QUESTION 1 WHY HAS WILSON LUMBER BORROWED INCREASING AMOUNTS DESPITE ITS CONSISTENT PROFITABILITY? Although the company seems to be profitable‚ it has faced shortage of cash. It happened due to increase in Accounts Receivable as well as Inventories. On the other hand‚ Accounts Payable does not increase that rapidly and difficulties regarding cash collection become evident. Furthermore‚ the cash collection cycle becomes larger (59 days in year 2003‚ while more than 70 in year 2006). QUESTION 2
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Beacon lumber analysis Current ratio can measure the ability of the company to paid its short-term debt with their currently resources. The rule of thumb indicated that a company should have the ratio between 1.0 and 2.0. The current ratios of Beacon Lumber during November 2009 to January 2010 are 40.06886782‚ 4.384552725 and 4.551608547 respectively. The current ratios of Beacon Lumber are too high during these three months‚ which means Beacon Lumber is inefficiently using its resource. These
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Soft Wood Lumber and Doman Industries Soft Wood Lumber Disputes Simmered more than 20 years‚ but spilled over May 2002 Dispute from May 2002 to July 2006 Canada’s View Timber is owned by provincial government‚ which charge a ‘stumpage fee’ (charge to cut the trees down) Subsidized because it is used for many industries United States’ View Practice competitive auction‚ and claims Canadian provision unfair Soft Wood Lumber Disputes (con’t) Tentative Agreement reached in April 2006 US would
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price competition‚ careful control of operating expenses and batch purchasing of materials at substantial discounts during past years. The sound market condition and operation contributes to CLC’s growing trend in a foreseeable future. Besides‚ in case of an economic downturn‚ the business is protected to some degree from fluctuations in new housing construction because of the relatively high proportion of its repair work. The business’s sole owner‚ Mr. Clarkson is an energetic and hardworking business
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Clarkson Lumber Company 1. Why has Clarkson Lumber borrowed increasing amounts despite its consistent profitability ? Clarkson’s business is growth with average Net Sales 24.50% from year 1993 to year 1995. The Net Sales Q1 year 1996 is achieved 23.50% of Net Sales year 1995. To achieve the target Net Sales year 1996‚ Clarkson should borrow the Loan from other Bank. If not‚ the estimation of achievement Net Sales year 1996 is 4 times of Net Sales Q1 year 1996 or decrease -6.00% of Net Sales
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Cartwright Lumber Company I. Company Background & Situation Cartwright lumber company was located in a suburb of a large city in the Pacific Northwest; its operations were limited to the retail distribution of lumber products in the local area. In 1994‚ Cartwright Lumber Company was established as a partnership by Mark Cartwright and his brother-in-law Henry Stark. However‚ in 2001‚ Cartwright brought out Henry’s interest for $105‚000 and incorporated the company. About 55% of the total sales
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Rev. Franklin Graham’s presence at the upcoming Festival of Hope event is creating a great divide among Vancouver Christians‚ with some calling the televangelist a polarizing figure because of his strong Biblical views. Many megachurches are supporting the three-day Festival of Hope in Vancouver in March next year‚ but there are some evangelical Protestants and Roman Catholics who do not want Rev. Franklin Graham to be part of the crusade. Five religious leaders have released a written statement
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Clarkson Lumber Company 1. Identify the key problem in the case and explain why it is the key problem. Clarkson Lumber Company’ sales have been growing quickly over the last couple of years. Growths in working capital necessities have surpassed the capacity of the company to produce funds by itself. Also‚ part of the finances was used to buy out a partner‚ further raising the pressure. The company couldn’t appreciate discounts on accounts payable and started borrowing larger funds from the bank
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strong corporate connections we have established with leading companies in the City of London and beyond‚ providing practical opportunities to build your technical skills and confidence. You will receive handson training‚ working through relevant case studies with leading practitioners and world-renowned research faculty. This innovative teaching approach‚ combined with The Chartered Institute for Securities & Investment (CISI) has designated Imperial College Business School a CISI Centre
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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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