Vilobí Case, Business Analysis, Winter 2011

Vilobí Case, Business Analysis, Winter 2011, EADA

1. What is the real economic situation of Vilobí S.A.?
a. Questions:
i. What are the opportunities and threats for Vilobi?
ii. What is thereal financial situation of Vilobi? What factors have led to
the company’s current situation?
iii. What are the financial consequences of applying Mr. Vilobi’s growth
proposal going forward? And thatof his son?
iv. What recommendations would you make to Mr. Vilobi?
b. Key Facts and Figures (i)
i. Threats
1. Forthcoming expiry of bank overdraft (316.354 ptas) in STL. May/Not renew overdraftfacility knowing the credit policy of the bank has changed due to economic situation (no specifics).
2. Franco-Irlandesa may be canceled and currently makes 50% of current turnover.
3. Drop intourism (coastal area).
4. A/R issues due to personal favors; Sausalito, Nacho.
ii. Opportunities
1. Excellent reputation for delivery service, unbeatable customer service which can help catalyzeexpansion.
2. Seeking new sales areas (reduce AR by 35 days from last year).
c. Analysis of Current Financial Statements (ii)
i. Reference excel.
ii. Gross Margin has been decreasing by 29% from 19x1 to19x4.
iii. Increase in costs
1. Income Statement
a. Financial expenses by 177%
b. COGS by 46,61%
2. Balance Sheet
a. AR by 46% to 67% in CS statement for overall increase of 191%.
b. AP from17,25% to 40,93% in CS for overall increase of 391%.
c. All fixed assets are decreasing in the CS statement.
d. CL increased from 50,59% to 75,69% overall increase of 209%.
i. No use of LTD.
3.Financial Ratios
a. Resource Management – Poorly managed resources because they are utilizing their own cash to finance and leverage their clients. Cash cycle: pay suppliers, get resources, produce andsell and I get paid (difference between receivables turnover and payable turnover – Pmt period less Collection period, currently 11 days cash negative).
i. Sales to Assets overall decreased to...