The Butler Lumber company is facing cash difficulties due to the buyout of Henry Stark’s share and because it is operating a high growth rate. Thus‚ it is imperative to analyze the various options available to Mark Butler in order to meet the cash needs of the Butler Lumber Company. In order to support the reasoning for our recommendation‚ we constructed a ratio analysis (Appendix I; Exhibit 1). Even though the firm has realized increasing sales and decreased its operating and cash cycle‚ other
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Butler Lumber Company Case Butler Lumber Company Case Summary of facts: In 1981 by Mark Butler and his brother-in-law Henry Stark founded the Butler Lumber Company. In 1988 Mr. Butler bought Mr. Stark’s share for $105‚000 to be paid of in 1989 out of which $70‚000 was raised by a loan carrying an interest rate of 11% and repayable at the rate of $7‚000 over the next 10 years. Over the past five years‚ Butler Lumber Company has experienced rapid growth in its business. It derives its business
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Insurance Companies and Pension Funds Insurance Companies Insurance companies assume the risk of their clients in return for a fee‚ called the Premium. Most people purchase insurance because they are risk-averse-they would rather pay a certainty equivalent (the premium) than accept a gamble What is Insurance? A contract (policy) in which an individual or entity receives financial protection or reimbursement against losses from an insurance company. The company pools clients’ risks to make payments
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Case Study: Capital Budgeting Butler Lumber Company Abstract Butler Lumber Company‚ a lumber retailer with a rapid growth rate‚ is faced with the problem of cash flow shortage. In order to support this profitable business‚ BLC needs a great amount of cash. The loan of $250‚000 from Suburban National and a line of credit of up to $465‚000 from Northrop National Bank are the two choices provided. After a brief review of the operation and financial conditions of BLC‚ we first make analysis of
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CASE 13-6 BUTLER LUMBER COMPANY* Question 1 How well is Butler Lumber doing? Despite recording a tremendous growth in revenue as follows: 2009: 18.62% 2010: 33.83% 2011: 6.61% (on annualised basis) The profitability of Butler Lumber is on declining trend. | |2008 |2009 |2010 |1Q 2011 | |Gross Profit Margin |27.99% |28.61% |27.62% |27.30%
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Corporate Finance Case Study Report Ⅰ | Butler Lumber Company | | | 2010-3-17 | | 陈怡 1091209054 严伟洁 1091209036 姜帆 1091209052 敖翔 1091209024 Abstract In this report‚ we study the case of Butler Lumber Company and analyze the financing problem it was facing. First‚ we give a brief review of the background information of the company. Then we diagnose the business by examining its financial statistics and discover that company was seriously lacking of cash due to
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SOURCES AND USES OF FUNDS OF FOREIGN BANKS Sources and Uses of funds is a fund flow statement which explains the various sources from which funds have been raised and the uses these funds were put to. This statement is similar to a balance sheet since liabilities and assets are themselves sources and uses of funds respectively. The major difference however‚ between a Sources and Uses of funds statement and balance sheet is the former captures the movements in funds‚ while the latter merely presents
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No-Load Mutual Funds Mutual funds can be classified into two types - Load mutual funds and No-Load mutual funds. Load funds are those funds that charge commission at the time of purchase or redemption. They can be further subdivided into (1) Front-end load funds and (2) Back-end load funds. Front-end load funds charge commission at the time of purchase and back-end load funds charge commission at the time of redemption. Large cap funds Large cap funds are those mutual funds‚ which seek capital
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Nicholas Cappucci Cost Management Systems Professor Wall Butler Lumber 1.Mark Butler has to borrow so much money to support his business because of his plans to expand his business and to consolidate his debt. Receiving the loan will allow Butler to make sure his inventory is ready for the projected sales increase in the coming year. Cash flexibility is also an issue with this company because they have so many outstanding debts‚ getting the loan will improve the cash flexibility. 2.I do
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INVESTIGATING MUTUAL FUNDS IN GHANA: IT’S RISK‚ RETURN AND PERFORMANCE ABSTRACT Over the years‚ investors have been attracted to mutual funds. This study seeks to do an-depth analysis of the Ghanaian mutual fund industry between the years 2006 and 2010. An exhaustive literature review on mutual funds and portfolio diversification will be conducted. An assessment of the performance of mutual funds will be done using the Sharpe and Sortino ratios as well as the Jensen Alpha. Comparisons will be made
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