Star River Electronics Ltd.
E E.
TT
CC
Team X
22nd May 2008
Contents
Objectives ..................................................................................................................................................... 1
Management Summary ................................................................................................................................ 1
Item 1 ............................................................................................................................................................ 2
Sub 1.1 ..................................................................................................................................................... 2
Sub 1.2 ..................................................................................................................................................... 2
Conclusion................................................................................................................................................ 2
Item 2 ............................................................................................................................................................ 2
Sub 2.1 ..................................................................................................................................................... 2
Conclusion................................................................................................................................................ 2
Item 3 ............................................................................................................................................................ 2
Sub 3.1 ..................................................................................................................................................... 2
Sub 3.2 ..................................................................................................................................................... 2
Conclusion................................................................................................................................................ 2
Item 4 ............................................................................................................................................................ 2
Item 5 ............................................................................................................................................................ 2
Appendices.................................................................................................................................................... 2
Star River Electronics Ltd.
Page i
Objectives
This report seeks to answer the following five questions about 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?
2. Forecast the firm’s financial statements for 2002 and 2003. What will be the external
financing requirements of the firm in those years? Can the firm repay its loan within a
reasonable period?
3. What are the key driver assumptions of the firm’s future financial performance? What are
the managerial implications of those key drivers? That is, what aspects of the firm’s
activities should Koh focus on especially?
4. What is Star River’s weighted-average cost of capital (WACC)? What methods did you
use to estimate WACC? What are the key assumptions that especially influence WACC?
5. What are the free cash flows of the packaging machine investment? Should Koh approve
the investment?
Star River Electronics Ltd.
Page 1
Management Summary
Item 1
Sub 1.1
Sub 1.2
Conclusion
Item 2
Sub 2.1
Conclusion
Item 3
Sub 3.1
Sub 3.2
Conclusion
Item 4
Item 5
Appendices
Star River Electronics Ltd.
Page 2