Financial Management

Essay by malliUniversity, Master'sA+, February 2007

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Introduction

Key financial challenges

Lawrence Sports is a $20 million company that manufactures and distributes sports equipment. Lawrence obtains materials to produce sports equipment from Gartner products and Murray leather goods and ships the finished product to it main customer Mayo stores.

The company's main issue is to develop a short-term payment and collection policy for its customers in order to keep the high interest loan borrowing to a minimum. The company must find a balance between the company's working capital needs and maintaining good business relations with its customers.

First South Pacific Bank has more than $400 billion in assets and plans to enter the banking market in the Republic of Kitanesia which has a fast growing economy and one of the world's largest middle class by acquiring several local banks. First South Pacific must develop an acquisition strategy and determine a competitive bid price of its target bank(s) based on market-strength and financial strength.

The sole director of Kramer Associates, a new investment consulting company, must determine, manage and create an investment portfolio for three clients each with different investment strategy, investment time horizon and tolerance for risk. To find the right investment portfolio for each client the director must assess risk tolerance, determine asset allocation and rebalance according to market conditions in order to preserve capital and obtain the highest return within an 18 month time span.

Part B

Merger Acquisitions (Part C)

The $7.4 billion merger of Pixar with Disney was sound and mutually beneficial solution for both companies.

The Walt Disney Company is one of the largest media and entertainment corporations in the world with revenues of $31.9 billion in 2005 (Wikipedia, 2006).

Pixar Animation Studios is an award-winning computer generated imagery (CGI) animation which produced six successful animated movies that grossed more than $3.2...