Miniscribe Case Study

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A CASE STUDY ON MINISCRIBE CORPORATION July 6, 2012 EXECUTIVE SUMMARY The case subject revolves around MiniScribe, a manufacturer of disk storage products that is under the watch list for rumors directed to the firm’s problems with cash flow and inventory. The objective of the report is to come up with a BUY OR DON’T BUY recommendation for Alexander & Ferris using the available financial and qualitative information. The analysis was conducted by deriving additional information from available financial data and proceeding with an interpretation of the results in light of qualitative information. The group developed decision lists for a BUY or DON’T BUY recommendation and these were compared against relevant factors that…show more content…
Consolidated Statement of Cash Flow, seen above. There's also a drastic increase in Research and Development expense as evidenced in Exhibit 2. Horizontal Analysis - Trend Percentages of the Income Statement above. This shows that MiniScribe has good plans in building new products so they can take the lead in the market. This is also evidenced that due to rapid technological change, the US PC market is going down and MiniScribe responds by planning diversify its product lines to accommodate other market segments, like disk drives for FAX machines, laser printers, and photocopiers. Lastly, Miniscribe shares' price is above industry level when the industry faced a declining shares price. This is evidenced in Exhibit 7. MiniScribe vs. Industry Share Price. Exhibit 7. MiniScribe vs. Industry Share Price Maintaining shares' price to be above the industry level have been brought by dominating the 3 1/2-inch disc drive market, which had expected orders to total 10M, 45% market share and continued effort in developing new products and innovations through investing in research and development. B. Support to take MiniScribe out of the recommendation list VI. DECISION Following the analysis of the current financial situation of MiniScribe against the context of industry trends and the company’s history, the decision is for Alexander & Ferris to pursue a DON’T BUY recommendation. VII. SUPPORT (BASIC JUSTIFICATIONS) MiniScribe and its shares are not

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