Tuesday, February 11, 2020
Finance Case Study Example | Topics and Well Written Essays - 500 words
Finance - Case Study Example It should be noted that the selection of the family members for their respective positions are due to their being the relative of the founder and cannot be credited to their skills or experience in the industry. The current poor financial performance of G-III might be attributed to this set-up. Even though some of the important executives of G-III are not family members, the Goldfarbs are still in the highest ranks which place them in the position of making the final decisions even though some lower level executives disagree or might recommend otherwise. The efficiency of the management team is indicated by the financial position of G-III in comparison to other industry players. The case stated that in general, G-III has expanded market share from 2% to 10% with a compounded increase in revenue of 68% from 1986-1989. The market has grown faster at a rate of compounded 75% making G-III quite slow to respond to market expansion. Financially speaking, most of the company's resources are financed by riskier short term debt instead of long-term ones. As G-III is cash strapped, the company is illiquid and cannot pay its current obligations if they become due immediately. It also becomes apparent that the remedy for this will be from the capital which will be raised from the IPO.