Finance Minicase 1 Sunset Boards
Finance Minicase 1 Sunset Boards
Finance Minicase 1 Sunset Boards
Finance
2014
196,619 $
28,372
55,506
12,067
38,668
20,143
244,881
385,724
20,104
22,855
123,607
38,706
-
2/10/16
2015
248,263
42,865
62,738
13,831
50,469
34,091
298,350
470,172
26,078
24,955
140,000
52,057
15,000
PJ Tessier
Finance
2/10/16
$
$
$
$
23,202
34,803
385,724
196,619
38,668
55,506
94,931
12,067
82,864
24,859
58,005
PJ Tessier
Finance
2/10/16
$
$
$
$
26,564
39,846
470,172
248,263
50,469
62,738
108,702
13,831
94,871
28,461
66,410
PJ Tessier
Finance
2/10/16
$
$
$
PJ Tessier
Finance
2/10/16
$
$
$
PJ Tessier
Finance
94,931
55,506
24,859
125,578
2/10/16
PJ Tessier
Finance
108,702
62,738
28,461
142,979
2/10/16
PJ Tessier
Finance
142,979
116,207
17,770
9,002
2/10/16
PJ Tessier
Finance
$
$
13,831
16,393
(2,562)
2/10/16
PJ Tessier
Finance
$
$
26,564
15,000
11,564
2/10/16
PJ Tessier
Finance
2/10/16
Question 1: How would you describe Sunset Boards cash flows for 2015?
The operating cash flow is postive which shows that Sunset Boards is making enough money to c
stockholders. Net capital spending is high in regard to the operating cash flow which is caused by
from assets is not negative which shows the company is still borrowing, but not at as high of a ra
remaining money is sufficient enough to distribute to creditors and stockholders.
Question 2: In light of your discussion of the previous question, what do you think about Tads exp
Tad's expansion plans seem sound looking at the 2015 cash flows but may need to be slowed for
positive which means the company can afford to borrow more money if they have enough eviden
potential sales are not yet estimated, it would be smart for Tad to find out whether he will be able
money borrowed from banks. The safest move Tad could make to expand, would be to first test th
opening another store. While the addition to retained earnings is almost $40,000, the immediate
company's assets forcing them to be unable to repay loans under unexpected circumstances. Tad
is to move in small steps and gradually earn money while also gaining a good reputation for a go
PJ Tessier
Finance
g enough money to cover its outflows such as cash flows to creditors and
ow which is caused by the company's cash spent on fixed assets. Cash flow
not at as high of a rate as it would be if it were growing quickly. The
ders.
need to be slowed for a safer approach. The cash flow from assets is still
y have enough evidence to show that they will sell more boards. If the
whether he will be able to give back to his investors while still paying off
would be to first test the profitability of selling to other sellers before
0,000, the immediate costs of opening another store might deplete the
ed circumstances. Tad's idea is smart but the safest move for the company
od reputation for a good product.
2/10/16