Go Back
Case Title Massey Ferguson Ltd. 1980 Price   $75
Solution ID 1077
Case ID 282043

Proforma Balance Sheet (US.$ millions)Year Ended October 31, 1981 - 1985

Proforma Income Statement (US.$ millions) Year Ended October 31, 1981 - 1985

Analysis of Sales

Compound Growth Rate

New Shares Issue

New Preferred Shares Issue

Total no of preferred Shares

Dividend per year


Massey- Ferguson Limited, a multinational manufacturer of diesel engines, farm and industrial machinery. By 1980, Massey was the largest supplier of diesel engines and west’s largest producer of farm tractor. Between 1960 and 1970, Massey had a plan to expand operations and acquire assets through short term debt financing. By 1978, Massey stood at 214% of debt to equity ratio. In the same year, Massey reported an unprecedented year end loss of U.S. $262.2 million. Furthermore, high interest rate along with reduced sales in coming years aggravated the situation and by the end of 1980 the debt to equity ratio raised to 464%. All these circumstances lead Massey-Ferguson into financial crises.

No of Words 1222
Questions Covered

1. Assess the product- market and financial strategy Massey pursued throughout 1976.How does Massey differ from its competitors?

2. As a financial advisor to Massey's management, what refinancing plan would youpropose? Be specific - Hint: Use Proforma financial statements to make sure yourproposed plan is viable.

3. How does the plan affect various interested parties: shareholders, lenders, employees,governments and management?

4. Why, fundamentally, did Massey get into financial trouble?

Keywords Bankruptcy,Financial planning, Financial strategy, Machinery, Recapitalization, Short term financing
Status Available


Download Solution in 2 Minutes

Secure Online Payments and Credit Card Processing by Plimus

Massey Ferguson Ltd. 1980 - HBS Case Solutions, Assignment Help, Essay Writing, Research Reports, Dissertations, Custom Essay Writing, Online Homework Help

Disclaimer: The services provided are meant to assist the buyer by providing a guideline, and that the product provided is intended to be used for research or study purposes.