Strategy of Sweetco Inc Case Study Example | Topics and Well Written Essays - 1250 words - 1

Strategy of Sweetco Inc - Case Study Example Apart from this, another fact was also revealed that Sweetco received money from its holding company for its operational functions on the basis of loans. This is the reason why the CFO has asked for an extension in the credit terms to 60 days. The objective is now to analyze the financial credibility of Sweetco at present and make a future projection so that we can decide whether to maintain the business relationship or not. The best option in such a case is to ascertain credit scores of the company Sweetco Inc. Assigning credit scores means defining certain factors for making decisions and allotting weight age on each factor. For example, 30 percent weight age for the payment history of the customer, 30 percent weight age to the amount of money outstanding, 15 percent weight on the length of the credit history, 10 percent weight on the newly generated credits, and 10 percent on the different types of loans being offered to the customer, i.e. Sweetco Inc. For this purpose the marketi ng contacts would be utilized; the investigation of credit shall be done through reliable sources; the customer of Sweetco Inc. can be contacted for information on the company’s status; the documents and financial statements can be filled based on the information acquired from different sources; the credit file for Sweetco. Inc. should be prepared; and finally a wholesome financial analysis is untaken. Hardline Position: The hardline position involves an extreme decision. In this case the decision would be that the company should not continue the business with Sweetco Inc and increasing the credit terms does not comes into play in this case. If the credit scores and the financial analysis show that Sweetco Inc. neither has the ability to pay back the money nor would be able to attain sustainability without the help of its holding company or any other financial support.