Financial Risk, Goals, and Performance Monitoring for Lupton: A Case Study

Mock Exam

TABLE OF CONTENTS
QUESTION 1...................................................................................................................................3
1. Possible internal and external financial risk to Lupton...........................................................3
2. Suggesting two new corporate financial goals for Lupton......................................................3
3. Measuring corporate financial goals and performance monitoring........................................4
QUESTION 2...................................................................................................................................4
1. Working capital management and improving it in future.......................................................4
2. Short term finance to be considered along with advantages and disadvantages.....................5
3. Report for shareholders relating to financial health and viability...........................................6
REFERENCES................................................................................................................................8

QUESTION 1
1. Possible internal and external financial risk to Lupton
By evaluating the case study of Lupton it is clear that there are many different risk which
is being faced by the company. the external risk which the company is facing is the advent that is
development of technology (Ślusarczyk and Grondys, 2019). This is the major risk because of
the reason that in case company will not be using the latest technology then this will be affecting
the working efficiency of the business.
Another internal risk faced by Lupton was that within the time frame of 1999- 2005 the
employees within the managerial and technical department left the company. This was not at all
good for business because now they have to hire new employees and again provide them training
to work.
Along with this, another internal risk is that the management of company operations is in
hand of single person only. This can also cause some of the issues relating to the management
because a single person cannot manage the working in better and effective manner.
Further with the signing of the agreement another risk being faced is that they will have to pay
100000 Euro as annual licencing fee. This will result in heavy expense and can affect the
profitability of business.
Along with this another external risk is that the company might face after the agreement
is that company has invested more in large machinery and there might be possible that the trend
changes (Oláh and et.al., 2019). Thus, this will result in loss for the company as the coffee
making machine will not be beneficial.
2. Suggesting two new corporate financial goals for Lupton
The financial goal for Lupton CMC are as follows-
 To increase the sales of the new product by 50% so that good profits can be earned.
 To increase the profits of company by 32% so that the commission can be paid to Somex
and then also profit is earned.
For translating these objectives to effective financial strategy the company must focus on
having less expenses. This is particularly because of the reason that in case the expenses will be
high then this will result in decline in profits (Сосновська and Житар, 2018). Thus, when the
strategy of Lupton will be focusing on reducing expenses then automatically the profit will