Miniscribe
Executive Summary
Miniscribe Corporation founded in Longmont, Colorado in 1980, was a manufacturer of disk storage products. They eventually became a major player when it won a series of contracts to supply IBM’s PC division. Their rapid growth led to an initial public offering in late 1983, opening for a trading in January 1983. Years after their success in the industry, their internal inventory count showed that there was a shortfall of between $2 and $4 million. The purpose of the report is to come up with a decision if Alexander and Ferris Brokerage Firm should continue to retain Miniscribe on its ‘Buy’ recommendation list. A research analyst was tasked by his manager to investigate Miniscribe’s financial position and performance by using the available financial and qualitative information.
Using the unaudited interim financial statements, the group prepared the statement of cash flows to determine if the company has still enough cash to continue its operation. They also calculated the company’s financial ratios to extract more quantitative information and compared to other disk drive manufacturers industry.
After conducting and examining all of the Miniscribe’s information, the group recommended that Miniscribe must be removed from Alexander and Ferris’ ‘Buy’ recommendation list. The firm’s incompetence and profitability issues and other problematic factors led the group to question the firm’s ability to continue it’s operation.