Free Essay About The Objectives Of Denver Properties
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Strategic and Financial Planning for Property Manager - 1st topic. Interacting with the Board or Owners of the Company, 2nd topic Budgeting
The company’s main objective is to ensure that the livelihoods of its employees have improved even when they have retired.
The company will be the base for income to the employees and the family members.
The company will help its employees to overcome financial problems through encouraging the members to spend less and engage in savings.
Dallas properties articulate to gain more interest from the market to help in financing its programs.
123 Denver way property wants to replace a building that is costing $15,250,000, the corporation is relying on one source of revenue, which is the insurance. The current amount given by the insurance company is $13,000,000. 123 Denver way properties will have to look for the remainder and top up to complete the building. The call for replacement of the building is alarming and requires the corporation to take quick measures. The corporation requires putting up the building to reduce the costs. The insurance companies need to provide for other options to raise enough money to build the building (Mittra & Sahu 37).
It is a recommendation that the cooperation continue with its plans for making another building. There are many of other ways of raising enough money for building other than the insurance company. It is definite that the building will be useful in generating more money. Therefore, the amount invested in the building will be recovered from the activities conducted in the building. Comparing the amount required for building and that for rent, the cost of building is cheaper than renting. The cooperation must look for all ways possible to build. The company has another option of borrowing money from the bank to use it in building. 123 Denver way property needs to have a comprehensive building strategy to make their plans better (Meigs & Robert 188).
The corporation does not have sufficient cash flow to have a sustainable running. Most of what the corporation’s earning is going to servicing their recurring costs. The opening cash balance for each month is $500,000 plus the $300000 from the rental income. In the six months that have been analyzed, it is only the month of January that the corporation has been able to balance their cash outflow and the inflow. The other months have been way below the balance, with each going lower than the next. The raising imbalance is brought about by the high cost of rent coupled by the high installments that are paid for the mortgage. There is however some additional issues that the board should look into to ensure everything run well.
The specific issues the Board should resolve are:
The total asset value of Seattle Properties is $25,000,000, but the owners’ equity is $18,000,000. This means that the corporation has to improve the asset in all ways so that it can fetch a higher equity value that the anticipated $18,000,000 in value. For this improvement t to happen there has to be an investment in the buildings and the asset that the corporation owns.
The board must ensure there is availability of resources that are vital in bring in cash that is used to maintain the day to day running of the organization. In addition, to meet the monthly financial obligations of the corporation (Meigs & Robert 188).
The board has to look at the salaries of the corporation and then see if it is possible to have a salary review. Buy reviewing the salaries, and then but to do this, they will lower the cash outflow will reduce and this way they will have a better balance of their cash flow.
The renegotiation, the corporation needs to conduct, must be ideal though they have to renegotiated the terms once before. The mortgage payment, which is made monthly by the corporation consisting of $75,000 in interest and $10,000 in principal payments was the initial plan. The total value of the payment went to about $85,000 monthly, and that was the month of January. The next mortgages, which get renegotiated in February and interest charges, are $55,000 and principal $15,000. However, the next most probable thing, that the board should renegotiate, must be that one that fits the budget more accurately. To do the renegotiation, and then there has to be a way that the corporation delays the payments of the installments. The best way, to delay is to make it possible to have the corporation pay it for a longer time than the one that is shown in the deal. The future project, that corporation is into will have started to bring in cash and hence servicing the recurrent expenses will be much easier than it has been. The company that is in the verge of prosperity must ensure that the recurrent expenditure reduces while the income of the corporation increases (Meigs & Robert 188).
Anandi Sid Mittra, Robert Sahu. "Practicing Financial Planning for Professionals" (Practitioners' Edition), 10th Edition. Rochester Hills Publishing, Inc. 2007. Print.
Meigs, Walter and Robert “Financial Accounting,” 4th ed. Pg. 187-188. McGraw-Hill Book Company, 1970. Print.
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