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GUNA FIBRES Case Study Questions

Guna Fibres is a company that experiences varying financial requirements and borrowing needs throughout the year. The document discusses examining Guna's monthly financial forecast to determine the key drivers of these fluctuations and how much debt will be needed for the coming year. It also evaluates two proposals - from the transportation and operations managers - to relieve Guna's reliance on debt, looking at the costs and benefits of stabilizing production levels and transportation costs. Recommendations are requested for Kumar on how to improve Guna's financial situation.

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Anupam Dutt Shukla
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295 views2 pages

GUNA FIBRES Case Study Questions

Guna Fibres is a company that experiences varying financial requirements and borrowing needs throughout the year. The document discusses examining Guna's monthly financial forecast to determine the key drivers of these fluctuations and how much debt will be needed for the coming year. It also evaluates two proposals - from the transportation and operations managers - to relieve Guna's reliance on debt, looking at the costs and benefits of stabilizing production levels and transportation costs. Recommendations are requested for Kumar on how to improve Guna's financial situation.

Uploaded by

Anupam Dutt Shukla
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
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Case: GUNA FIBRES, LTD.

Study Questions:

1- Examine Malik's monthly financial forecast. Why do Guna's financial

requirements vary across the year? What are the key determinants of

Guna's borrowing needs?

2- On the basis of Malik's forecast how much debt will Guna need to

arrange for the coming year? Will Guna be able to zero out the line of credit

this year? If not, what is the cause of Guna's ongoing need for debt?

3- Use your intuition to assess the desirability of the two proposals.

Do you expect these proposals to relieve or worsen Guna's ability to clean up

its bank loan? What other alternatives should Malik consider?

4- Using the monthly forecast, model the proposal from the

transportation manager. How helpful is this proposal in relieving Guna's

reliance on debt financing? How would you assess the costs and benefits of

this proposal?

5- Using the monthly forecast, model the proposal from the operations

manager. How helpful is level production in relieving Guna's reliance on debt

financing? How would you assess the costs and benefits of this policy?

6- What are your recommendations for Kumar?

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