Sonnedix Solar Solutions: An Earnings and Cash Flow Conundrum Harvard Case Solution & Analysis

Sonnedix Solar Solutions: An Earnings and Cash Flow Conundrum Case Study Solution

A similar methodology was used for the analysis of revenue from previous months. So that I could prepare a monthly Income Statement, I divided the $41500 in operating expenses by 12 months to obtain $3458, the same amount for each month. The difference between sales and operational costs is $12,836,162. Forty dollars was collected in January fees, including tariffs and subsidies. Furthermore, I calculated a total net income of $12,836,162 by adding this number to the EBIT for the first month (January). The same procedure was used to get the monthly net profit total every month.

Current assets in the monthly balance sheet totaled $12,752,820, which was calculated using data from the cash flow statement. Next, the fixed assets totaling 2,689,9142 were 80% financed by debt and 20% financed by equity. The sum of $12,836,162 is the amount of retained earnings that went into determining the net profit. In addition, all assets and liabilities in January amounted to a total of 39,735,304(Whitfield, 2020).

Change in Forecast Financials

The semi-annual model of 20 years Grasse project indicates that the Grass project has long-term benefits that play an important role to develop the efficient and strong economic health of the corporation. The project can generate a significant profit that allows the company to achieve a strong economic position in the market. However the project will generate a profit for around 11 years and the forecast results of the above 2 financial statements show that the net profit will touch the uppermost peak figure in year 11 throughout 20 years of operations afterward the profits will have a steady decline, while the slow and gradual decline in the profit shows that the interruption of new entrants/rivals in the market and the market share misrepresentation.

However, if we take a broader view and anticipate a few adjustments which include that Sonnedix is attempting to begin to venture Grasse from October, let’s say Sonnedix commences this venture in can also add it could be stated that primarily based totally at the Irradiation statistics from distinctive locations, especially from France wherein Sonnedix will adopt venture Grasse it could be anticipated that earnings will boom substantially if we check Irradiation statistics on Grasse France we can see that Sun will produce strength of 5903 W/m rectangular that's extra than the strengthen.

According to the unit region produced via way of means of the solar withinside the shape electromagnetic radiation to be able to permit Sonnedix to generate greater earnings from such technology of strength due to the fact in comparison to the irradiation statistics in October, it's far decrease than in May some other issue to be able to contributewithinside the greater strength technology is the widespread alternate in weather in May the climate stays warm throughout May. The irradiation in May will be better than the normal radiation which is primarily assumed by Sonnedix’s CEO which was around 4849 W/m square while the financial forecasts are based on this normal/average data of irradiation, In case we upsurge mentioned average rate power per unit area then the incomes and forecasted profits will assuredly increase that allows the company to achieve the core objectives of the business and have a beneficial imp[act on the economic health of shareholders (Heubl, 2020).


Based on discounted cash flow (DCF) studies, the business ought to go on with the development of the solar plant project. Both the word "Starting" and the phrase "Construction Expenditures Incurred at the Beginning of a Project" are examples of potential definitions of the term "Implementation." A thorough analysis may reveal a positive Net Present Value of 340,169,633 but this number still takes into account how much money will need to be borrowed. Because the net present value (NPV) would be positive in any scenario, the discounted cash flow analysis proves that the company should invest in the business. This indicates that the effort would not only be financially successful but will also attract new clients.

In addition, by investing in the project the company can achieve a strong financial status in the current market which the company allows the market to retain high profitability. The positive NPV indicates that the company will achieve a profitable market by investing in the project while it will be helpful for the company to increase the efficiency of its own as well as its shareholder's market worth across the globe (Fthenakis, 2020).


Sonedix is a company of solar energy producers that has a strong and expanded market in Europe. The company has an influential brand legacy due to which most of the customers across the EU purchase the solar products of the company. However, the company’s main strength is the mix of marketing strategies and the top skill full and professional Board of directors that enable the company to achieve the core objective of its business.

The acquisition and partnership strategies in the market allow the company to expand its business not only in the EU but in Asian countries as well. The company is going to invest in two biggest projects in Asia although the financial statement shows that the company will have a positive NPV in these investments that allow the company to achieve a sustainable business that retains profitability in the market as well as have a significant impact on the current market of the company as well.Furthermore, the company has done various acquisitions and had joint ventures in France and other countries that enable the company to sustain the growth rate of the business (Eberhard, 2017)......................

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