Financial Analysis for Robert Casualwear Ltd.

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University Of Surrey

Business Financial Assignment

Ivan Ho Siu Hin

URN: 1139371

1st March, 2004

Philips Management Consultants

Client: Robert Casualwear Ltd

Financial Analysis for Robert Casualwear Ltd

Prepared by Ivan Ho

Robert Casualwear Ltd’s major problems

  • Bank wants Robert Casualwear Ltd to reduce it’s overdraft by a half
  • Only have £8,000 in cash
  • Too much cash going out and too little coming in
  • Major shareholders not willing to put in more money into the business

After studying the information that I have been given, I have founded out that there are many possible ways that can solve the financial problems that you are having.

There are 5 key areas that I have looked into. These are:

  • Stock
  • Debtors
  • Creditors
  • Cash
  • Assets

Option1: Stocks and Debtors

Stock

The amount of stocks have increased by £3,402,000 in a year time. This is more than a double compare to last year. Since Robert Casualwear Ltd is a clothing company, and clothing is all about fashion, huge amount of stock in your warehouse is not a good idea (when clothes gone out of fashion, they usually worth literally nothing)

Suggestions: Since your company is short in cash, my advice for you is to get rid of those stocks as soon as possible. (at least back down to last year’s amount) You can sell you stocks at a cheaper price (i.e. sale) or start up some kind of promotions. (e.g. buy 1 get 1 free) By doing this, I estimate your company can cash back about £2,300,000 in cash.

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Debtors

The total debtors of your company have increased by more then a double. People owe your company too much money. You will have to bring this figure down immediately. If your debtors have any financial problems, you will not have a chance to get it back.

Suggestions: I suggest Robert Casualwear Ltd to put more pressure on your debtors and try to get as much back as possible. (2/3 will be Ideal) The best way is to ask for those who owe you the most first. This will give £2,764,000 cash inflow to Robert Casualwear Ltd ...

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