Critical in your analysis of this case is your understanding of the importance of cash to a business. This case focuses on the impact of rapid growth on cash and the financing gap between receivables and payables; your ability to delineate the components of a cash flow statement and prepare one using the indirect method to assess the stages of business development; lastly to demonstrate your ability to understand the linkages between the choices that businesses have to raise cash and the components of the cash flow statement you have prepared.
Your individual case analysis should include the following:
1. Based on information found in the case identify a minimum of three key factors that effect the success of Big City Courier. (To do this, you must consider how Big City Courier may be different (and/or the same) as their competitors; what does the business need in order to be successful?; what influences the companies financial position e.g. labour costs? Capital costs?
2. Describe the importance of cash to this business as it relates to growth and profitability. Can a growing and profitable company fail?
3. Using the indirect method and information from the case (there is enough there), prepare the statement of cash flows for Big City Courier for January, February and March 1997 and include as Appendix A.
4. Provide an analysis of the Cash Flow Statement – what were the key trends/highlights (even outliers), that the statement brought to the forefront in the operating, financing and investing activities of the company?
5. Select and calculate financial ratio’s (best fit) and use to further explain the situation at Big City Courier.
6. Identify a minimum of three (3) alternatives available to Taylor to improve the cash situation.
7. Provide and support your recommendation.
Ensure that you are using appropriate paragraphing in your work. Each paragraph should contain one key point, support etc… This will keep your writing concise, create a stronger framework for communicating your idea’s and helps to avoid duplication of material.
· Format: Adhere to a concise Business Style of Writing, factual and without opinion till the conclusion and recommendations. Best to leave out adjectives and adverbs whenever possible.
· Style and organization: Headings should be used to divide and organization the various sections of your paper.
· Length: A maximum of 10 pages. The Appendices are not included in your total page count.
· Font: The text should use Times New Roman, 12-point font and double line spacing.
· Title Page: Report Title, Student name, submission date, Instructor name.
· Executive Summary: A summary paragraph enabling readers to quickly grasp the main elements of the report without having to read the entire report, is optional.
· Table of Contents: Sections in the report and associated page numbers.
· Introduction: Overview of the report.
· Purpose: Summary as to why you are writing this report in relation to the situation presented. Include the problem statement and summarize what you are attempting to accomplish through your analysis, and what you are communicating via the report.
· Analysis of the Situation and Alternatives: Critical assessment of the situation presented, perspectives considered, factors impacting the assessment of the situation, and the possible alternatives considered in the analysis.
· Conclusions: Summary of the main implications arising from your analysis.
· Recommendations: What recommendations follow as a result of the problem determination and its analysis?
· Appendices: Those tables, charts, references, technical diagrams, computations, and other supporting documents that speak to the situation and its analysis. The Appendixes are lettered rather than numbered (Appendix A, Appendix B, etc.), and listed in the table of contents. Appendices are referred to at the appropriate point in the body of the report as “Appendix x”.
