Star River Electronics Ltd.

Darden Business Publishing Cases

ISSN: 2474-7890

Publication date: 20 January 2017

Abstract

In July 2001, a new CEO joins this small manufacturer of CD-ROMs and DVDs to discover that the firm is in the midst of a financial crisis, induced by rapid growth. The CEO asks an analyst for help with five tasks: (1) review historical performance of the firm; (2) forecast financing requirements for the next two years; (3) exercise the forecasting model to identify “key driver” assumptions; (4) estimate Star River's weighted average cost of capital; and (5) analyze a proposed investment in a packaging machine. The analyst must offer insights and recommendations based on the work. The aim of the case is to exercise students’ abilities in financial forecasting and analysis and in the analysis of capital projects. Generally, the case offers a good omnibus review of foundational tools and concepts.

Keywords

Citation

Bruner, R., Conroy, R., Eades, K. and Carr, S. (2017), "Star River Electronics Ltd.", Darden Business Publishing Cases. https://doi.org/10.1108/case.darden.2016.000286

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Publisher

:

University of Virginia Darden School Foundation

Copyright © 2001 by the University of Virginia Darden School Foundation, Charlottesville, VA. All rights reserved.

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