Investment Strategy Report: Missouri Can Company Financial Analysis

This report analyzes the financial situation of the Missouri Can Company (MCC), which faces declining income across its four business sectors: Financial Services, Energy, Packaging, and Forest Products. The analysis focuses on a ten-year plan, evaluating the potential for diversification and asset sales to generate revenue. The report provides detailed recommendations for each sector, including Net Present Value (NPV) calculations to assess investment viability. Financial Services and Energy are identified as promising sectors with positive NPVs, while Packaging and Forest Products show declining revenue. The recommendations emphasize focusing on the profitable sectors and strategically divesting from underperforming ones. The report also discusses the uncertainties and events that could impact the implementation of these recommendations, such as high capital investments, negative cash flow, and the time horizon required for certain sectors to become profitable. The overall strategy aims to improve MCC's financial performance and achieve sustainable growth through strategic investment and asset management.

Running head: BUSINESS
Business
Name of the Student:
Name of the University:
Authors Note:

1BUSINESS
Table of Contents
1. Describing the situation facing Missouri Can Company (MCC):..........................................2
2. Listing the specific recommendations for the firm in details:................................................2
3. Discussing the events or uncertainties that are most likely to cause trouble in the
implementation of the recommendations:..................................................................................7

2BUSINESS
1. Describing the situation facing Missouri Can Company (MCC):
Missouri Can Company is mainly facing dire situation, where relevant income of the
organisation has been declining. However, the organisations have mainly developed a
different consensus, which code directly help in improving its accumulation capacity and
generate higher income. The company currently focuses on 4 different sections of businesses,
which could directly allow high accumulation of Assets and generate relevant revenue.
Financial Services, Energy, Packaging, and Forest products are the main section, which could
directly allow the organisation to generator relevant profitability from operations. The
company's main focus is a minimum 10 year plan where relevant income needs to be
evaluated and identified for all the four section of the business. Hence, from the evaluation of
the case study it could be understood that diversification of the overall Missouri Can
Company could eventually allow the organisation to segregate its operations and generate
higher returns. Moreover, the company also aims in realising 600 to 700 million from the sale
of properties or assets that has been acquired by the organisation. This could eventually help
growing 10% per year on an overall basis.
2. Listing the specific recommendations for the firm in details:
Financial Services
Cost of capital 10%
Year Investment Cash Inflow Cumulative cash flow
1 250,000
,000
(250,000
,000)
(250,000,000)
2 250,000
,000
(250,000
,000)
(500,000,000)

3BUSINESS
3 250,000
,000
(250,000
,000)
(750,000,000)
4 250,000
,000
(50,000
,000)
(800,000,000)
5 300,000
,000
(50,000
,000)
(850,000,000)
6 300,000
,000
200,00
0,000
(650,000,000)
7 300,000
,000
200,00
0,000
(450,000,000)
8 100,000
,000
300,00
0,000
(150,000,000)
9 100,000
,000
300,00
0,000
150,000,000
10 100,000
,000
1,300,00
0,000
1,450,000,000
10 1,000,00
0,000
NPV $297,004,448.82
Energy
Cost of capital 10%
Year Investment Cash Inflow Total Cash
flow
Cumulative
cash flow

4BUSINESS
1 400,0
00,000
(400,000
,000)
(400,0
00,000)
2 400,0
00,000
(400,000
,000)
(800,0
00,000)
3 400,0
00,000
(400,000
,000)
(1,200,0
00,000)
4 400,0
00,000
(400,000
,000)
(1,600,0
00,000)
5 400,0
00,000
(400,000
,000)
(2,000,0
00,000)
6 400,0
00,000
2,000,
000,000
1,600,000
,000
(400,0
00,000)
7 150,
000,000
150,000
,000
(250,0
00,000)
8 150,
000,000
150,000
,000
(100,0
00,000)
9 150,
000,000
150,000
,000
50,
000,000
10 150,
000,000
150,000
,000
200,
000,000
NPV (344,7
60,459)
Packaging

5BUSINESS
Cost of capital 10%
Year Cash Inflow Cumulative cash flow
1 230,000
,000
230,000,000
2 115,000
,000
345,000,000
3 57,50
0,000
402,500,000
4 28,75
0,000
431,250,000
5
-
431,250,000
6 (100,000,
000)
331,250,000
7 (120,000,
000)
211,250,000
8 (144,000,
000)
67,250,000
9 (172,800,
000)
(105,550,000)
10 (207,360,
000)
(312,910,000)
NPV 28,53
5,714

6BUSINESS
Forest Product
Cost of capital 10%
Year Cash Inflow Cumulative cash flow
1 50,00
0,000
50,000,000
2 50,00
0,000
100,000,000
3 50,00
0,000
150,000,000
4 50,00
0,000
200,000,000
5 50,00
0,000
250,000,000
6 (100,000,
000)
150,000,000
7 (100,000,
000)
50,000,000
8 (100,000,
000)
(50,000,000)
9 (125,000,
000)
(175,000,000)
10 (125,000,
000)
(300,000,000)
NPV (66,079,

7BUSINESS
718)
3. Discussing the events or uncertainties that are most likely to cause trouble in the
implementation of the recommendations:
The evaluation directly indicates that Overall profitability of the organisation is
mainly from operations of financial services and energy, which has a relevant increment
unaccounted income in future. However, the packaging and Forest products have relevant
declining revenue, which could hamper profitability in your future. Hence, the overall
organisation could directly focus operations on energy and financial services, which is
providing a higher return from investment. In addition the financial services have lower
investments. From the evaluation that would also be understood that the cost of capital of
10% is directly helping in identifying the relevant investment opportunities that to generate
higher revenue from investment. The overall financial services have a positive NPV, while
the energy sector business has a negative NPV. This is mainly because of the high-end
investments and capital that is needed in energy business. Exploration and the overall
investments and the energy business could eventually decrease the NPV in shorter duration.
However, in the long run energy sector will provide a constant income, which could directly
help in achieving sustainable growth.
The evaluation of the financial services could eventually help in identifying with
relevant income that could be generated in future. However, the calculation of the NPV is
mainly conducted by identifying with element value of business after 10 years. This mean we
helped in calculation of the NPV where adequate valuation of the investments conducted in a
business can be identified. From the evaluation of the investment criteria it could be
identified that financial services could provide a constant income of $300,000,000 in the