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1、StarRiverElectronicsLtd.PageiStarRiverElectronicsLtd.Team14ConstantineBrocoumCourtneyDeliaStephanieDohertyDavidDuboisRaduOpreaDecember19th2009StarRiverElectronicsLtd.Page1ObjectivesThisreptseekstoanswerthefollowingfivequ

2、estionsaboutStarRiverElectronicsLtd.:1.Assessthecurrentfinancialhealthrecentfinancialperfmanceofthecompany.WhatstrengthsweaknesseswouldyouhighlighttoAdelineKoh2.Fecastthefirm’sfinancialstatementsf20022003.Whatwillbetheex

3、ternalfinancingrequirementsofthefirminthoseyearsCanthefirmrepayitsloanwithinareasonableperiod3.Whatarethekeydriverassumptionsofthefirm’sfuturefinancialperfmanceWhatarethemanagerialimplicationsofthosekeydriversThatiswhata

4、spectsofthefirm’sactivitiesshouldKohfocusonespecially4.WhatisStarRiver’sweightedaveragecostofcapital(WACC)WhatmethodsdidyouusetoestimateWACCWhatarethekeyassumptionsthatespeciallyinfluenceWACC5.Whatarethefreecashflowsofth

5、epackagingmachineinvestmentShouldKohapprovetheinvestmentManagementSummaryFinancialHealthThefinancialhealthstrengthofacompanyismeasuredbyitsabilitytoserviceitsfinancialobligationssenitothecommonshareholders.Theseobligatio

6、nsincludedebtpaymentspreferredstockpaymentsthefundingofanypensionplansrentalleaseexpenses.BelowIhavehighlightedmanyoftheweaknessesofthecompany.Acommonmetricinvestsusetoevaluatetheabilityofacompanytoserviceitsdebtistheint

7、erestcoverageratiotimesinterestearned.StarRivercanonlycoveritsinterestbyalittlemethan2times.Thisisawrisomefinding.Thisratiohassteadilydecreasedsince1999.Thedebttoequityratiosareconsistentlyrisingyearoveryearatacompoundin

8、gatarateof18.1%.Therewasa64%jumpfrom1999to2000.Thisisawrisometrend.InventiestoCOGSratiosareincreasingdramatically.Operatingmargin%hasdecreasedsince1998bothofwhicharenotagoodsigns.ROAisameasureshowwellthefirmisusingitsass

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