Finance Case - Kayang Meat Shop

Introduction

Mr. Romulo “Sonny” M. Gutierrez, who was a graduate of mechanical engineering turned out to continue the simple family business into a million-peso-earning Kayang Meat Shop. He took over the business with more complex operation and much time. He established outlets around Makati and Edsa Central Market. He expanded his business by loaning million of pesos from bank. His wife, Teresita who was a graduate of accounting takes care of the finances. Sonny wanted to go into meat processing, supplying processors like the Republic Flour Mills and Jollibee and also supplying meats to supermarkets because of the rising prices for imported pork and by now Filipinos prefer to buy meat from supermarket rather than wet markets. Because of the continuing expansion of Kayang Meat Shop outside Manila like Pangasinan it received government grant of land under the the condition that the operator must develop property and provides the factory. Aside from this government grant, the company still need a large amount of money that will finance its new slaughterhouse construction. There’s a great potential in Baguio, Pangasinan, and La Union that estimatedly in its full capacity of slaughterhouse, can butcher 300 heads per day, twice its operating capacity at present.

II. Statement of the Problem

Kayang Meat Shop has its great stand in the market having great earnings and many outlets. As the company’s growing and expanding its influence to the market, the company also need financial supports to be successfully more productive in terms of their number of outputs that will be produce and for the company to dominate the market and have specific control over it. This is where now the conflict arises, as Kayang Meat Shop a sole proprietorship form of business, owned by Mr. Romulo “Sonny” M. Gutierrez, it is characterized by limited resources and unlimited liabilities. It has limited resources in the sense that its expansion depends from its loans from banking institutions and government grants and it has unlimited liabilities from banks and other financial institutions. Having the potential to expand, develop and improve its outlets outside Manila, Kayang Meat shop’s now facing a difficulty for financial resource that will support its growth.

III.