A Case Study on Miniscribe Corporation
A Case Study on MiniScribe Corporation
for
BA 219 - Corporate Financial Reporting
Submitted to:
Dr. Helen S. Valderrama
by
ARELLANO, Alyssa Loren
ASADON, Rovin Vincent
BLANCO, Melissa
CHU, Goodwealth
DE GUZMAN, Cla
PRELLIGERA, Chriss Jan
July 9, 2013
Master in Business Administration
University of the Philippines
Diliman, Quezon City
EXECUTIVE SUMMARY In October 1988, Paula Perry, a research analyst for the brokerage firm Alexander and Ferris, was tasked to analyse the financial condition and performance of MiniScribe Corporation. The latter was a manufacturer of disk-drives for personal computers, and was rumoured to be experiencing cash flow and inventory problems. The objective of Paula’s analysis is to help her manager decide if MiniScribe Corporation should remain in Alexander and Ferris’ ‘Buy’ recommendation list or not. The case was therefore analysed from Paula Perry’s viewpoint as a research analyst who must make a recommendation.
The group made a background check of MiniScribe and the disk-drive industry, and took note of all the important events and developments which have led to the company’s current financial condition. Next, the group prepared the Income Statement, Balance Sheet and Statement of Cash Flows. The group then proceeded to calculate financial ratios and cash flow availability to extract more quantitative information. From the assessment of the MiniScribe’s liquidity, solvency, profitability, stability and efficiency ratios, the group has come up with a strong basis for a recommendation.
Based on the available information, the group recommends that MiniScribe be removed from Alexander and Ferris’ ‘Buy’ recommendation list because of the firm’s liquidity, stability and profitability issues. These issues and other aggravating factors led the group to seriously question MiniScribe’s capacity to continue as a going concern.
TABLE OF CONTENTS
I. CASE BACKGROUND
II. PROBLEM DEFINITION
III.
for
BA 219 - Corporate Financial Reporting
Submitted to:
Dr. Helen S. Valderrama
by
ARELLANO, Alyssa Loren
ASADON, Rovin Vincent
BLANCO, Melissa
CHU, Goodwealth
DE GUZMAN, Cla
PRELLIGERA, Chriss Jan
July 9, 2013
Master in Business Administration
University of the Philippines
Diliman, Quezon City
EXECUTIVE SUMMARY In October 1988, Paula Perry, a research analyst for the brokerage firm Alexander and Ferris, was tasked to analyse the financial condition and performance of MiniScribe Corporation. The latter was a manufacturer of disk-drives for personal computers, and was rumoured to be experiencing cash flow and inventory problems. The objective of Paula’s analysis is to help her manager decide if MiniScribe Corporation should remain in Alexander and Ferris’ ‘Buy’ recommendation list or not. The case was therefore analysed from Paula Perry’s viewpoint as a research analyst who must make a recommendation.
The group made a background check of MiniScribe and the disk-drive industry, and took note of all the important events and developments which have led to the company’s current financial condition. Next, the group prepared the Income Statement, Balance Sheet and Statement of Cash Flows. The group then proceeded to calculate financial ratios and cash flow availability to extract more quantitative information. From the assessment of the MiniScribe’s liquidity, solvency, profitability, stability and efficiency ratios, the group has come up with a strong basis for a recommendation.
Based on the available information, the group recommends that MiniScribe be removed from Alexander and Ferris’ ‘Buy’ recommendation list because of the firm’s liquidity, stability and profitability issues. These issues and other aggravating factors led the group to seriously question MiniScribe’s capacity to continue as a going concern.
TABLE OF CONTENTS
I. CASE BACKGROUND
II. PROBLEM DEFINITION
III.