This is a Thunderbird case study. Primo Benzina AG, a retail group of petrol stations in central Europe offered petrols, chips and snacks, meals and top quality service. The organization initiated working with only four branches and a sale figure of €2.4 million in 2006,. It soon expanded to have 24 outlets and a sale figure of €38.1 million by 2009. Dresender Bank subsequently agreed to raise the maximum amount for the company to €12 million from €10 million. In the beginning of 2010, Otto Schroder, the CEO and AnnegretHeuermann, the CFO of the company finished an assessment of the company’s financial standing. The company’s leadership was not sure about how the new credit extension would allow the organization to put to action its growth and expansion plans , since the company now had a restricted amount of cash in hand to fund further avenues for working capital and capital expenditures.
Cash Flow Statment
Based on the information provided in Exhibit 2, prepare the Company's Statements of Cash Flows for each of the two years ended on December 31, 2008 and 2009. You will need to make certain assumptions; make sure that you document each assumption.
Analyze the Company s cash flow pattern based on the graphs studied in class and explain it based on the Company s Strategy.
Do you think that, based on the Company s cash flow pattern and history and on its financial condition as depicted in Exhibit 2, it will be able to fund three new retail facilities? Explain. (If your answer is no, provide ideas about how the Company may be able to do so).
QUESTION II: FINANCIAL STATEMENT ANALYSIS
Exhibit 4 provides certain ratios for the Company s competitors. Calculate the same ratios for the Company but do so for the years 2007, 2008 and 2009. (You should prepare a table). Explain what each of the ratios implies about the Company.
Perform a time series analysis using the ratios calculated above as well as horizontal and vertical analysis (growth percentages and common sized financial statements). Furthermore, compare the Company to its industry peers.
If you were to invest in this industry, would you invest in the Company s shares or would you invest in one of its competitors listed in Exhibit 4. Explain.