Afc-Case Study

CASE ANALYSIS OF

ANGELITE FOODS CORPORATION

Submitted by:

Daisy Palma

Ma. Rogeelou Alcala

Mikee Grace Monteclaro

Jhona Jane Vecino

Submitted to:

Menchie Lacao

I. TIME FRAME

What is the best way for Angelite Foods Corporation to finance their additional capital requirement?

Amount Needed | Time Frame When the Decision Must be Made |

4,000,000 | By the early next month (February 1992) because it is due to their contractors. |

10,000,000 | Within 1 year because all the constructions are expected to be completed by 1992. |

20,000,000 | Within 1 year because it is expected that sales to end-users throughthe wholesalers and dealers will increase by about 30% annually |

| |

II. POINT OF VIEW

The company of Angelite Foods Corporation (AFC) is having a hard time dealing with their finances since their sale of sardines is not doing very well. Their income statement shows a net loss of 1,861,000. The company needs money to pay their debts and finance their future plans.

a.) If they engage into borrowing, they need to borrow a lot of money. In connection with this, they will have to pay for the corresponding interest rate required by the bank.

b.) If they were to issue additional shares of stock, their interest might be diluted, and they might lose control of the company.

III. STATEMENT OF THE PROBLEM

In this case, the executives of Angelite Foods Corporation (AFC) would like to resolve the company’s problem with regards to their finances. Specifically, they would like to answer the following:

* Where will Angelite Foods Corporation (AFC) get the cash to pay for their debts?

* Where will the company get the additional amount of money needed for the completion of the on-going plant construction and the launching of their new products?

* What is the best option for the company to solve their financial problem?

IV. SWOT ANALYSIS

STRENGTHS

* AFC is managed professionally....