Upstate Canning Case Study
Upstate Canning Corporation, Inc
Case Study
A. Conclusion and Statement of Case Situation
Mr. Shields’ should accept Mr. Fordham’s proposal in relation to the acquisition of Upstate Canning Company, Inc. In this case, Mr. Shields attempts to conclude if he should acquire the company from its owner, Mr. Fordham, using his personal savings of $35,000 in addition to an investment of $65,000 from his associates. Moreover, Mr. Fordham proposes that he will loan Mr. Shields’ $300,000 worth of income bonds, to be repaid in up to 10 years. Mr. Fordham provides Mr. Shields’ with a bond repayment schedule which allows Mr. Shields’ to repay the bonds at a discount if he meets the wishes to repay the bonds back early. Mr. Shields’ faces a tough decision, as his goal is to run a profitable and efficient company, as well as to attain majority ownership of Upstate Canning within 5 years, while increasing his personal income considerably. The third requirement of this case is that the outside investor, who makes the original $65,000 investment, has his concerns about capital appreciation answered.
Thus, given these three requirements that need to be satisfied simultaneously, I have devised a model that attempts to meet these goals. The explanation and the model itself follow this introduction, and by the end of this statement, you will understand why I believe why all three parties involved will be content as their goals are met by the end of 1962.
B. Explanation and Presentation of Pro Formas (Monthly)
Balance Sheet a) Assets i) Cash – The beginning cash balance of $100,000 was determined by Mr. Fordham in his capital structure proposal. According to his proposal, $100,000 of common stock would be issued at $1 par to Mr. Shields and his investors, thus the beginning cash balance of $100,000 on Upstate Canning’s balance sheet during the beginning of the 1957-58 fiscal year. During the following months, the cash line is used to balance total
Case Study
A. Conclusion and Statement of Case Situation
Mr. Shields’ should accept Mr. Fordham’s proposal in relation to the acquisition of Upstate Canning Company, Inc. In this case, Mr. Shields attempts to conclude if he should acquire the company from its owner, Mr. Fordham, using his personal savings of $35,000 in addition to an investment of $65,000 from his associates. Moreover, Mr. Fordham proposes that he will loan Mr. Shields’ $300,000 worth of income bonds, to be repaid in up to 10 years. Mr. Fordham provides Mr. Shields’ with a bond repayment schedule which allows Mr. Shields’ to repay the bonds at a discount if he meets the wishes to repay the bonds back early. Mr. Shields’ faces a tough decision, as his goal is to run a profitable and efficient company, as well as to attain majority ownership of Upstate Canning within 5 years, while increasing his personal income considerably. The third requirement of this case is that the outside investor, who makes the original $65,000 investment, has his concerns about capital appreciation answered.
Thus, given these three requirements that need to be satisfied simultaneously, I have devised a model that attempts to meet these goals. The explanation and the model itself follow this introduction, and by the end of this statement, you will understand why I believe why all three parties involved will be content as their goals are met by the end of 1962.
B. Explanation and Presentation of Pro Formas (Monthly)
Balance Sheet a) Assets i) Cash – The beginning cash balance of $100,000 was determined by Mr. Fordham in his capital structure proposal. According to his proposal, $100,000 of common stock would be issued at $1 par to Mr. Shields and his investors, thus the beginning cash balance of $100,000 on Upstate Canning’s balance sheet during the beginning of the 1957-58 fiscal year. During the following months, the cash line is used to balance total