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_aMendoza, Catherine M. et.al.
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_aA Five Year Financial Plan of Titan Rubber Ind'l Mfg. Corporation /
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_cMendoza, Catherine M.; Loma, Jeffrey F.; Obrero, Maureen; Malaque, Jonalyn; Ligeralde, Laline; Maninang, Marico Dyan; Par, Jazzelle May; Pechuanging, Antoinette V. and Petate, Phillip Leonard.
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_cFebruary 2012.46
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_c28 cm.
_a113 pp.
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_atext
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_aunmediated
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_aFinancial Plan (BSBA major in Finance and Treasury Management) - Pamantasan ng Lungsod ng Maynila.2012.
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_aEXECUTIVE SUMMARY: TITAN RUBBER IND'L MFG CORP is a medium enterprise specialized in manufacturing rubber with the assistance from Shinei Polymer Japan and Kukdong Industries in Korea. The corporation is owned by Dee Kwan Ming and registered with the Philippine Exchange Commission on June 22, 1989. The firm has the established trust and confidence of the customers given the fact that it covers about 11.55% of the total share of the Rubber Manufacturers in the country. Despite of the progress in profitability and expansion for the past 5 years, the company experiences difficulty in meeting its current and long term obligations. The firm is highly dependent on debts having the higher percentage of debt than its equity which affects the way of paying their borrowings. Hence the firm's wrong financial decision instill an unfavourable impact resulted to the illiquidity of the company. Increasing accounts receivables is one of the specific problem the company struggles with. It implies greater risk on prompt collections resulting to delayed earnings. Based on the comparative statement analysis from the financial statements, total assets had increased due to the continuous increase of accounts receivables which lead to low receivable turnover in a year. Another unfavourable state of the firm is the higher costs it incurs due to high level of inventories. In line with this is the unfavourable merchandise inventory turnover and average days in inventory of the company because the company encompasses a low turnover of inventory in a year and a long inventory period. The company has very slow cash cycle due to the long average collection period. Due to higher expenses of the company, the costs incurred absorb the large portion of the total assets resulting to unfavourable profitability. Based on common size statement analysis, cost of sales obtains the largest portion of the revenue even if the operating ratio is decreasing which indicates that the cost of operations declining against its sales. The firm also faces problem in meeting its current obligations in relation to its total assets. Current ratio and acid test ratio of the company is unfavourable given that the ratios didn't reach at least 1. In the financial ratio analysis, current ratio and acid test ratio of the company is unfavourable given that the ratios didn't reach at least 1. In addition, current assets to total assets ratio is very low. The firms accounts receivables are increasing implying greater risk on prompt collection resulting to delayed earnings. In order to address this problem, the firm will offer discount to incentivize customer to pay as soon as possible which will consequently accelerate the receivable turnover. Likewise, reducing credit terms is also an opportunity in order to have a shorter collection period which in the long run will upsurge the cash resources of the company. And while the long average collection period contributes to the firm's slow cash cycle, reduction of accounts receivables by means of offering alternative payment methods including credit cards and bank transfers will be an option that will subsequently improve its turnover. Since there is a glitch in the company's earnings due to the higher cost it incurs cused by the level of inventories, new inventory control system specifically the min-max inventory control system might be adopt which would result to the reduction of inventory level among with the increase in Net income and the decrease in the firm's liability. Since the proponents solved the major problems of the firm in relation to their accounts receivables and inventory, liquidity aspect of the company will also be affected which would lead to the company's efficient operation.
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