Presentation:BROWN MARINE

SUPPLY COMPANY

Presentors:Abid Khan (Specialization H.R)

Muiz Hassan (Specialization Marketing)

Yasir Wahab (Specialization Finance)

Kamil Afridi(Specialization Marketing)Today We are here to present you the case study on “Brown Marine Supply Company”.

TABLE OF CONTENTS The Overview Point of View Problem Statement Objectives Situation Analysis The Alternatives Recommandations

CASE STUDY: Brown Marine Supply Company

The Overview of the Case Study…

2.Point of View

Let’s start with the first content!

Point of View:We are trying to present the

case from the financial consultant’s point of view.

3.Problem Statement

What sort of problem the company is facing!

Problem Statement■ The company is facing the cash

shortage issue.■ The company’s cash balance had

fallen below $2,000.■ And have to pay for outstanding

accountpayables to its suppliers.

4.Objectives

What are the set of goals that are to be achieved!

Objectives■ To organize cash in such a way

that “Brown Marine Supply Company” has enough cash in order to make prompt payments against outstanding payables.

■ To ensure that “Brown Marine Supply Company” has proper mechanism for the speed up collection of outstanding receivables.

5.Situation Analysis

What are the important points of the case, that are useful for the result.

Situation Analysis

■ Company’s cash balance has fallen below $2000.■ Company has to pay for outstanding payables by

the end of the week.■ While making consistently profits, company was

getting shorter & shorter of cash.■ Mr. Brown, the owner has decided to extend the

borrowing limits, which was already being fully used.

■ Despite growing sales & continued profitable operations, the company has always seemed to be short of cash on number of events.

■ Company was also failing to take advantage of prompt payment discounts (i.e. 2%, 10 days, net 30 days).

Exhibits & Ratio AnalysisFinancial Statements of the case

BROWN MARINE SUPPLY COMPANYLiquidity Ratios

Ratios May 31 June 30 July 31

Current Ratio 2.51 2.49 2.69

Quick Ratio 1.97 1.94 2.06

Working Capital Ratio

150,048 163,605 175,430

BROWN MARINE SUPPLY COMPANYProfitability Ratios

Ratios May 31 June 30 July 31

Gross Profit Margin

24.40% 23.48% 22.95%

Net Profit Margin

11.23% 11.85% 11.00%

Return on Assets/Return

on Equity3.64/5.62 4.33/6.76 3.70/5.88

BROWN MARINE SUPPLY COMPANYEfficiency Ratios

Ratios May 31 June 30 July 31

Receivable Turnover/Avg

Collection Period

0.71/512 Days

0.65/557 Days

0.52/705 Days

Inventory Turn Over

1.48 1.52 4.74

Days in Inventory

246 Days 240 Days 77 Days

6.The Alternatives & Recommendations

What are the set of solutions?

The Alternatives

■ Revise customers credit policies to speed up collection.

■ Make it easy for your customers to pay you by offering all standard payment options – credit card, cheque or direct deposit into your bank account.

■ Recruit branch managers and sales people to help in the collection effort. 

■ Discuss your terms with your buyer at the time of sale.

■ Get extended credits from suppliers.

■ Arrange short term borrowings.

THANKYOU…

Any Questions??