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Fantastic Manufacturing

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Fantastic Manufacturing Strategy Paper In order to solve this case, we as financial analysts must prepare monthly forecasts for all financial statements and cash budgets in between 1981 and 1982. Once these have been calculated we will evaluate the financial health of the company, the need for an increase in financing and the most efficient strategy for ordering fan parts. In determining the financial health of the company we must take into account our forecasted information and through the use of various financial ratios determine its overall state. The most basic ratios that we must calculate are the liquidity ratios such as the current ratio and the quick ratio. After this we can calculate activity ratios such as the inventory turnover, accounts receivable turnover and collection period. Once we have determined those ratios, we move on to use leverage ratios such as debt ratio and time interest earned. The final sets of ratios that we use are those that determine the profitability of the company such as the gross profit margin and the profit margin. With this information we can calculate the return on total assets, the return on common equity and the earnings per share, which show us that Fantastic manufacturing, is in strong financial health. The next step in this case is determining the level of financing needed with this strategy to maintain strength in the company’s financial ratios. In order to do this, we must look at some of our previously determined ratios, more closely the equity to debt ratio and time interest earned. In the analysis of this data we must look closely to find worth while rates of both interest and return on the invest to insure that we don’t that our increase in debt doesn’t cause negative repercussions in both the long and short term. The last piece of this case is the

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