Financial Forecast

India is currently the world’s second most populated nation. In 1989, there were about half a billion females, who in total would demand about 12 billion yards of fabric. Sengupta has a large potential for growth within its sector of the textile market.

Textiles are the largest manufacturing sector in India. It is the second largest sector of employment following agriculture. The majority of the textiles are made of cotton. They are usually made on a small scale of production. Sengupta has their only plant in Kota, India. As a small-scale company, Sengupta supplies yarns to the decentralized sector that makes up 70 % of the textile industry.

The yarn produced is distributed to local merchants throughout the country. Due to previously poor road conditions, Sengupta has two warehouses to increase delivery efficiency. Earlier, delivery was a complicated task because of unpaved roads and crowding. India’s transportation authority has made increased efforts in paving roads and increasing highways. The new road between Kota and the New Delhi has increased delivery reliability. This effort has helped Sengupta deliver goods faster and more eff

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me to no surprise that the company’s cash count would also be more lucrative. Additionally, the free space in the warehouse may be used for more beneficial means. Moreover, since the Raw Materials will be lower, the Cost of Goods Sold will also decrease by the same amount, causing the Gross Profits to increase. This is another advantage that will be shown on their financial statements. Sengupta’s liquidity is best increased by a decrease in excess inventories. This decrease in stockpile inventory will help cut discretionary fixed costs. Management has a choice on whether these costs should be incurred during a short period of time. These discretionary costs can be eliminated temporarily without seriously impairing the long-term goals of the organization. For example they can lay off some of our stock workers since they don’t need as much to workers to load and unload the raw materials. As a result of this Sengupta will have a more stable amount of inventory and our operation will run more efficiently. Memo 3 The third memo received by Mrs. Sharma is from the Purchasing Agent, Mr. R. Mohan. This course of action will reduce the inventory of pellets (35% of raw materials) from 60 days outstanding to only 2 or 3 days.
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Approximate Word count = 2691
Approximate Pages = 11 (250 words per page)

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