Prepare an analysis of terracycles

Assignment Help Managerial Accounting
Reference no: EM13838

This individual assignment is based on the TerraCycle Inc.

The case includes financial and managerial accounting topics that have been studied in the course with the objective being to see how they relate to one another when examined in one scenario.

The assignment is to be submitted by the due date in the Course Schedule, as one excel workbook. As this is an individual assignment, your workbook may not be shared with other learners. Discussions about the issues and concepts involved in the case may take place, but calculations must be completed independently and final responses based on individual evaluation of the case. We encourage you to use the Individual Assignment Q&A forum on the course site for questions, so that the responses are available to everyone. Please note the formatting requirements found at the end of these instructions.

Required:

Assuming the role of Betsy Cotton, CFO of TerraCycle Inc., complete the following:

1. Prepare an analysis of TerraCycle's current situation:

(a) outlining their goals and objectives. Also consider what specific decisions need to be made.

(b) identifying their strengths and weaknesses. How do these capabilities affect the decision to be made?

(c) using the ratios provided in Exhibit B below and in Exhibit 5 of the case, prepare an industry analysis and a competitor analysis.

2. Analyse the company's Statement of Cash Flows (Exhibit A below) for the year ended December 31, 2005, discussing the cash situation, current versus long-term financing and investing activities.

3. Qualitatively and quantitatively assess the new product formula offerings. Your quantitative assessment should include an incremental analysis for both the best-case and worst-case scenarios including the following:

(a) Incremental cash inflows and outflows from operations for each alternative

(b) Incremental investments required for each alternative

Determine the return on investment and the payback period in years for each alternative based on your calculations.

Based on your analysis, discuss whether TerraCycle should proceed with both new products or not proceed at all.

4. Prepare a projected income statement and balance sheet for TerraCycle for the year ended December 31, 2006. Assume implementation at the 110,000 product level for both the African Violet and Orchid Plant Food Formulas. If financing is required,
assume the company will make a new issue of preferred shares.

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Reference no: EM13838

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