Five-Year Strategic Plan For Nebraska Container Company

List of Recommendations

This report has been prepared to evaluate the performance and the position of the company, The Nebraska Container Company, on the basis of financial and marketing factor of the company. The given case explains that the company has an uneven history and various changes are required to be done by the company to manage the financial performance and the stock performance in the market. In this report, strategic plans of the company have been presented and the recommendation has been given to the company for next 5 years for betterment of the company. Further, it also explains that the how the changes would impact on the financial performance and the position of the company.

For preparing this report, the entire case and the last 5 years performance of the company has been evaluated and the recommendation has been provided to the management of the company accordingly. The company has faced few changes in last 5 years and explains that the performance and the position of the company would also change in near future. Further, it explains that the recommendation would assist the company to manage the performance.

Following is the list of recommendation which must be done by the company to manage and evaluate the performance of the company. These recommendations make it easier for the company to achieve the goal and enhance the performance and the profitability position of the company. It explains that the performance and the operations of the company should be changed to manage the financial position of the company. Recommendations are as follows:

1. Reduce the level of the assets so that the profitability position of the company on the basis of assets has been enhanced and the maximum utilization of minimum resources could be done (Schaltegger & Burritt, 2017).
2. Investment must be done in new projects to enhance the return level of the company.
3. Return on equity level of the company should be improved through making the changes into the capital structure of the company and the operations of the company.
4. Operating expenses of the company should be evaluated and the relevant changes are required to be done to enhance the net profit margin of the company (Zimmerman & Yahya-Zadeh, 2011).
5. Balance sheet items and the level of those items of the company should also be changed.

1. Return on assets improvements:

The recommendation explains that the assets level should be maintained so that the maximum utilization of the minimum resources could be done and at the same time, the ROA position of the company could be better. Following is the quantitative analysis of the company:

(Macintosh & Quattrone, 2010)

1. New investment opportunity of the company:

The recommendation explains that the company should evaluate the new project and must invest into these proposals to enhance the return. The cash could be managed by the company for the investment purpose, through assets sales and the profits of the company. Following profits would be got by the company is the investment would be done in the new projects:

(Higgins, 2012)

1. Return on equity improvements:

The recommendation explains that the equity level should be maintained so that the capital structure of the company could be maintained and at the same time, the risk and cost of the company could also be managed.  The better changes into equity would help the company to manage the ROE position (Baldvinsdottir, Mitchell & Nørreklit, 2010). Following is the quantitative analysis of the company:

Quantitative Analysis

(Brigham & Houston, 2012)

1. Operating expenses:

The recommendation explains that the operating expenses level should be maintained by the company so that the profitability level of the company could be maintained and at the same time, the position of the company could also be managed.  The better changes into operating expenses would help the company to manage the operating expenses and net profit margin position (Brigham & Ehrhardt, 2013). Following is the quantitative analysis of the company:

1. Balance Sheet:

Balance sheet format of the company explains about the Total assets, total liabilities and total equity of the company. The recommendation explains that the capital structure level should be maintained by the company so that the solvency level of the company could be maintained and at the same time, the position, risk, return and the cost of the company could also be managed (Garrison, Noreen, Brewer & McGowan, 2010).  The better changes into balance sheet would help the company to manage the financial performance and profitability position. Following is the quantitative analysis of the company:

(Fabozzi, Neave & Zhou, 2011)

The above recommendation and their changes into the performance and the position of the company explain that it would directly make an impact on the financial performance of the company. Few of the impacts of financial performance of the company are as follows:

1. Return on assets improvements:

This recommendation explains that the return on assets would directly make an impact on the performance of the company. It would affect the income statement and the balance sheet of the company. Further, it explains that the return on assets would directly make an impact over the total profitability position of the company, resources of the company and the capital structure position of the company. The calculations and the quantitative calculations explain about the better performance of the company is next 5 years. It further explains that if the company would follow the given recommendation than the position and the performance of the company would be better (Hilton & Platt, 2013).

1. New investment opportunity of the company:

This recommendation explains that the new investment opportunity of the company would directly make an impact on the return, performance of the company. It would affect the income statement and the balance sheet and the cash flow statement of the company (Khamees, Al-Fayoumi & Al-Thuneibat, 2010). Further, it explains that the new investment would directly make an impact over the total profitability position and total cash flow of the company, resources of the company and the capital structure position of the company. The calculations and the quantitative calculations explain about the better performance of the company is next 5 years (Ward, 2012). It further explains that if the company would follow the given recommendation than the position and the performance of the company would be better.

1. Return on equity improvements:

Financial Impact of the Recommendations

This recommendation explains that the return on equity would directly make an impact on the performance of the company. It would affect the income statement and the balance sheet of the company (Baker, Dutta & Saadi, 2010). Further, it explains that the return on equity would directly make an impact over the total profitability position of the company, resources of the company and the capital structure position of the company. The calculations and the quantitative calculations explain about the better performance of the company is next 5 years. It further explains that if the company would follow the given recommendation than the position and the performance of the company would be better (Singh, Jain & Yadav, 2012).

1. Operating expenses:

Further, this recommendation explains that the operating expenses would directly make an impact on the profitability position and the performance of the company. It would affect the income statement firstly and after it, the balance sheet of the company and the cash flow statement would also be affected (Jagannathan, Matsa, Meier & Tarhan, 2017). Further, it explains that the operating expenses would directly make an impact over the total profitability position of the company, resources of the company and the profitability position of the company (Lukka & Modell, 2010). The calculations and the quantitative calculations explain about the better performance of the company is next 5 years. It further explains that if the company would follow the given recommendation than the position and the performance of the company would be better.

1. Balance Sheet

Lastly, the recommendation about the balance sheet of the company explains that the total assets, total liabilities and total equity would directly make an impact on the performance and the financial position of the company (Hornstein & Zhao, 2011). It would affect the balance sheet of the company and due to it; the income statement and cash flow statement of the company would also be affected. Further, it explains that the balance sheet would directly make an impact over the total debt position, capital structure position of the company, resources of the company etc of the company. The calculations and the quantitative calculations explain about the better performance of the company is next 5 years (Parker, 2012). It further explains that if the company would follow the given recommendation than the position and the performance of the company would be better.

Further, the study has been done on the four divisions of the company which are financial services outlook, energy and packaging and forecast products. The study has been conducted on all the four segments to evaluate the cash flow analysis of all the projects and it has been evaluated that the cash flow of all the four projects is different to each other. The evaluation on the financial service outlook has been done firstly and it has been found that the cash outflow and the cash inflow of the project would be different in each year and it would explains the company about the total profit of the company which could be earn by the company in current financial year (Renz & Herman, 2016). Further, it explains about the total performance and the total position of the company. The net profit valuation of the company explains about the total profit of $ 62,40,87,014.85 in 8 years.

Further, the calculations of energy sector has been evaluated and it has been found that the cash outflow and the cash inflow of the project would be different in each year and the returns of the project also varies in each year. Further, it would explain the company about the total profit of the company which could be earn by the company after 12 years. Further, it explains that this project is not more profitable for the company. The net profit valuation of the company explains about the loss would be faced by the company in this case (Bierman & Smidt, 2012).

In addition, the calculations of packaging sector has been evaluated and it has been found that the cash outflow and the cash inflow of the project would totally be dependable on the total sales and the operations of the company. Further, it would explain the company about the total profit of the company which could be earn by the company after 10 years. Further, it explains that this project average profitable for the company. The net profit valuation of the company explains about the moderate position of the investment and explains about the average performance of the company (Bennouna, Meredith & Marchant, 2010).

In addition, the calculations of forest product outlook sector has been evaluated and it has been found that the cash outflow and the cash inflow of the project would totally be dependable on the total products and their position in the market. Further, it would explain the company about the total profit of the company which could be earn by the company after 10 years (Gervais, Heaton & Odean, 2011). Further, it explains that this project is quite profitable for the company. The net profit valuation of the company explains about the good position of the investment and explains about the better performance of the company in the market. More, it depicts that the company would offer huge return to the company.

Conclusion:

The above study explains about the financial position and the performance of the company. This report has explained about the performance and the position of the company, The Nebraska Container Company, on the basis of financial and marketing factor of the company. The study explains that the company has an uneven history and thus few recommendations have been given to the company to manage the financial performance and the stock performance in the market. According to this report, strategic plans of the company for next 5 years explain that the company would enjoy the betterment. Further, it also explains that the recommendation would impact on the financial performance and the position of the company.

The case explains that the financial performance and the position of the company would be better if all the given recommendations would be followed by the company. Further it explains that if the company would follow the given recommendation than the position and the performance of the company would be better.

References:

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Bennouna, K., Meredith, G. G., & Marchant, T. (2010). Improved capital budgeting decision making: evidence from Canada. Management decision, 48(2), 225-247.

Bierman Jr, H., & Smidt, S. (2012). The capital budgeting decision: economic analysis of investment projects. Routledge.

Brigham, E. F., & Ehrhardt, M. C. (2013). Financial management: Theory & practice. Cengage Learning.

Brigham, E. F., & Houston, J. F. (2012). Fundamentals of financial management. Cengage Learning.

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