Business Case Studies & Business Publications

Shenandoah Outfitters

Lipson, Marc L.

Case

Shenandoah Outfitters

Lipson, Marc L.

F-2154 | Published April 17, 2026 | 5 Pages Case

Collection: Darden School of Business

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A small chain of retail stores selling outdoors equipment, Shenandoah Outfitters is expanding rapidly. The finance manager has to develop a financial plan for accommodating this growth and the investments it requires. Analysis reveals that the business is growing faster than can be financed from internal sources–-Shenandoah has been increasing the amount of its long-term loan and has just ended the year with a higher-than-usual balance on its bank line of credit. The operations and financing of this business are relatively simple, so students can focus on core skills. As such, this case is appropriate for all degree and nondegree programs. At the University of Virginia Darden School of Business, it has been used as an introduction to financial forecasting. It works best after an introduction to financial ratios, but it can also be used to build familiarity with those ratios. It has also been used successfully as a vehicle for contrasting the cash flow statement (an accounting view) with a free cash flow calculation (a valuation view). In general, the role of the case is to tie finance principals to accounting data.

The case can be used to pursue the following objectives: (1) Introduce students to financial statement forecasting using operating ratios, simple T-account logic, and “plugging” the financial gap with debt. (2) Explore the link between operating and financing decisions. (3) Identify the circularity that exists in a financial statement forecast when interest expense is tied to forecast borrowings and how that might be handled. (4) Build understanding of distinction between long-term and short-term (seasonal) financing. (5) Introduce the cash flow statement as well as business-level free cash flow.