If Genesis needs operating cash, how should it fund this need? Are there internal policy changes with regard to collections or payables management you would recommend?

Genesis cash position analysis | Business & Finance homework help

The Genesis team has identified the need for additional capital and are preparing to expand operations abroad. In order to ensure success, it is imperative that they have a reliable source of funds for both short-term and long-term needs. The management team should research all available options in the external financing market including obtaining a loan, issuing debt or equity securities, applying for a line of credit or obtaining venture capital funding. Each option comes with its own advantages and disadvantages so it is important to understand the terms before making any decisions.

When reviewing the cash budget, it is important to consider whether it reflects weak sales performance or poor cost control as these will have different effects on the company’s ability to access funds. For example, if sales are lower than expected then this could affect their ability to obtain external financing as lenders may be more cautious about investing in an unprofitable company. Similarly, if costs are too high relative to revenue then this could also inhibit their ability to get financing as investors may view this a financial risk. Therefore, when analyzing their finances the Genesis team should look at both sales performance and cost control measures in order determine what changes need to be made in order ensure successful implementation of their expansion plan.