Query No.1: basic financing strategy between 2000 and 2005: Though the Company's cash/reserve position is quite healthy, but, the management of the same is not quite in tune with the modern financial strategies. Number 1 there is a huge pile up of inventories. Number 2. Receivable are at teh higher end. Number 3. Investment are quite substantial which in other way could have been pruned enabling investment in its own ventures/technology upgradation.etc and No.4 Debt option has not been leveraged to the optimum.
QUERY NO.2: RAtionale of the Fianancing Policy: The rationale as perceived from the financials has been to"Adopt a very conservative, 100% risk free approach to financing options" which policy is devoid of pragmatic solutions thereby curbing agressive technological innovations leading to the competitors eating away into the company's market share.
QUERY NO.3: Future CApital Investment: The Company while pursuing its risk-free-low debt policy should perceive Debt as a catalyst to galvanise the almost redunadant investments,i.e., by raising debt marginally (Say upt0 10% of the accumulated investments) and offload 30% of its investments). The company should paralelly improve its inventories which are a huge pile up on the cost of finance. Added with a rigorous and aggressive receivable management, the cost is drastically reduced which can be leveraged to service the debt as well as offset the loss of income from investment ploughed back to finance future investments.
