FINANCIAL DECISIONS

Financial Decisions and Treasury Function

Financial Decisions and Treasury Function

Fox Products plc is a UK company which manufactures sports equipment for a wide range of sports played at both amateur and professional level. Currently all production is in the UK at a site near Liverpool.

Fox currently exports 75% of its production, about 2/3rds of its exports go to the US and the rest is sold to companies around the world though most are in South America.

FOX PLCS SWOT ANALYSIS: (SWOT Analysis Fox Plc, 2010)

Strengths Weaknesses

¨ Fox Plc. is a very competitive organization¨ Fox Plc is strong at Research and Development¨ Fox Plc has no factories and therefore the cash is not tied up in the buildings. ¨Fox Plc is a global brand.¨ Fox Plc does not have a diversified range of sports products.¨ the retail sector is very price sensitive.

Opportunities Threats

¨Product Development offers Fox Plc Many opportunities.¨ Opportunity to develop sportswear, etc. ¨Business can also be developed Internationally.¨ Fox Plc is exposed to international nature of trade.¨ Sports shoes and garments market is very competitive.¨ Retail sector is becoming price competitive.

Long- Term Objectives:

Therefore, the long -term objectives for Fox Plc. are:

1.The main aim of Fox Plc is to be a leader in all the three segments Remote, Operating and Industry Environment.

2.Another long- term objective for Fox Plc is to create high brand awareness and customer loyalty and satisfaction. This can be achieved by providing quality products to the customers.

3.To help athletes achieve their greater goals by providing quality footwear.

4.Furthermore, its main aim is to be a truly multinational company5.Last but not the least, to satisfy all the stakeholders of Fox Plc by maximizing their wealth.

Strategic Analysis and Choice:

1.Fox Plc utilizes innovation to produce top quality footwear and apparel: Innovation is one of the strategies linked to the long-term objectives of the company. Innovative business organizations like Fox Plc, place great emphasis on being able to take advantage of new opportunities-identifying changes in the business environment and, after evaluating market research information, allocating resources to capitalize on these opportunities.

Financial Analysis of Fox Product Plc

Cash Flow Analysis

Cash management techniques can vary from business to business and industry to industry. Good working capital management requires a myriad of techniques for short term solutions that promote long term growth. By settling receivables quickly, negotiating terms with suppliers to stretch payment and reducing capital liabilities, companies can increase cash flow and promote long term growth.

Fox Sports distributes and supplies protective gear and equipment for football, baseball, basketball and volleyball. Their primary customer is Mayo Stores and their primary suppliers are Murray Leather Works and Gartner Products. Fox needs to improve its cash flow. The main causes for Fox cash flow problems are growing account receivable balances and stretching payments to suppliers. By stretching the payments to suppliers Fox is running the risk of damaging relationships and losing potential savings by paying on time. Currently Fox does not have enough cash on hand each month to pay for capital expenditures causing them to borrow ...