MBA541MEMO - TO Board of Directors Small Publicly Traded...

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TO: Board of Directors, Small Publicly Traded Company FROM: CEO, Small Publicly Traded Company DATE: May 22, 2011 SUBJECT: Evaluation of Chief Financial Officer’s Recommendations Pursuant to the Board’s request, I have reviewed the six recommendations from the Chief Financial Officer (CFO) with regard to increasing Small Publicly Trading Company’s (SPTC) Return on Net Operating Assets (RNOA) and our operating cash flows. Improvements in these two areas will presumably result in improved financial performance and an increased stock price. Below I have listed my evaluation of the six recommendations, which I hope the Board will consider carefully before implementing any changes. 1. Recommendation number one was to reduce inventories and receivables to improve net cash flow from operating activities. I agree with this recommendation, because every dollar tied up in receivables is one less dollar available for cash flow. Taking these steps will also improve our Residual Operating Income (ROPI) valuation model and therefore this recommendation will positively impact the operating performance of
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This note was uploaded on 11/13/2011 for the course MBA 541 taught by Professor Debrakeith during the Spring '09 term at Bellevue.

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MBA541MEMO - TO Board of Directors Small Publicly Traded...

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