A Case Study of Besi Waja

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1. EXECUTIVE SUMMARY

Besi Waja Processing Company was founded in year 1998 by Hashim Musa. The company is recycled material in the manufacture of paper products, as well as metal and glass products. The main point in this case study is that Besi Waja need loan from Bank Barat for the purpose of increasing the company’s stock of scrap metal. Besi Waja considered a loan of RM200, 000 to be adequate for the company. Due to this, the solution for this case study is that Bank Barat should give the loan to Besi Waja in order for company to expand their business. To know detail about the conditions and performance of the company, we calculate the financial of cash flow, ratios and balance sheet.

2. PROBLEM STATEMENT

Besi Waja had some problem in enhance their business. The problem that have been seen in year 1990’s when the company had survived the ‘shake-out’, as it had become known throughout the economy where at that time, the recession was happen and it give impact to thousands of companies. Besides that, Besi Waja also had some a problem to increase the company’s stock of scrap metal in year 2010. Recently, a large portion of railroad track and rolling steel was being dismantled at certain points in the country and unusually large supply of steel had become available. So, this company considered to borrow a loan of RM200, 000 to cater the problem.

3. CASE BACKGROUND

Besi Waja Processing Company is a company that recycled of metal, glass and paper that were started on year 1998. The overall profit of company was increase year by year and it become as strength to the company. The processes steel was shipped to foundries across Malaysia for use in a variety of applications. In fact, the company was such an important supplier of metal to specific foundries, and it had become necessary to keep a certain level of inventory on hand in order for company to ensure that the demands could be met without delay. The scales forecast for Besi Waja for year 2011 was RM15million. Besides, Besi Waja Processing had a long-standby reputation as a well-run company. In addition, bank’s loan officer, Shukor Halim informal grapevine indicated that Hashim handled his credits well.

In January 2011, Hashim Musa, the owner and manager of Besi Waja Processing Company, approached a bank loan from Bank Barat in order to enhance their business activities. The purpose of approached a bank loan is to increasing the company’s stock of scrap metal. In order to properly manage the situation, Hashim considered a loan of RM200,000 to be adequate for his short-term debts.

4.0SOLUTIONS TO PROBLEMS

4.1Question 1

Develop the cash flow statement for 2010 which will illustrate the company’s condition. Analyze the company’s cash flow position and its ability to expand.

|Besi Waja Processing Company | |Cash Flow Statement for the Year 2010 | | | | | | | |  |  |RM |  |RM | |Net Profit After Tax |  |336,000 |  |  | |Depreciation |  |50,000 |  |  | |Accounts Receivables |  |(209,742) |  |  | |Inventory...
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