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A recurring theme of this module has been the value of data to analysis and decision-making. You have utilized various types of data while conducting several analyses.
You will synthesize what you have learned about financial and performance management throughout the module.
We are excited about our future, and have aggressive plans for it. Among these plans is expansion into a new product line. We hope to be producing and distributing Anthony's Orchard apple juice within the next 3 to 5 years.
As your Final Project for this module, you will create a consultancy report that will provide guidance and insight to company management regarding this decision. Relying on the work done in previous Individual Assignments Submission, you will make a recommendation to the company regarding the plan to expand the product line and make a significant investment in an apple press required for that expansion.
To prepare for this Individual Assignment:
• Review the Final Project guidelines by clicking on Final Project on the Module Menu.
To complete this Individual Assignment:
• Develop the ‘Executive Summary' and Section 5, ‘Summary, Recommendations and Conclusion', which includes your formal recommendation to the company. Refine Sections 1-4 (based on the Individual Assignments Submission in Units 2-5).
• Compile the final consultancy report, and submit to your Faculty Member based on the Final Project Guidelines.
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Table of Contents
Executive Summary 3
Analysis of the Financial Statement 4
Analysis of Investment 14
Developing a Balance Score Card 18
Assessing Benchmarking Efforts 23
Recommendation and Conclusion 26
The company is a family run set up and is in the process of expanding their current business setup. The company is interested in setting up a new product line which is apple juice. In order to ensure that this is done, the company would be required to make substantial level of investment in the form of capital outlay in new equipments and new machineries. This would require the firm to invest additional capital for the purpose of ensuring that the overall capital structure of the company is maintained to the optimal level. Considering the overall situation and the manner of operations of the enterprise, we have analysed the financial and operational viability of the project.
The financial viability of the project would determine the overall financial performance and the value addition or value deletion for the firm, if the project is implemented. On the review of the overall financial performance of the enterprise it can be seen that the budgeted net income of the company is relatively higher than the actual net income of the company. Therefore the company would not be able to meet up to the expectations and the requirements of the enterprise, which has been planned for. Additionally the firm has an operating leverage of 1, financial leverage of 1.38 and also the Profit after tax of $371,147. The net expected net margin on the product is 3.37%. If we consider