Professional Documents
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#ather than a turnaround the 1984 statements seem more oI a desperate attempt to show
improvement and it seems to be a temporary patch up. It might be possible that the
corporation might have negative cash Ilows in Iuture; however their turnaround strategy
and Iew decisions seem to be appropriate, Ior instance shutting down oI Iew
manuIacturing plants and a long term arrangement with Kobe Steel Ltd. Seems to be a
logical decision. Second, the company to emphasize the high technology part oI its
business by targeting Ior Iuture growth the material handling equipment and systems
business acquire new products, technology and equipment seems to be the appropriate
strategy to improve business.
#estructuring and negotiating debt obligations seems to be the right move Ior now
however in the long run the sources oI revenue and proIitability needs to be improved Ior
continuing cash Ilows. Also, temporary tricks such as revising depreciation method and
policy would not help; in Iact it would only increase the Iuture depreciation costs and
maintenance costs.
#educing workIorce might cut expenses however it might have a negative eIIect on their
morale and seems contradictory to their growth strategies. The same is the case with
reduction in # expenses.
The Iuture oI the Iirm also depends on the eIIective implementation oI the right strategy.
The current scenario seems risky and uncertain. We need more inIormation about the
Iirm to predict the Iuture prospects.