Managing Growth
Managing Growth
Susan Vasquez
April 27, 2014
FIN 571
Troy Mahone
Sunflower Nutraceuticals (SNC) operates on a very tight cash flow. The past has not been had resources to stay above the water. SNC has been looking at some new projects and for the past nine years the projects and their impact on SNC’s financial impact has been tracked. In the first phase of these new projects two were applied to SNC.
Acquiring a New Customer Atlantic Wellness was acquired as a new customer. Sales were increased significantly which in return also increased accounts receivable and inventory balances. This was a good decisions because as sales increase so does income. Additional accounts receivable and inventory can cause more overhead but can always be controlled.
Leveraging Supplier Discounts With a new customer top-line growth was achieved. With the added expenses of more accounts receivable and inventory needs the cash flow for these three years was drained. It was however, offset by an added increase in EBIT due to favorable contracts. For the next three years two more projects were acquired. After the rapid increase in top-line growth and the increases it showed, SNC decided to pursue a new project that put SNC’s products into Mega-Mart Inc. retail. This once again increased top-line growth which drives sales higher, it consistently strained the EBIT.
Developing a Private Label Since retail has immersed for SNC a private label seemed logical to stand out for consumers. Starting the branding process for SNC. The sale of the private label drove EBIT up again balancing out the next three years. The final three years and the final projects were critical. Since one project after another has off-set each other there is still a need to increase SNC’s cash flow and sales.
High-Risk Customer Acquiring a high risk customer was a decision made with careful consideration. Since EBIT and net income were stable, sales was the next thing that
Susan Vasquez
April 27, 2014
FIN 571
Troy Mahone
Sunflower Nutraceuticals (SNC) operates on a very tight cash flow. The past has not been had resources to stay above the water. SNC has been looking at some new projects and for the past nine years the projects and their impact on SNC’s financial impact has been tracked. In the first phase of these new projects two were applied to SNC.
Acquiring a New Customer Atlantic Wellness was acquired as a new customer. Sales were increased significantly which in return also increased accounts receivable and inventory balances. This was a good decisions because as sales increase so does income. Additional accounts receivable and inventory can cause more overhead but can always be controlled.
Leveraging Supplier Discounts With a new customer top-line growth was achieved. With the added expenses of more accounts receivable and inventory needs the cash flow for these three years was drained. It was however, offset by an added increase in EBIT due to favorable contracts. For the next three years two more projects were acquired. After the rapid increase in top-line growth and the increases it showed, SNC decided to pursue a new project that put SNC’s products into Mega-Mart Inc. retail. This once again increased top-line growth which drives sales higher, it consistently strained the EBIT.
Developing a Private Label Since retail has immersed for SNC a private label seemed logical to stand out for consumers. Starting the branding process for SNC. The sale of the private label drove EBIT up again balancing out the next three years. The final three years and the final projects were critical. Since one project after another has off-set each other there is still a need to increase SNC’s cash flow and sales.
High-Risk Customer Acquiring a high risk customer was a decision made with careful consideration. Since EBIT and net income were stable, sales was the next thing that