Three important financial management concepts including leverage, debt structure, and the role of profit are being discussed in this case. It examines the techniques for financial statement forecasting with the operating and financing cycles and also differentiate the business risk and financial risk.
The techniques for undertaking alternative choice decisions concerning discontinuing a product line are also examined and a number of principles are provided related to alternative choice decisions. This case explores the issues related to capitalizing of the fixed assets and issues that affect the financing growth.
It determines the behavior of multiple costs and their impact on forecasting financial statements and the differential cost concept. In the end, it provides the structure of a contribution income statement and discusses its concept of contribution.
