7. What other advice do you have for Randall and Hubbard?
-Review credit policy and determine the current collectability of receivables.
-Improve inventory management and forecast procedures.
-Establish a ceiling for plant and equipment purchases. Require ROA for approval of new equipment purchases.
-Use EVA for the approval of new projects. Consider reducing the required 15%ROA. More than 12% ROA is enough to cover the cost of debt.
-Implement the proposed balanced scorecards.