial credibility of Sweetco at present and make a future projection so that we can decide whether to maintain the business relationship or not. Actions to Take The best option in such a case is to ascertain credit scores of the company Sweetco Inc. Assigning credit scores means defining certain factors for making decisions and allotting weight age on each factor. For example, 30 percent weight age for the payment history of the customer, 30 percent weight age to the amount of money outstanding, 15 percent weight on the length of the credit history, 10 percent weight on the newly generated credits, and 10 percent on the different types of loans being offered to the customer, i.e. Sweetco Inc. For this purpose the marketing contacts would be utilized; the investigation of credit shall be done through reliable sources; the customer of Sweetco Inc. ...