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External Financing

Genesis Energy’s newly established operations management team decided   to seek outside assistance in developing a long-term operating plan   that also addresses the financial issues identified. A major   consideration for Genesis Energy is assessing those short-term and   long-term economic factors, which will greatly enhance the company’s   ability to successfully transition to a viable international business.   Grasping and correctly prioritizing these economic factors, supply and   demand, interest rates, inflation, unemployment, and exchange rates are   pivotal, thereby requiring expert guidance. Therefore, their first  major  decision was to hire a respected strategy-consulting firm,  Sensible  Essential Consulting.
 

After meeting with the client team,  Sensible Essential Consulting  concluded that the operations management  team would significantly  benefit from a more in-depth understanding of  the financial environment  at Genesis Energy. This understanding needed  to encompass not only  sales, costs, and profitability forecast under the  new strategic plan,  but also the way expansion would highlight the need  to manage working  capital and cash flow in order to try to minimize the  need for external  financing.
 

As the lead consultant for Sensible Essential Consulting, do the following:

  • Describe and evaluate the financial environment at Genesis Energy by using ratio analysis of the company.
  • Choose one ratio from each of the five categories listed in the   table on page 103 of your textbook, Brigham and Ehrhardt, and do a   3-year ratio trend analysis. Compare these results to the industry   averages. What do the results tell you?
  • Name three specific options that are available to Genesis Energy for obtaining needed capital.
  • Identify and explain two ways Genesis Energy can improve its strategy.
  • Explain what specific macroeconomic factors are likely to affect   genesis, i.e., inflation, interest rates, exchange rates etc. Please do  a  brief country risk assessment and discuss the most likely problems a   company like Genesis Energy is likely going to confront when   contemplating an international expansion. What would be the least risky   avenue for them to get their product/service to the country you have   chosen? Which entry mode is the riskiest? Explain.

Write a 3–4-page paper in Word format. Apply APA standards to   citation of sources. Then, create a 6–8-slide PowerPoint with Speaker’s   notes and references (including research) presenting your findings to   the Genesis Energy operations management team. 

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