CACERES SEMILLA S.A. de C.V.

Case
PROBLEM STATEMENT:
After assessing the situation of Caceres Semilla S.A. de C.v., what should the
company do in order to present financial information accurately making its
payment obligations on time?
OBJECTIVES:
1. To pay obligations on time.
2. To practice faithful representation in their financial information.
AREAS TO CONSIDER:
CACERES COMPANY
Limited Liability Company
Variable capital
Specialized in selling corn seed
COMPANYS FINANCING
Long Term mortgage Loan
Bank Loan
SALES FORECAST
Average Collection Period is 1 month after sales
Purchases are to be paid with a lag of 2 months
FINANCIAL STANDING
Increase In Accounts Receivable, inventories, Fixed Assets
EXECUTIVE SUMMARY:
Prudencio Jimenez, chief administrative and financial officer of Caceres Semilla
S.A. de C.V., was concerned about forthcoming negotiations with the companys
bank, Banco Popular de Santa Fe. To renew a lending arrangement,he has to
present a financial plan to the bank for fiscal year 2000. In July 2008, during the
past fiscal year, the company had overdrown its account and Jimenez had received
a reprimand from the general manager of the bank, Carlos Fernandez Cristobal,
with whom the company has done business for a number ofyears. The problem
arose because of inefficient bookkeeping at the company, together with a big
account delaying payment beyond a promised date. As the fiscal year just ended
was February 28, 1999, negotiations over lending arrangements take place in
March.

TIME CONTEXT
1888- the company was founded by Jaime Caceres in Esperanza, Argentina
1924- the old plant was constructed w/ add-ons every year
1960s- began to contract for and sell alfalfa seed
1970s- some equity capital was raised from extended family members
1980s- sale grew rapidly in keeping w/ an aggressive marketing effort
1987- contract growers accounted for only 47% of seed purchases
1993- the company completely rebuilt its plant
1998,March- company was out of bank debt
1998,August- the company has overdrawn its account. Senior Jimenez sent in a
loan note of slightly above 5 million pesos
1999,March- Prudencio Jimenez was required by the bank to prepare pro forma
statements for fiscal year 2000
SWOT ANALYSIS:
Strengths (S)
Good relationship among customers and staff of the company
Limited liability company
Weakness (W)
Inefficient bookkeeping at the company
Big account delaying payment beyond a promised date
Opportunities (O)
The company has a great chance of expanding their business.
Competitors might not have high quality products specializing in corn seeds
like the Caseres
Threats (T)
Competitors in the business
Unstable price of the product
Taxes in products
Unstable weather conditions

Caceres Semilla S.A. de C.V.

Pro forma Income Statements FY2000

FY1999
Net sales
Cost of goods sold
Gross profit
Depreciation
Procession & storing
exp.
Selling & delivery exp.
General & admin. exp.
Profits before taxes
Income taxes
Profits after taxes

April

May

June

July

Aug.

20,538
12,198
8,340

1,680
1,008
672

1,260
756
504

1,260
756
504

1,680
1,008
672

1,680
1,008
672

2,400
1,440
960

378

31

31

31

32

32

32

2,454
2,598
1,818
1,092
378
714

150
216
151
124
96
28

150
162
158
3

204
162
185
(78)

288
216
200
(64)

396
312
202
18

(78)

204
216
199
21
110
(89)

(64)

18

Dividends

Sep.

Mar.

120

Oct.

Nov.

120

Dec.

3,300
1,980
1,320

3,000
1,800
1,200

1,320
792
528

2,100
1,260
840

3,000
1,800
1,200

2,520
1,512
1,008

25,200
15,120
10,080

FY2000
Common
Size
100%
60%
40%

32
360
432
201
295
110
185

33
156
390
192
429

33
252
174
175
(106)

34
300
390
171
305

35
240
330
164
239

429

(106)

34
360
276
174
(4)
110
(114)

305

239

390
3,060
3,276
2,172
1,182
426
756

2%
12%
13%
9%
5%
2%
3%

240

1%

120

Jan.

Feb.

FY2000

Caceres Semilla S.A. de C.V.

Pro forma Balance Sheets for FY2000

FY1999
Cash
Accounts receivable
Inventories
Total Current
Assets

Mar.

April

May

June

July

Aug.

138
2,106
3,408

200
1,626
5,877

200
1,206
6,888

200
1,206
7,434

200
1,626
7,728

200
1,626
7,557

200
2,346
6,954

5,652

7,703

8,294

8,840

9,554

9,383

9,500

4,404
654
10,710

4,385
654
12,742

4,366
654
13,314

4,479
654
13,973

4,459
660
14,673

4,439
660
14,482

4,419
670
14,589

Accounts payable
Accruals
Current portion, LTD
Bank
loan
Total Current
Liabilities

2,202
1,176
120

4,713
1,059
120

4,794
954
120

2,619
1,059
120

2,154
1,164
120

1,68 9
1,326
120

1,224
1,723
120

900

510

1,103

3,910

5,239

5,415

5,572

4,398

6,402

6,971

7,708

8,677

8,550

8,639

Long-term debt
Common stock
Paid-in capital
Retained earnings
Total Liabilities. &
Equity

1,440
192
534
4,146

1,440
192
534
4,174

1,440
192
534
4,177

1,440
192
534
4,099

1,380
192
534
3,890

1,380
192
534
3,826

1,380
192
534
3,844

10,710

12,742

13,314

13,973

14,673

14,482

14,589

Net fixed assets

Other assets
Total Assets

Sep.

Oct.

Nov.

Dec.

Jan.

Feb.

200
3,246
5,811
9,257

200
2,946
4,848
7,994

200
1,266
4,893
6,359

200
2,046
4,935
7,181

200
2,946
4,437
7,583

200
2,466
4,692
7,358

4,399
670
14,326

4,498
680
13,172

4,597
680
11,636

4,695
680
12,556

4,793
680
13,056

4,770
680
12,808

759
1,885
120
5,427
8,191

387
1,408
120
4,693
6,608

852
1,176
120
3,030
5,178

1,689
1,583
120
3,000
6,392

2,154
1,688
120
2,625
6,587

2,619
1,455
120
1,906
6,100

1,380
192
534
4,029
14,326

1,380
192
534
4,458
13,172

1,380
192
534
4,352
11,636

1,320
192
534
4,118
12,556

1,320
192
534
4,423
13,056

1,320
192
534
4,662
12,808

FY2000

200
2,466
4,692
7,358
0
4,770
680
12,808
0
2,619
1,455
120
1,906
6,100
0
1,320
192
534
4,662
12,808

FY2000
Common
Size
2%
19%
37%
57%
37%
5%
100%
20%
11%
1%
15%
48%
10%
1%
4%
36%
100%

Stragetic Financial Management

FIN 9

CASE STUDY

Caceres Semilla S.A. de C.V.

Submitted by:
Joyce Anne M. Renacido
BSBA Fin IV-6

Submitted to:
Mr. Seballe