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

COMPANY’S 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 company’s
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 Mar. April May June July Aug.

Net sales 20,538 1,680 1,260 1,260 1,680 1,680 2,400

Cost of goods sold 12,198 1,008 756 756 1,008 1,008 1,440
Gross profit 8,340 672 504 504 672 672 960

Depreciation 378 31 31 31 32 32 32
Procession & storing
exp. 2,454 150 150 204 204 288 396
Selling & delivery exp. 2,598 216 162 162 216 216 312
General & admin. exp. 1,818 151 158 185 199 200 202
Profits before taxes 1,092 124 3 (78) 21 (64) 18
Income taxes 378 96 110
Profits after taxes 714 28 3 (78) (89) (64) 18

Dividends 120 120

Sep. Oct. Nov. Dec. Jan. Feb. FY2000 FY2000

Common
Size
3,300 3,000 1,320 2,100 3,000 2,520 25,200 100%
1,980 1,800 792 1,260 1,800 1,512 15,120 60%
1,320 1,200 528 840 1,200 1,008 10,080 40%

32 33 33 34 34 35 390 2%
360 156 252 360 300 240 3,060 12%
432 390 174 276 390 330 3,276 13%
201 192 175 174 171 164 2,172 9%
295 429 (106) (4) 305 239 1,182 5%
110 110 426 2%
185 429 (106) (114) 305 239 756 3%

120 240 1%
 Caceres Semilla S.A. de C.V.
Pro forma Balance Sheets for FY2000

FY1999 Mar. April May June July Aug.

Cash 138 200 200 200 200 200 200

Accounts receivable 2,106 1,626 1,206 1,206 1,626 1,626 2,346
Inventories 3,408 5,877 6,888 7,434 7,728 7,557 6,954
Total Current
Assets 5,652 7,703 8,294 8,840 9,554 9,383 9,500

Net fixed assets 4,404 4,385 4,366 4,479 4,459 4,439 4,419
Other assets 654 654 654 654 660 660 670
Total Assets 10,710 12,742 13,314 13,973 14,673 14,482 14,589

Accounts payable 2,202 4,713 4,794 2,619 2,154 1,68 9 1,224

Accruals 1,176 1,059 954 1,059 1,164 1,326 1,723
Current portion, LTD 120 120 120 120 120 120 120
Bank
loan 900 510 1,103 3,910 5,239 5,415 5,572
Total Current
Liabilities 4,398 6,402 6,971 7,708 8,677 8,550 8,639

Long-term debt 1,440 1,440 1,440 1,440 1,380 1,380 1,380

Common stock 192 192 192 192 192 192 192
Paid-in capital 534 534 534 534 534 534 534
Retained earnings 4,146 4,174 4,177 4,099 3,890 3,826 3,844
Total Liabilities. &
Equity 10,710 12,742 13,314 13,973 14,673 14,482 14,589
Sep. Oct. Nov. Dec. Jan. Feb. FY2000 FY2000
Common
Size
200 200 200 200 200 200 200 2%
3,246 2,946 1,266 2,046 2,946 2,466 2,466 19%
5,811 4,848 4,893 4,935 4,437 4,692 4,692 37%
9,257 7,994 6,359 7,181 7,583 7,358 7,358 57%
0
4,399 4,498 4,597 4,695 4,793 4,770 4,770 37%
670 680 680 680 680 680 680 5%
14,326 13,172 11,636 12,556 13,056 12,808 12,808 100%
0
759 387 852 1,689 2,154 2,619 2,619 20%
1,885 1,408 1,176 1,583 1,688 1,455 1,455 11%
120 120 120 120 120 120 120 1%
5,427 4,693 3,030 3,000 2,625 1,906 1,906 15%
8,191 6,608 5,178 6,392 6,587 6,100 6,100 48%
0
1,380 1,380 1,380 1,320 1,320 1,320 1,320 10%
192 192 192 192 192 192 192 1%
534 534 534 534 534 534 534 4%
4,029 4,458 4,352 4,118 4,423 4,662 4,662 36%
14,326 13,172 11,636 12,556 13,056 12,808 12,808 100%
 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