Widget Manufacturing Company

Babson Professor Len Green, Case Director

Sheryl Overlan, Case Writer

Arthur M. Blank Center for Entrepreneurship,

© Babson College, 2001.

Abstract

The president of a fictional fifty-year-old manufacturing company plans to retire soon and wishes to sell his company to one of the company's vice-presidents. Aware of the owner's intention to retire soon, they are in the process of appraising the company's financial situation in order to be prepared to buy the company if the offer is forthcoming. Two of the three vice-presidents are also the president's children. As a tool to help the president decide which vice-president would make the best new owner, the president challenges them to provide recommendations on where to spend excess cash in the coming year. He provides them with limited financial information about the company and the three vice-presidents are faced with two questions: Where should the money be spent and what is the company worth? Students are asked to analyze the financial information provided and make a recommendation on who should be the successor, how the money should be spent, and what additional information would they ask for before assuming ownership if it is offered.

Location of the company: N/A

Years spanned by the case: N/A

Industry segments: Manufacturing

Stage of the company: Mature

Age of the entrepreneurs: N/A

Key Words: Family business, succession, financial analysis, valuation

DVD

There is no DVD available for this case.

Teaching Notes

A seven page case teaching package, written by Len Green, is available for this case. The teaching package includes strategies for case presentation, key concepts, solutions to the assignment questions in the case, and suggestions for the most effective ways to work this case into a course.