To assume role of Chris Mell, CMA, and prepare a report for the President and CEO Andrew Mayd. This report will advise him on how to address issues facing organization and items discussed at the management meeting.…
The Dawson Lumber Company was founded in the 1870s by the Dawson family to market the lumber on their land. In 1950, Dawson Lumber owned four small lumber yards in the Corn…
As a financial consultant to Clarkson Lumber, I analyzed four potential scenarios with relatively high probabilities of occurring given Clarkson Lumber’s current situation. The four scenarios analyzed are continued rapid growth of Clarkson Lumber with Suburban Bank as the creditor, slowed growth with Suburban Bank as the creditor, continued rapid growth with Northrup Bank as the creditor, and controlled rapid growth with Northrup bank as the creditor.…
Lawson is a clothing retailer who has recently met with a bank official asking them for a couple of new services from the bank. The first new service that they have requested is a bank loan that would be used to pay down their trade debt. Their current interest rate on the trade debt is 13.5% and the owner of Lawson, Paul MacKay, feels that he can secure a bank loan that would in turn have a lower interest rate. The second new service that they have requested is a line of credit, the line of credit would be used to help, when the sales are down and cash flow is short. Paul feels that a line of credit will ensure that the store will be able to meet their debt obligation with their main trade supplier.…
Due to the amount of equity left for both companies, it would be in the bank 's best interest to negotiate a loan with L.L. Sam 's Company. Considering the amount of capital and assets that M.M. Smith company, totaling $363,000, the bank would be able to return their invest in the event that the company would…
| Both produce almost all of their respective informational reports on a routine monthly basis.…
The Clarkson Lumber Company has been expanding rapidly for several years. Increases in working capital requirements have outgrown the capacity of the firm to generate funds from internal sources. Also, part of the funds were used to buy out a partner, further increasing financial pressure. The firm has foregone taking discounts on accounts payable and is borrowing increasing amounts from the bank so as to maintain its expansion. Mr. Clarkson’s decision today is whether to expand and , if so, how to raise new funds. He is seeking a new bank connection from which he can borrow larger amounts. In turn, the bank must estimate the amount of funds actually needed by Mr. Clarkson, the probable repayment schedule, the nature and degree of the risks incurred and the appropriate terms of such a bank loan.…
Yet, despite the fact that profits were also growing, the company experienced continued cash flow problems. As a result, Riley finds that an increasing amount of his time is being devoted to dealing with the cash flow problems. The company has normally relied on bank loan financing secured by accounts receivable and inventory. However, in 2006 the company was unable to reduce its bank loan during the seasonal slowdown period. Furthermore, the company's manufacturer suppliers were becoming unhappy. Some had even started to demand payment on delivery rather than offer the 2/10, n/30 terms standard in both the manufacturer and wholesaler markets. Riley is not sure what he should do. He expects that 2007 sales will be 30% higher than the prior year and that there will be continued strength in sales in the following years. Furthermore, his co-investor is becoming increasingly bothersome so Riley would like to buy back the 40% ownership in the company that he does not now control.…
Based on my results Mr. Shields’ should accept Mr. Fordham’s proposal for the acquisition of Upstate Canning Company. The $35,000 comes from Mr. Fordham’s savings and the $65,000 additional investment from associates. The $300,000 loan allows for Mr. Shields to have time to pay Mr. Fordham in full. The Bond repayment schedule offered by Mr. Fordham to Shields is additionally an excellent discount for Mr. Shields to choose should he wish to prioritize the ownership goal over the income increasing goal for 5 years, benefitting him in the long run (this depends largely on his personal discount rate).…
The problem currently facing Hampton Machine Tool Company is the ability to payback it 's current loan and the additionally requested loan from the St. Louis National Bank. If Hampton carries forward as planned they will be short $331,500.(Exhibit 1)…
The Udderlie’s need help preparing for a meeting so that they may receive financing from Confederation Bank. These needs include an evaluation of the overall idea, the preparation of the pro forma statements, what collateral options were available and to identify any potential issues that the bank may have. The Udderlie’s have also already done some widespread market research. James has a background in the area and can properly analyze market research. James had concluded that the target market was comprised of mainly employed individuals, so a high price point was feasible.…
UpBeat, Inc. is a successful company located in Greenville South Carolina. Sales have substantially exceeded budgeted amounts and look to get even better. Upon reviewing of the monthly reporting package and cash flow projections it can be noted that the debt to equity ratio has deteriorated, liquidity is tight, and the company is having difficulty keeping current on taxes and on payments to suppliers and employees. In order to meet UpBeat’s debt covenants the local bank has agreed to purchase $50 million of accounts receivables following provisions included in the sale agreement:…
7. What are the implications of Riley’s cash flow for the financing needs of the firm.…
What has been the company’s financial strategy? Why does Mr. Butler have to borrow so much money to support this seemingly profitable business? Has he been managing his company’s cash flow wisely?…
As result of inflation and the acquisition of its competitor, Tri-State Tablet Company in 1996, Padgett's financial needs have been risen to a permanent level rather than being merely seasonal in nature. The Company exceeded its bank credit line of USD 5 million to USD 7.2 million. So Padgett Paper requested their bank, the Calson Trust Company for a higher credit limit of USD 8 million. The request was granted under internal guidance line of USD 8 million at prime. The objective is for the Management at the company's bank must revise Padgett's debt structure in a mutually satisfactory manner that will minimize lender risk while increasing company value. The current situation is the bank is now in bad situation because of over extended. Lending exceeds reasonable levels and is not collateralized. A credit line of USD 8 million is not normal for the bank.…