The assignment concerns the case “Supply Chain Finance at Proctor & Gamble’ that is included in the coursepack(https://hbsp.harvard.edu/import/715741).
(1) Estimate DPO for P&G in 2012 using the standard and adjusted approaches discussed in Exhibit 3 of the case (page 11). Note that the P&G Income Statement features COPS (Cost of Products Sold) in place of the conventional term COGS (Cost of Good Sold). Consider also the information about total purchases near the top of page 6: what is the DPO estimate for 2012 if P&G total purchases are used instead of COPS?
(2) If P&G extend payment terms by 30 days, what should be the increase in accounts payable? Calculate the possible increase three times, using in turn the three DPO calculations you made for question (1).
 
(3) Since accounts payable is a liability on the balance sheet, a change in accounts payable must also entail a change in assets (in order to keep the balance sheet in balance). The change in assets should appear as an increase in cash on the balance sheet. With respect to this, see the following article: https://www.nytimes.com/2015/04/07/business/big-companies-pay-later-squeezing-their-suppliers.html According to the article, P&G had added around $1 billion in cash flow by 2015, as a result of their SCF program. (The cash increase on the balance sheets of P&G between 2012 and 2015 is much more than $1 billion; only part of the total cash increase is due to the SCF program.) Does the figure of $1 billion fit with the increase in accounts payable you calculated above? If not, explain how to get to the $1 billion figure mentioned in the article.
 
(4) Fibria Celulose (FC) agreed to extend payment terms with P&G from 60 to 105 days, i.e., an extension of 45 days (page 7). What could explain why this extension is longer than the extension of 30 days that P&G announced it would propose in general?
(5) Without SCF, the extension of 45 days in payment terms entails a longer cash conversion cycle for FC when doing business with P&G. After the payment term extension and prior to any application of SCF, what would be the cash conversion cycle for FC when doing business with P&G? (Don’t calculate the overall cash conversion cycle for FC using their financial statements: that would include all customers, not just P&G.)
(6) Without SCF, the extension of 45 days in payment terms entails an increase in accounts receivable on the balance sheet of FC (and a corresponding decrease in cash, on the same side of the balance sheet). Considering the information in the case, estimate the increase in accounts receivable for FC that results when payment terms with P&G are extended by 45 days.
(7) Prior to starting the SCF program, P&G has offered suppliers “invoice discounting,” i.e., the option to receive early payment, at the price of a percentage reduction in the invoice amount (see page 5). Consider the case of a 1% reduction for payment 30 days early. This means that a  POM 628 001, Spring 2019. Assignment #1. Page 2 of 2 supplier that has an outstanding invoice for $1,000 that is due to be paid in 30 days can get paid today and receive $990. What is the implied annual interest rate in this discount? What is the implied annual interest rate in the discount of 2% for 60 days early payment?
Hint Consider the percentage return that would result from leaving $990 unpaid so that $1,000 would be received instead in 30 days. Scale this percentage return to show the corresponding annual return in the hypothetical case that the money were left to earn interest at the same rate for 365 days

Competency
Analyze the right market entry method(s) for a given company for a particular region.
Instructions
Case Study
Review the case study above and prepare the necessary document as explained below.
Use the following website as a starting point for research on this project:
The World Factbook
In addition, you may likely need to do some additional research to help complete this project.
Using Brazil to expand into.
Rocky Mountain Chocolate Factory (RMCF) has hired you as a consultant to help them with a planned expansion into a new market. Your role is to help facilitate this expansion into a new country/region, and to point out options and possible hurdles the company will face that they aren’t aware of. Write a business memo to the Director of New Business (DNB) outlining the overall business environment for the expansion, including the following:

1. Indicate what the expansion strategy method should be for the country or region of your choosing.
2. Identify three different factors that would support your entry strategy that you choose for your particular country or region and explain why they will beneficial.
3. For the market entry method you choose, discuss two disadvantages to using this method for the expansion.
4. Ensure your report has an introduction properly describing the general situation of what it will address, and then a conclusion wrapping up your points and what you addressed in the report and validating the market entry method you choose for RMCF.

 

Factors Affecting International Business Expansion

Competency
Determine relevant factors allowing international business to succeed in a particular region or country.
Instructions
Case Study
Review the case study above and prepare the necessary document as explained below.
Use the following website as a starting point for research on this project:
The World Factbook
In addition, you may likely need to do some additional research to help complete this project.
Please choose from one of the following countries to expand into: Japan, Brazil, India, Liberia, Ukraine, or Thailand.
Rocky Mountain Chocolate Factory (RMCF) has hired you as a consultant to help them with a planned expansion into a new market. Your role is to help facilitate this expansion into a new country/region, and to point out options and possible hurdles the company will face that they aren’t aware of. Write a report to the Chief Operations Officer (COO) and outline the overall business environment for the expansion, including the following:

1. Choose a country or region for the expansion, considering the details of the case study.
2. Identify the four relevant factors that will affect an expansion into this new market in a positive way.
3. For each factor identified, identify how these factors will directly benefit RMCF in its expansion into the new market.
4. What are at least two obstacles will need to be overcome in this expansion effort, and what is the recommendation to overcome them?
5. Ensure your report has an introduction properly describing the general scenario of what it will address, and then a conclusion wrapping up your points and what you addressed in the report.

Project: Personal Financial Budget & Plan
One of the most critical aspects to starting, running or growing a business is the financial budget, plan & strategy. Entrepreneurs, finance managers and business leaders need to be able to plan for the daily and long-term financing needs of their organization. They need to ensure they have liquidity to pay employees & vendors while also investing in the business. They also need to keep their focus on other aspects, such as, growing sales, investing in new technology and their facilities. Managing the organizations’ capital is critical to business success.
This is also critical in personal finance. Students will be expected to develop their own personal 10- year financial plan. The objective is that students learn how to build a financial plan for the short term and long term while considering their goals & potential needs. This should also help to get them thinking about strategies, such as paying off student debt, traveling, investing, managing risk and cashflow. Students may also be interested in starting their own businesses and can use this to start developing a plan. The final product will be a formal plan that outlines their monthly budget for the near term and annual targets for the long term. In addition, the final report should outline their goals and strategies for achieving their objectives.