The case describes the techniques used in the financial statement forecasting, including the operating and financing cycles. The three major concepts of financial management: Leverage, debt structure, and role of profit are also discussed in the case. It demonstrates the difference that exists between the two risks: financial and business.
This case also examines the challenges that a company faces in the growth of its finance, and the issues in capitalization of fixed assets. It determines the behavior of cost and its impact on forecasting the financial statements, and the differential cost concept.
It discusses various principles that are associated with alternative choice decisions and examines the techniques to evaluate the alternative choice decisions regarding the discontinuation of a product line. At the end of the case, it demonstrates the structure of a contribution income statement and the concept of contribution.
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