Case | HBS Case Collection | August 2010

Flash Memory, Inc.

by William E. Fruhan and Craig Stephenson

Abstract

The CFO of Flash Memory, Inc. prepares the company's investing and financing plans for the next three years. Flash Memory is a small firm that specializes in the design and manufacture of solid state drives (SSDs) and memory modules for the computer and electronics industries. The company invests aggressively in research and development of new products to stay ahead of the competition. Increased working capital requirements force the CFO to consider alternatives for additional financing. In addition, he must also consider an investment opportunity in a new product line that has the potential to be extremely profitable. Students must prepare financial forecasts, calculate the weighted average cost of capital (WACC), estimate cash flows, and evaluate financing alternatives. This case is especially recommended as a final exam case for a standard MBA-level course in corporate finance.

Keywords: Cash flow; Forecasting; capital budgeting; Financial Management; Cash Flow; Forecasting and Prediction; Capital Budgeting; Computer Industry; Electronics Industry; United States;

Citation:

Fruhan, William E., and Craig Stephenson. "Flash Memory, Inc." Harvard Business School Brief Case 104-230, August 2010.