Star River Electronics - 1819 Words

In Partial Fulfillment Of the Course Requirement In Management Financial Planning Submitted to: Professor Raymond Queddeng Submitted by: Group 3 Alfabeto, Carmela Conos, Via Leal, Diva On: November 17, 2007 I. CASE BACKAGROUND Star River Electronics (SRE) was a joint venture company between Starlight Electronics Ltd., and an Asian venture-capital firm, New Era Partners. The company was based in Singapore, and was engaged into the manufacturing of CD-ROMs which it supplied to major software companies. The CD-ROM manufacturing industry grew rapidly in the mid-1990s due to the popularity of optical and multimedia products. Because of the emergence of small, but aggressive players,†¦show more content†¦Ã¢â‚¬ ¢ Any external funding needed is in the form of debt. †¢ Any other assumptions are based on the historical analysis of reports. †¢ To find the rate of interest of New Era Loan, multiply the borrowings of bond issue and short term borrowings to their rates then deduct the total of the two interest amounts from the total interest expense in 2001 (SGD7,818). The given interest rates are: a) 6.7% was computed as Prime Lending rate of 5.2% + 1.5% (City Bank); b) interest rate on bond issue was stated at 5.75% which is paid semi-annually. The interest expense attributed to the New Era loan of SGD10,000 is a balancing figure. The interest rate to be used for all short-term borrowings should be 7.58%.. 3. What is the company’s sustainable growth rate based on the projections for 2002 and 2003? Is the company growing beyond its financial capabilities? Based on the company’s 2001 performance, the computed sustainable growth rate is at 10.95%. This means that the forecast 15% sales growth per year for 2002 and 2003 is above the maximum growth rate that SRE can maintain without resorting to additional borrowings. Given this, it can be surmised that if SRE is compelled to target this annual growth for the next two years, then it will have to be prepared to increase the level of its short-termShow MoreRelatedStar River Electronics Ltd.1582 Words   |  7 PagesSTATEMENT OF THE PROBLEM Star River Electronics Ltd. is a large manufacturer and supplier of CD-ROMS. It was founded as a joint venture between New Era Partners and Starlight Electronics Ltd. It has enjoyed a great deal of success in the past decade, due in large part to their excellent reputation. Star River does need to address several issues with the recent resignation of their former CEO. Digital Video Disks are expected to cut into the CD-ROM market in the very near future, and with only 5%Read MoreCase 26 - Star River Electronics Ltd.1419 Words   |  6 Pages Muhammad R.K. Chishty Advanced Corporate Finance 2 March, 2015 Case 26 – Star River Electronics Ltd. Introduction Star River Electronics is a joint venture between England’s Starlight Electronics Ltd. and an Asian venture-capital firm, New Era Partners. Star River Electronics is based in Singapore, and its mission was to manufacture CD-ROMs as a supplier to major software companies. Star River Electronics has gained fame in the industry for producing high quality discs. As the opticalRead MoreCase Analysis of Star River Electronics Ltd.†4097 Words   |  17 PagesCase Overview: Star River Electronics Ltd. Star River Electronics Ltd. is a large manufacturer and supplier of CD-ROMS based in Singapore. 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But due to recent emerge of Digital Video Disks (DVDs) Star River Electronics does need to face someRead MoreStar River Electronics Case Solution Essay3063 Words   |  13 PagesFlorida Atlantic University Star River Electronics Ltd. – Case Analysis Case Summary Star River Electronics is a joint venture company that has gained respect within the industry for producing high quality CD-ROMs to major software companies. In the mid 1990s, multimedia products created a high demand for CD-ROMs, allowing manufacturing companies of all sizes to enter the market. As a result, an oversupply ensued causing prices to decline as much as 40%. Star River survived a period of consolidationRead MoreAFIN832 Case study 1: Star River Electronics Ltd1888 Words   |  8 Pages  AFIN832 Case study 1: Star River Electronics Ltd     1. Assess the current financial health and recent financial performance of the company. What strengths and/or weaknesses would you highlight to Adeline Koh? 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