Comfort
Comfort Zone
Early in September 1991, Gerry Conley was starting his second week as Chief Financial
Officer of Comfort Zone. An experienced financial manager, Mr. Conley was well aware that
Mike Cousins, President of Comfort Zone, had hired him to "put the company's financial house in order." However, despite a week of non-stop discussions with other company executives, all he had found out about Comfort Zone's financial situation was that suppliers were clamoring for payment and that cash was available to satisfy only the most pressing needs.
To help him understand Comfort Zone's financial situation, Mr. Conley had collected the summary financial information shown in Exhibits 1, 2, 3, and 4. As he was looking through some of the recent financial statements, the accounts payable clerk dropped a stack of overdue invoices on his desk. A note attached stated that cash was not available to pay the suppliers.
Company Organization and History
Comfort Zone was organized as a Florida corporation in 1961 with its headquarters in
Jacksonville. Since that time, the company has become a major Southeastern distributor of heating, air conditioning and refrigeration equipment, parts, and supplies with 45 outlets in
Florida, Georgia, Alabama, North Carolina, South Carolina and Mississippi. Through the addition of sales outlets to expand its market area and broadening of its product line, Comfort
Zone increased sales from $23 million in 1985 to $108 million in its fiscal year ended January
31, 1991.
Each sales outlet or "store" operated by Comfort Zone serves as a sales and distribution point for the full line of approximately 20,000 climate control and refrigeration products carried by the company. Each store is run by a manager who is responsible for the hiring and supervision of personnel and for sales, credit, purchasing, inventory, and cost control at the store level. Management feels that this delegation of authority and responsibility is a major contributor to the company's
Early in September 1991, Gerry Conley was starting his second week as Chief Financial
Officer of Comfort Zone. An experienced financial manager, Mr. Conley was well aware that
Mike Cousins, President of Comfort Zone, had hired him to "put the company's financial house in order." However, despite a week of non-stop discussions with other company executives, all he had found out about Comfort Zone's financial situation was that suppliers were clamoring for payment and that cash was available to satisfy only the most pressing needs.
To help him understand Comfort Zone's financial situation, Mr. Conley had collected the summary financial information shown in Exhibits 1, 2, 3, and 4. As he was looking through some of the recent financial statements, the accounts payable clerk dropped a stack of overdue invoices on his desk. A note attached stated that cash was not available to pay the suppliers.
Company Organization and History
Comfort Zone was organized as a Florida corporation in 1961 with its headquarters in
Jacksonville. Since that time, the company has become a major Southeastern distributor of heating, air conditioning and refrigeration equipment, parts, and supplies with 45 outlets in
Florida, Georgia, Alabama, North Carolina, South Carolina and Mississippi. Through the addition of sales outlets to expand its market area and broadening of its product line, Comfort
Zone increased sales from $23 million in 1985 to $108 million in its fiscal year ended January
31, 1991.
Each sales outlet or "store" operated by Comfort Zone serves as a sales and distribution point for the full line of approximately 20,000 climate control and refrigeration products carried by the company. Each store is run by a manager who is responsible for the hiring and supervision of personnel and for sales, credit, purchasing, inventory, and cost control at the store level. Management feels that this delegation of authority and responsibility is a major contributor to the company's