CASE STUDY

Case Study

Case Study

Case-01: Outline the Financial, Environmental, Social & Broader Economic Issues That The Company Needs To Take Into Account

At Parks Spice Company Finance is concerned broadly with the generation, allocation, and management of monetary resources for any purpose. It includes personal finance, whereby individuals save, invest, and borrow money to conduct their lives. With regard to financial needs of the Parks Spice Company I will say that budgeting should be done with utmost care in Parks Spice Company. It is the decision making process regarding assets, resources, principal and investments, and how they are to be utilitized within Parks Spice Company. Capital investment decisions comprise the long-term choices about which projects receive investment, whether to finance that investment with equity or debt, and when or whether to pay dividends to shareholders. Parks Spice Company must take this into account.

Careful budgeting is essential in marketing decisions in Parks Spice Company. The company considers that decisions on investment, which take time to mature, have to be based on the returns which that investment will make. Unless the project is for social reasons only, if the investment is unprofitable in the long run, it is unwise to invest in it now. Often, it would be good to know what the present value of the future investment is, or how long it will take to mature (give returns). It could be much more profitable putting the planned investment money in the bank in order to earn interest, or to invest it (Brealey, Myers & Marcus, 2004). Typical Capital budget decisions include the decision to build or invest. A smaller business manager may need to evaluate whether to spend more on advertising or increase the sales force, although it is difficult to measure the sales to advertising ratio.

Brealey, Myers & Marcus (2004) mention that the expenses that the project requires must be controlled at Parks Spice Company, using a cost benefit, approach such as the payback, rate of return, net present value, internal rate of return and the profitability index, there are other techniques of course; but the technique to be used will depend on a range of things, including the knowledge and sophistication of the management of the organization, the availability of computers and the size and complexity of the project under review at Parks Spice Company.

With regard to social and the broader economic needs of Parks Spice Company I will say that social responsibility also needs to be measured. This includes providing for a Parks Spice Company's employees safety and maintaining safety standards at all times, putting in place necessary training and safety programs. The social responsibility Parks Spice Company carries also takes into account the environmental responsibility of proper disposal of waste, pollution controls and protection of the surrounding ecology and the financial burden involved.

New Product or Service Development at Parks Spice Company requires research and development, which can be a very expensive sector of Parks Spice Company. Product development is the complete process of bringing a new product to market, ...