A Case Study on Miniscribe Corporation

A CASE STUDY ON MINISCRIBE CORPORATION

BA 219 - Corporate Financial Reporting

Submitted to:

Dr. Helen S. Valderrama

by:

Cascon, Kendrick
Josef, Rachel

Mariscotes, Christian

Zuniga, Jose Antonio

University of the Philippines

Diliman, Quezon City

November 5, 2015

EXECUTIVE SUMMARY

The study was about MiniScribe Corporation, a computer disk drive manufacturer that was reputed to be experiencing difficulties in cash flows and inventories. The objective of the report is to come up with a decision if Alexander and Ferris brokerage firm should continue to retain MiniScribe on its ‘Buy’ recommendation list or not.  Research analyst, Paula Perry, was tasked by his manager to investigate the financial position and performance of MiniScribe Corporation using the available financial and qualitative information. The case was therefore analyzed from Paula Perry’s point of view as a research expert who must make a recommendation.

The analysis was conducted to obtain additional information from a given data and proceeding with an interpretation of the results. The group evaluated the case through analytical methodology that started from reviewing significant historical events of MiniScribe. Using the unaudited interim financial statements, the group prepared the statement of cash flow and this was examined to determine if the company has still enough cash to continue its operation.  The group also calculated the company’s financial ratios to extract more quantitative information and was examined as compared to the disk drive manufacturers industry. MiniScribe’s stock price highs and lows were also evaluated. The ‘red flags’ gathered from all these analyses served as the group’s focal point in coming up with a recommendation.

After having a thorough investigation of the financial statements, financial ratios, and industry trends, the group recommends that MiniScribe be removed from Alexander and Ferris’ ‘Buy’ recommendation list. The firm’s liquidity, efficiency and profitability issues and other aggravating factors led the group to seriously question MiniScribe’s ability to continue as a going concern.

TABLE OF CONTENTS

I. CASE CONTEXT/BACKGROUND        pages 1-2                                        

II. PROBLEM DEFINITION AND POV        page 2