Presentation:BROWN MARINE
SUPPLY COMPANY
Presentors:Abid Khan (Specialization H.R)
Muiz Hassan (Specialization Marketing)
Yasir Wahab (Specialization Finance)
Kamil Afridi(Specialization Marketing)Today We are here to present you the case study on “Brown Marine Supply Company”.
TABLE OF CONTENTS The Overview Point of View Problem Statement Objectives Situation Analysis The Alternatives Recommandations
CASE STUDY: Brown Marine Supply Company
The Overview of the Case Study…
2.Point of View
Let’s start with the first content!
Point of View:We are trying to present the
case from the financial consultant’s point of view.
3.Problem Statement
What sort of problem the company is facing!
Problem Statement■ The company is facing the cash
shortage issue.■ The company’s cash balance had
fallen below $2,000.■ And have to pay for outstanding
accountpayables to its suppliers.
4.Objectives
What are the set of goals that are to be achieved!
Objectives■ To organize cash in such a way
that “Brown Marine Supply Company” has enough cash in order to make prompt payments against outstanding payables.
■ To ensure that “Brown Marine Supply Company” has proper mechanism for the speed up collection of outstanding receivables.
5.Situation Analysis
What are the important points of the case, that are useful for the result.
Situation Analysis
■ Company’s cash balance has fallen below $2000.■ Company has to pay for outstanding payables by
the end of the week.■ While making consistently profits, company was
getting shorter & shorter of cash.■ Mr. Brown, the owner has decided to extend the
borrowing limits, which was already being fully used.
■ Despite growing sales & continued profitable operations, the company has always seemed to be short of cash on number of events.
■ Company was also failing to take advantage of prompt payment discounts (i.e. 2%, 10 days, net 30 days).
Exhibits & Ratio AnalysisFinancial Statements of the case
BROWN MARINE SUPPLY COMPANYLiquidity Ratios
Ratios May 31 June 30 July 31
Current Ratio 2.51 2.49 2.69
Quick Ratio 1.97 1.94 2.06
Working Capital Ratio
150,048 163,605 175,430
BROWN MARINE SUPPLY COMPANYProfitability Ratios
Ratios May 31 June 30 July 31
Gross Profit Margin
24.40% 23.48% 22.95%
Net Profit Margin
11.23% 11.85% 11.00%
Return on Assets/Return
on Equity3.64/5.62 4.33/6.76 3.70/5.88
BROWN MARINE SUPPLY COMPANYEfficiency Ratios
Ratios May 31 June 30 July 31
Receivable Turnover/Avg
Collection Period
0.71/512 Days
0.65/557 Days
0.52/705 Days
Inventory Turn Over
1.48 1.52 4.74
Days in Inventory
246 Days 240 Days 77 Days
6.The Alternatives & Recommendations
What are the set of solutions?
The Alternatives
■ Revise customers credit policies to speed up collection.
■ Make it easy for your customers to pay you by offering all standard payment options – credit card, cheque or direct deposit into your bank account.
■ Recruit branch managers and sales people to help in the collection effort.
■ Discuss your terms with your buyer at the time of sale.
■ Get extended credits from suppliers.
■ Arrange short term borrowings.
THANKYOU…
Any Questions??