Writing Homework Help

Case 10.2: Massachusetts Stove Company: Analyzing Strategic Options

REQUIRED:

a. Identify clues from the financial statements and financial statement ratios for Year 3–
Year 7 that might suggest that Massachusetts Stove Company is a mature business.

b. Design an excel spreadsheet for the preparation of projected income statements, balance
sheets, and statements of cash flows for MSC for Year 8–Year 12. Also forecast the
financial statements for each of these years under three scenarios: (1) best case, (2)
most likely, and (3) worst case. The following sections describe the assumptions you
can make.

c. Calculate the financial statement ratios listed in Exhibit 10.16 for MSC under each
of the three scenarios for Year 8–Year 12. Note: You should create a fourth spreadsheet as part of your preparation of the
projected financial statements that will compute the financial ratios.

d. What advice would you give the management of MSC regarding its decision to
enter the gas stove market? Your recommendation should consider the
profitability and risks of this action as well as other factors you deem relevant.

(I put together attachments you may find useful and eliminate some of the confusion on the loan part and interest expense. Including the full Case 10.2: Massachusetts Stove Company: Analyzing Strategic Options below.)