A Five-Year strategic financial plan for Pacific Airconditioning and General Services Inc.

Executive Summary: Pacific Airconditioning and General Services Inc., established on February 20, 1997, is a firm involved in the contracting and subcontracting industry of mechanical works, specializing in heating, ventilation, air conditioning (HVAC), and fire protection systems. Also, the entity performs piping services, metal and elecirical works. Its mission is to provide the highest quality service to clients cost-effectively by using the company's greatest asset, its workforce. This strategic financial planning aims to review and analyze Pacific Airconditioning and General Services Inc.'s overall financial condition and performance. It will provide an assessment and analysis of Pacific Airconditioning and General Services Inc.'s profitability, liquidity, solvency, and other financial performances from 2016 to 2020, based on the entity's audited financial statements. The proponents also used an industry average to compare its competitiveness in the market. The proponents analyzed both the internal and external factors to arrive at a problem assessed in the paper. Subsequently, the proponents observed one main problem and three specific problems for the company. The company's main concern revolves around profit- maximization brought about by the entity's high amount of account receivables resulting from poor quality of customers. The proponents perceive that the entity's practice of settling with deals with low contract value with a high cost of services to acquire projects contributes to the entity closing contracts with delinquent customers, leading to slow collection and disrupted business operations. The proponents also perceive that the control and decision-making are limited to the president alone is a problem that the entity should address. The proponents' goal is to provide an alternative course of action that the entity can utilize to solve its profit maximization problem. The proponents proposed implementing a fair collection policy while simultaneously filtering the biddings they will enter into. The proposed policy will discount clients who will pay earlier than the supposed payment date. It will also issue a penalty for late payments. It shall encourage clients to pay, speeding up accounts receivables collection. Alongside the fair collection policy is the filtering of contract deals. It will urge the company to review the credit history of potential clients before entering into a contract, thus, filtering out the poor quality of clients. These two will increase the amount of money available to use in their operations, decrease the entity's reliance on borrowings, and reduce the chances of late payments and bad debts. Through the recommendation, the financial performance of PAGS Inc in terms of their profitability will improve. Furthermore, the receivables turnover of the entity will increase 6 to 12 times, while their revenue will accumulate an improvement of 20%. Lastly, the company's profit percentage will also increase. Such results show that the proponents' recommendations will effectively solve the company's profitability problems, thereby improving the entity's financial situation. Overall, the proponents resolved the entity's profit maximization problem with the proposed course of action. The financial objective is also achieved as the entity gained the target receivable turnover of 4 to 8 times annually, earned an accumulated 20% increase in its revenue, and increased by 4 to 10 times in its payable turnover annually.

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