Case Analysis on Bargain Mart, Inc.

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De La Salle University

Ramon V. Del Rosario College of Business

Management of Financial Institutions Department

Case Analysis on

BARGAIN MART, INC.

 In partial fulfillment

of the course requirements in

MSC535M – Financial Management

Submitted to Prof Ken Yumang

Prepared by Group 4

Jed Abapo

Clarice Acorda

April Joy Balabat

Jonalyn Mendoza[pic 4]

Adonis Lee Villamor[pic 5]

TABLE OF CONTENTS

I.        CASE BACKGROUND        2

II.        PROBLEM STATEMENT        3

III.        POINT OF VIEW        3

IV.        ASSUMPTIONS, SCOPE and LIMITATIONS        4

V.        CASE ANALYSIS AND FRAMEWORKS        4

A.        Financial Analysis        4

B.        TOWS        7

C.        COMPARATIVE ANALYSIS OF OFFERED SERVICE WITH COMPETITOR        8

VI.        ALTERNATIVE COURSES OF ACTION        9

VII.        LOGICAL ANALYSIS        10

VIII.        LOGICAL CONCLUSION and RECOMMENDATION        11

1. CASE BACKGROUND

        Bargain Mart, Inc, was established as a small grocery store in 1963 located in Cubao that offered the most complete product line at the most reasonable prices.  In 1965 to 1970, further expansion was made.  Head office was established in Makati along with the construction of additional branches in Makati Avenue, Greenhills, Cebu, Iloilo and Bacolod.  Over its 19 years of existence, the company’s net sales reached P251 million with total assets valued at P32.8 million.  

        Bargain Mart, Inc. trusted the Progressive Banking Corporation (PBC) for its cash management and Metro Bank for its financing requirements for their quality and wide range of services offered, nationwide branch network, stability, interest rates and prompt action of service requests and processing of the company’s loan.  PBC offered the following services to Bargain Mart: (1) pick-up and delivery services; (2) a special teller accommodation; (3) technical advisory services on investments; (4) higher interest rates on money market placements; and (5) additional security measures to protect the case-in-transit.  However, Mr. Raul Salas, Bargain Mart’s VP for Finance, in a meeting with Mr. Ralph Lorenzo, branch manager of Banko Nasyonal, mentioned their intention to change the bank for their cash management needs.  Bargain Mart’s was disappointed because of PBC’s frequent failure to collect cash proceeds from Makati branch causes the company to kept a huge cash collection of P500,000 to P600,000 to its vault overnight.  This had necessitated the employment of additional security personnel and the demand for employees to render overtime services thus increasing the company’s overhead cost.