Burton Sensors, Inc. Case Solution And Analysis, HBR Case Study Solution & Analysis of Harvard Case Studies

Burton Sensors, Inc. Case Study Analysis

Growth Strategy

It has been assumed that to fulfil the projected sales and income, the company would need to invest more capital- $100,000. Thus, it is recommended that the company should pursue its growthstrategy because, it is very necessary for the company to achieve this target to effectively compete with its competitors by satisfying the customer’s increased demand. The analysis represent that with the help of this increasedfinancial capital, the company would be able to achieve its neartargets(See appendix 3).

Conclusion

Burton Sensors Inc. was found in Fort Wayne, Indiana, with the viewpoint of designing and manufacturing temperature sensor.Amy Marshal, the Burton Sensors’ president, is worried about the company’s current situation. Although, the net earnings have increased, but the net earnings are not representing the projected results. In addition to this, the outstanding bank loan is representing 96% from its total value of inventory and account receivable cost. On the basis of the analysis, it is recommended that Burton Sensor Inc. should purchase the machine. Thermowell machine purchase will yield NPV, which would be positive-$564,164, with an expected IRR of 21%. Although, the EPS would decrease, but the issuance of stocks would fulfil the targeted book value of equity with respect to the liabilities and interest-bearing ratio. Thus, it is recommended that Burton should issue stocks to the potential investor............................

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