Butler Lumber 1. Why does BL need to borrow money to support its profitable business? Draw up a Fund Flow Statement‚ i.e.‚ Funding and Uses a. Funding would include Bank Borrowing‚ Trade Credit‚ Retained Earnings‚ Cash‚ Accrued Expenses b. Uses would include Inventories‚ A/R‚ Buyout‚ Reduction in debt‚ increase in fixed assets/accounts Response: BL needs to borrow money from the bank to take benefit of the purchase discounts. During the last two years‚ BL had taken very few purchase discounts
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company need funds? First‚ Butler Lumber Company in the spring of 1991 anticipated a further substantial increase in sales. It means there are more working capital associated with the company’s increasing sales volume. Second‚ although they have good profits‚ the company had experienced a shortage of cash. The company’s current borrowing from Suburan National Bank almost reaches the maximum loan that SN Bank would make. Meanwhile‚ the SN Bank now asks Butler Lumber to secure the loan with its real
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Case 1: Clarkson Lumber 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. Clarkson Lumber’s
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Florence Griffith-Joyner who is also known as Flo Jo was born on December 21‚ 1959. She was an Afrivan American track and field athlete. She is is considered to be the fastest women of all times because she still holds the world record for both the 100 and 200 meter. Flo Jo was born in Los in Angeles. During the late 1980s she became popular in International track because of her record- setting performances and also because of her flashy personal style. She was the wife of Al Joyner who was a triple
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Clarkson Lumber Company Situational Overview: Clarkson Lumber Company or the “Company” has encountered financial troubles in the midst of expanding revenues. In order to satisfy the demands of expansion and continue growing top line revenue‚ an increased amount of borrowing is necessary. This increased borrowing will be in the form of a revolving line of credit with an interest rate of 11%. The following paragraphs will examine what has led to the Company’s current illiquidity and what can be done
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the forestry land. softwood lumber is the one of the biggest export products of Canada valuing at 8.6% of total exports. Canadian softwood lumber is sold to united stated below the production cost. Due to market distortions in Canada encourage the government to overproduction of lumber‚ uneconomic decisions by lumber producers‚ and dumping of lumber in us. The US markets were bombarded with profit loss due to the cheap lumber from Canada; therefore the start of lumber dispute began. There has been
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hult international business school | Clarkson Lumber Company | | | Adeeb Valiulla | 1/3/2011 | | Summary Experiencing rapid growth in business and generating fairly good profits‚ Mr. Keith Clarkson the sole owner and president of The Clarkson Lumber Company still faced a shortage of cash and found it necessary to increase his borrowings‚ he was therefore on a look-out to start off a new banking relationship where he could not only borrow a larger loan amount but also one that
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Kilkenny Lumber Case Study Assignment Part I 1. Productivity of the crew would be below standard. I believe for the productivity to be below standard because they were sent to this crew because of their lack of work. Just because they have been assigned to another crew‚ does not mean that they will begin to work well right away. When compared to the Equity Theory‚ I believe there to be positive inequity for the three men assigned to the new group. For being assigned to the group due
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business: Cartwright Lumber Company Nature of the business: Retail distribution of lumber products Overview The Cartwright Lumber Company had been found in 1994 as a partnership by Mark Cartwright and his brother-in-law Henry Stark. Later in 2001‚ Mr. Cartwright bought out Stark’s shares and incorporated the business. Now‚ Mr. Cartwright is a sole owner and president of the company. The business is located in the Pacific Northwest region and does the retail distribution of lumber products in the
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Statement of the Problem At first glance‚ Clarkson Lumber appears to be a healthy company. However‚ despite rapid growth and increasing sales Clarkson Lumber finds itself searching for additional funding to compensate for a shortage in cash to fund its expanding business. Clarkson Lumber is in this situation for a number of reasons. The company’s inability to receive payments from customers in a timely manner created a severe impact in the company’s cash flows. The age of account receivables
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