Identify the problem in financial terms
There were dangers associated in timber trading; the most important of these were bad loans. The dealer was accountable for paying the mill irrespective of whether the customer paid in due time, late or not. The customer refused to pay; the subsequent failure could make the dealer unsustainable. The dealer was also responsible for generating the quantity and quality of the commodity indicated on time. Purchasing off-grade timber or getting late deliveries may harm relationships with customers and affect collection of receivables.
Diagnose the cause(s) by identifying specific business practices or situations that created or caused the problem
Lifestyle factors may have an adverse impact on the timber supply. Spruce budworm destruction and the unpopular forest pesticide system had harmed the forestry industry's public image and the income of individual firms. In contrast, sawmills understood the need for emissions control, and the expense of such would be transferred on to customers. This will place more strain on the margins of timber dealers, which could result in some customers negotiating directly with mills to reduce costs.
Prescribe possible alternatives
When these financial losses arise, there are things that you can do to help solve those difficulties and maintain your market place.
Recommend a plan of action (decision/implementation) along with proposed financial metrics (ratios/measures) which would define improvement success
For a long time, financial metrics were the standard for evaluating the success of a company. The balanced scorecard supports finance's role in defining and tracking clear and measurable strategic financial targets on a structured, synchronized basis, thereby allowing the firm to function effectively and efficiently. Financial goals and metrics are defined on the basis of a "best-in-industry" benchmarking and include:
State the importance and relevance of the case to the study of business Case studies can be highly useful, considering that they offer guidance and act as a reference guide for potential problems. It is something of a contingency plan, providing an action plan should you encounter a similar situation in your business.
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All About Financial Management in Business. (n.d.). Retrieved May 04, 2020, from https://managementhelp.org/businessfinance/index.htm
MSG Management&nbsp;&nbsp;Study&nbsp;&nbsp;Guide. (n.d.). Retrieved May 04, 2020, from https://www.managementstudyguide.com/financial-management.htm