Finance For Managers Assignment Example | Topics and Well Written Essays - 5000 words - 1

Finance For Managers - Assignment Example The management of any firm is faced with the task of dealing not only with the short term challenges faced by the business, but they must also have a long term vision for the company. Each company has its own internal advantages called Strengths that enable it to do better than some others in the industry. Likewise, each company also has its own internal deficiencies called Weaknesses that prevent it from making full use of its resources and abilities. Like it or not, all firms operating within a particular industry are similarly faced with uniform challenges from the external environment like the legal, social, economic and technological changes that may emerge as Opportunities for the industry if they give it an advantage, or Threats for an industry if they challenge its well being and continuity in the business environment. Jools Furniture Industries Ltd. likewise has its own set of strengths and weaknesses, and is also faced with opportunities and threats from the external enviro nment. It is clear that it must take some action to offset these internal and external challenges if it is to survive and prosper as a continuing business enterprise. This paper is divided into three parts. ... In Part III, we shall assess the proposal for an ?1.8 million loan to be taken by the Kitchens Division of the business, based on the current gearing and ROI criteria as traditionally maintained by the company, and also suggest two other alternatives in this regard. PART I Brief Analysis of the Present Position of the Furniture Business Looking at the industry scenario given in the case, it appears that the furniture industry in the UK is highly specialized and moving towards maturity. In this stage of the product life cycle, there are a whole lot of producers and manufacturers of a product and the competition is intense, hence every firm is looking at ways to enlarge its business and increase its capacity in different areas. Jools Furniture Industries Ltd. has also done the same over the years and has managed to create four different divisions, each dealing in a different type of product or delivering to a different market. We have the Kitchens Division, the Quality Division, the Be drooms Division and the Office Division. The marketplace can also be classified into the Domestic, the Office and the Contract market. The domestic market is geared towards serving the public, mainly through retail outlets and making products for household use. The domestic market constitutes 58 percent or the major chunk of the market demand. On the other hand, the office market deals mainly with products concerning desking, seating, tables, cabinets and other items for the office environment. The office market consists of 13 percent of the total market demand. The contract market caters to the needs of furniture for public areas such as hotels, schools, residential accommodation and airports. The contract market constitutes 29 percent or little less