Guna Fibres, Ltd.
Publication date: 20 January 2017
Abstract
The chief executive of a small yarn-production company in India must resolve an unexpected cash shortage. The task for the student is to evaluate the causes of this shortage (using a completed “base-case” forecast given in the case) and assess the usefulness of various possible remedies suggested by managers.
The company is unable to liquidate a seasonal working-capital loan for the requisite 30 days each year, a difficulty arising from two classic causes: secular growth of the company and declining profitability. Possible remedies include reducing inventory through more efficient transportation and warehousing, reducing credit terms to customers, switching from seasonal to level production, improving profitability, decreasing dividends, and reducing sales growth.
Keywords
Citation
Schill, M.J., Bruner, R.F. and Pham, T.T. (2017), "Guna Fibres, Ltd.", . https://doi.org/10.1108/case.darden.2016.000145
Publisher
:University of Virginia Darden School Foundation
Copyright © 2013 by the University of Virginia Darden School Foundation, Charlottesville, VA. All rights reserved.