MGAB02H3 : Case Handout
Document Summary
Mgt b06 2012 winter case handout 4. Xyz environmental insulations ltd. manufactures a low cost, highly efficient insulation for use in buildings. The company is private and has one shareholder. The product was invented about seven years ago and was introduced to the market soon after. Sales grew slowly in the first few years but increasing awareness among builders and homeowners and higher heating costs have caused sales to increase domestically over the last few years. The company has been unable to keep up customer demand and is concerned it will lose business to competitors, even those with inferior products. You have been provided with xyz"s cash flow statements for the year ended december 31, 2014 and 2015. As the company may consider going public some time in the future, they have adopted ifrs standards in preparing their financial statement. Prepare a report to management explaining the reasons for the company"s cash problem despite its profitability.
