CASE STUDY

Case Study: Global Hardwood Corporation



TABLE OF CONTENT

OVERVIEW OF THE COMPANY1

PART I) CURRENT FINANCIAL PRACTICES OF GHC1

Risk affecting GHC Performance3

Competition from Cheap Imports3

Cost and profit Risk3

Volatile Inputs3

Price fluctuation4

Threads affecting GHC Performance4

Demand for property4

Thread of lending standards and layoffs4

Fewer Participants5

Profit decline in wood panel5

Trade Disputes5

Foreign Currency Exposure6

Recommendations for Improvement6

PART II) ISSUES IN RECENT DEVELOPMENTS AND OPPORTUNITIES7

Distance Problem and Quality of the Service7

Taxation Holiday8

PART III) RECOMMEND A STRUCTURE FOR ASSESSING IN RISKS ASSOCIATED WITH ANY INWARD INVESTMENT WHICH MIGHT FOLLOW THE NEGOTIATIONS WITH THE HOST GOVERNMENTS9

International Finance and Governments9

International Finance and Risks10

PART VI) RESPONSIBILITIES CHIEF ACCOUNTANT AND THE GROUP TREASURER11

REFERENCES12

Global Hardwood Corporation

Overview of the Company

The Global Hardwood Corporation (GHC) is a United Kingdom based Multi-National Company which sources a wide range of decorative hardwoods from countries around the world. These hardwoods are then processed into products that are used in the construction and furniture industries.

GHC also owns 100% of the Real Furniture Company (RFC). RFC imports a range of hardwood and cane furniture, which is manufactured in overseas locations. This furniture is mainly for domestic use. Most of the customers for these products are located in the UK, Western Europe, and North America, Middle East and Australia and New Zealand region. All of the Company's products are seen as being of high quality and are priced accordingly.

Part i) Current Financial Practices of GHC

Being a treasurer of the Group Treasurer of the Global Hardwood Corporation, i am responsible to keep track on the financial performance of the company and analyzed the previous data in order to make improvement in the current structure of Global Hardwood Corporation. After the analysis of the financial trend of the Global Hardwood Corporation, it is clear that there revenue has been increased in last five years. Though, their revenue has been increase but their revenues by market segment have been decline. Like in 2003 their revenue was 76835 while in 2007 they jumped to 126467 which is 64.59% increased in last five years. Moreover, looking at the revenue by market, a consistent decline in UK from 2003 to 2004 which us due to the rise in property prices which resulted in decline in decorative hardwoods and other wood related things. Moreover, Western Europe is showing a positive trend as it was 28% in 2003 while it continues to increase to by 1% in 2004 and 2005. While due to their strong strategy in this region they able to increase the portion of revenue by 2% in 2006 and 2007. This has been a good region for Global Hardwood Corporation as they have consistently increased the revenue for this company.

Middle East only contributes 12% of the revenue in 2003 while the trend is constant as their demand in Middle East is not so much due to lack of advertisement. North America has been contributing between 17% to19% during these five years. Australia / NZ is 6% in 2007 which has been consistent from three years, before it was 5% that means they have managed to increase a bit of ...