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Financial Institutions and Financial intermediation

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Scenario:

You are a financial analyst in the finance division of Strident Marks, a manufacturing company that has recently gone through the initial public offering (IPO) process and has become a public company. Strident Marks has annual sales revenue of approximately $50 million and makes seven unique and distinct products (which serve seven different markets). Each product is represented by its own division within the company and has its own group of sales, marketing, and manufacturing personnel. Some departments, including human resources and the finance division, support the entire organization. Operations consist of a single headquarters and production (manufacturing) center.

In your role as financial analyst you are responsible for compiling and reporting on budget / forecast data, for assisting your investor relations department, and for assessing and valuing new business opportunities (which will ultimately be presented to upper management). You report directly to the Chief Financial Officer (CFO) and have the use of the accounting department's staff accountants to assist you with your budget / forecast responsibilities.

You have been informed by the CFO that Strident Marks will be aggressively pursuing new business opportunities, which may include expansion through acquisition and the development and implementation of new products. As a publicly traded company, Strident Marks is scrutinized by bankers and investors as never before. In fulfilling your responsibilities you must keep this in mind, and you must instill a new sense of financial discipline in the organization.

Task Type: Discussion Board

What role(s) do financial institutions play in financial intermediation, why these roles are necessary, and how does the company needs to respond to the increased intermediation scrutiny due to the company IPO?

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Solution Summary

What role(s) do financial institutions play in financial intermediation.

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Financial institutions bridge the gap between the investors in the company by bringing them together, structuring the whole process for making a private company a public one and bringing in front of the investors and providing necessary ...

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