Organization Management: Commercial Bank of Ontario Case Study
COMM 1007EL-01
Management of Organization Ⅱ
Case: LAWSONS
Instructor: J. Austin Davey
Date: January 29, 2014
Executive Summary
Jackie Patrick, a newly appointed loans officer for the Commercial Bank of Ontario, needs to make a decision about whether or not to accept the request for a $194,000 bank loan and a $26,000 line of credit from Paul Mackay, sole proprietor of Lawsons, a general merchandising retailer in Riverdale, Ontario.
According to the ratio analysis and changes in cash flow, it is necessary for Lawsons to seek less expensive debt. Based on the projected financial statements, it is reasonable to grant partial amount.
According to analysis, 4 alternatives are given:
1. Do not grant the loan
2. Grant the loan in full
3. Grant a partial amount-$120,000
4. Grant $26,000 line of credit
Finally, alternative 3 and 4 are recommended. In addition, there are some aspects to be noticed during the short-term and long-term implementation. It is recommended for the company to bring down the age of inventory to near to the industry average by improve the inventory control system. Paul should pay attention to his personal financial condition. It is necessary for him to save some money and reduce the withdraw from Lawsons.
Problem
Jackie Patrick, a newly appointed loans officer for the Commercial Bank of Ontario, needs to make a decision about whether or not to accept the request for a $194,000 bank loan and a $26,000 line of credit from Paul Mackay, sole proprietor of Lawsons, a general merchandising retailer in Riverdale, Ontario. A closer look indicate that this request would certainly require careful attention and scrutiny.
Subproblems
1. Jackie is a newly appointed loans officer, Lawsons is her first loan request. She is reporting to her superiors. Therefore, she wants the information to be accurate and reliable.
2. Industry data is not available for all ratios.
3. Lawsons is sole proprietorship. The financial condition of the firm
Management of Organization Ⅱ
Case: LAWSONS
Instructor: J. Austin Davey
Date: January 29, 2014
Executive Summary
Jackie Patrick, a newly appointed loans officer for the Commercial Bank of Ontario, needs to make a decision about whether or not to accept the request for a $194,000 bank loan and a $26,000 line of credit from Paul Mackay, sole proprietor of Lawsons, a general merchandising retailer in Riverdale, Ontario.
According to the ratio analysis and changes in cash flow, it is necessary for Lawsons to seek less expensive debt. Based on the projected financial statements, it is reasonable to grant partial amount.
According to analysis, 4 alternatives are given:
1. Do not grant the loan
2. Grant the loan in full
3. Grant a partial amount-$120,000
4. Grant $26,000 line of credit
Finally, alternative 3 and 4 are recommended. In addition, there are some aspects to be noticed during the short-term and long-term implementation. It is recommended for the company to bring down the age of inventory to near to the industry average by improve the inventory control system. Paul should pay attention to his personal financial condition. It is necessary for him to save some money and reduce the withdraw from Lawsons.
Problem
Jackie Patrick, a newly appointed loans officer for the Commercial Bank of Ontario, needs to make a decision about whether or not to accept the request for a $194,000 bank loan and a $26,000 line of credit from Paul Mackay, sole proprietor of Lawsons, a general merchandising retailer in Riverdale, Ontario. A closer look indicate that this request would certainly require careful attention and scrutiny.
Subproblems
1. Jackie is a newly appointed loans officer, Lawsons is her first loan request. She is reporting to her superiors. Therefore, she wants the information to be accurate and reliable.
2. Industry data is not available for all ratios.
3. Lawsons is sole proprietorship. The financial condition of the firm