RSM322H1 Lecture Notes - Lecture 6: Cash Flow, Profit Margin, Butea Monosperma
Document Summary
Identification and analysis of alternatives to solve issues: Cash flow issue and immediate large cash flow outputs coming up such as the government tax with no immediate cash holdings, and liabilities to suppliers and workers as well. Profitability issue in recent years, may be largely associated with pricing issue since ew, Lf & ac are selling for a price lower than cost, as identified in exhibit 2 of case. Material cost makes up majority of cost so manipulating cost structure will do little in gaining profitability from sales, unless prices are changed. Production throughput issue with long backlog of orders, and still have more demand coming in from emt. Tesu relies highly on its suppliers, specifically for the ew diesel engines, and these suppliers need to be paid promptly. In addition, emt relies on tesu entirely since their products are unique and no one else provides them.
