Kasinthula Cane Growers Limited
Kasinthula Cane Growers' financial position is precarious. While sales have increased year over year and gross margin is strong, they posted net losses in 2006 and 2007, liabilities have exceeded assets for these three years, and they have no equity. Their current financing is creating the problem: interest expense has taken them from operating profit to net loss in 2006 and 2007, and caused them to barely break even in 2005. For this business to survive and become sustainable they must find a lower-cost way to finance the business. Without the serious debt payment issues detailed above, this would be a profitable enterprise.