Assignment # 1 Corporate Finance Fall 2011

Balance Sheet for 2008 Assets cash 18,187 accounts recievable 12,887 tools and equipment 27,119 Total 58,193 Balance Sheet for 2009 Assets cash 27,478 accounts recievable 16,717 tools and equipment 37,216 Total 81,411 Income statement 2008 revenues sales costs of goods depreciation interest expense Selling and administrative Total Income statement 2009 revenues sales costs of goods depreciation interest expense Selling and administrative Total Operating cash flow 2008 revenues Sales depreciation taxes Operating cash flow Operating cash flow 2009 revenues Sales depreciation taxes Liabilities and Owner's equity Liabilities Notes payable 14,651 accounts payable 32,141 Owner's equity 0 Total 46,792

Liabilities and Owner's equity Liabilities Notes payable 15,997 accounts payable 36,404 Owner's equity 15,600 Total 68,001

debit 126.038 35.581 7.735 24.787 194.141

debit 159.143 40.217 8.866 32.352 240.578 operating cash flow= EBIT+Depreciation - taxes (20% for Sunset Boards Inc.) debit

49.4518 233,388,2 operating cash flow= EBIT+Depreciation - taxes (20% for Sunset Boards Inc.) debit

60.2784

Operating cash flow Cash flow from assets 2009 operating cash flow capital spending Additions to NWC Cash flow from assets Cash flow to creditors for 2009 Cash flow to stockholders for 2009

281,330,6 Operating cash flow - capital spending - additions to NWC debit 8.866 15600 256,864,6 8.866 140,665,3

The financial development of organizations is very important for their steady progress. In this respe possible to refer to the experience of Sunset Boards Inc. In fact, the financial position of the Sunset is stable but the company can enhance its position, if the company can complete its expansion strat point, the cash flow is an effective tool with the help of which the company and investors can foreca financial development of the company and its business development. In this respect, it is possible to dwell upon the Sunset Boards Inc. cash flow for 2009. The analysis of operating cash flow, the cash flow from assets, the cash flow to creditors and the cash flow to inves the fact that the company holds a stable position in the market but, under the impact of its expansio company may face certain reduction in its expected revenues, although the cash flow will grow stea point, it is worth mentioning the fact that operating cash flow is likely to grow but the company will pay the growing debt and the cash flow to creditors and investors will increase proportionally to the revenues of the organization. Therefore, the company will increase its spending to direct cash flow t creditors and investors. On the other hand, the company can improve its performance consistently run perspective. In such a way, Tads expansion plan is quite controversial. On the one hand, the implementation of t can enhance the position of the company in the market and open the new market, where the comp start progressing, taking into consideration the popularity of surfing in Haiti. At the same time, the c and its investors should be aware of existing risks and threats to the business development and mar expansion. First, the company has relatively small experience of operations in the industry. Second, competition in the new market is high and Sunset Boards Inc. should come prepared to confront the competition. Therefore, the company should offer some original, unique products or offer customer attractive prices. In actuality, the company can gain a strategic advantage only due to the pricing po

competition. Therefore, the company should offer some original, unique products or offer customer attractive prices. In actuality, the company can gain a strategic advantage only due to the pricing po the change of pricing policy means the reduction of price of the companys products in the new mar such a way, the company will have to sacrifice its revenues for the sake of taking its share in the new This decision may raise the dissatisfaction of stockholders because this will lead to the reduction of revenues of the company. It is also important to understand that the possible drop in revenues is quite natural and the compa a risk to enter the new market successful. However, the company needs the support of professional because Tad alone cannot cope with successful completing of his expansion plan. In this regard, inve should assess actual risks and expected return on investments to understand the extent to which th investment in Tads expansion plan is risky and what benefits it can bring to the company and its inv such a way, investors should weigh carefully existing financial resources and potential of the compa a decision on the investment.

credit 247.259

247.259

credit 301.392

301.392

ow= EBIT+Depreciation - taxes (20% for Sunset Boards Inc.) credit 247.259 35.581

ow= EBIT+Depreciation - taxes (20% for Sunset Boards Inc.) credit 301.392 40.217

ow - capital spending - additions to NWC credit 281,330,6

is very important for their steady progress. In this respect, it is et Boards Inc. In fact, the financial position of the Sunset Boards Inc. position, if the company can complete its expansion strategy. At this h the help of which the company and investors can forecast the its business development. he Sunset Boards Inc. cash flow for 2009. The analysis of the ets, the cash flow to creditors and the cash flow to investors reveal osition in the market but, under the impact of its expansion plan, the expected revenues, although the cash flow will grow steadily. At this perating cash flow is likely to grow but the company will have to creditors and investors will increase proportionally to the growth of e company will increase its spending to direct cash flow to its the company can improve its performance consistently in a long-

controversial. On the one hand, the implementation of the plan n the market and open the new market, where the company can the popularity of surfing in Haiti. At the same time, the company g risks and threats to the business development and market y small experience of operations in the industry. Second, the Sunset Boards Inc. should come prepared to confront the strong ld offer some original, unique products or offer customers can gain a strategic advantage only due to the pricing policies but

ld offer some original, unique products or offer customers can gain a strategic advantage only due to the pricing policies but uction of price of the companys products in the new market. In ice its revenues for the sake of taking its share in the new market. of stockholders because this will lead to the reduction of the

possible drop in revenues is quite natural and the company can take However, the company needs the support of professional financiers ssful completing of his expansion plan. In this regard, investors urn on investments to understand the extent to which the and what benefits it can bring to the company and its investors. In y existing financial resources and potential of the company to take