Jones Electrical Distribution Dr. C. Bulent Aybar Professor of International Finance Context • Jones Electrical Distribution has been expanding rapidly for the past several years. • Increases in working capital requirements have significantly outrun the capacity of the company to generate funds from internal sources. • The company has been forced to forgo taking discounts on accounts payable and to borrow in increasing amounts from its bank to maintain its expansion. • Jones must decide whether
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Jones Electrical Distribution case Jones Electrical Distribution is a wholesaler of electrical components and devices to general contractors and electricians. Although Jones Electrical Distribution has been profitable in the past few years‚ the company experiences a drain on its cash when it attempts to maintain a rapid growth while taking advantage of trade discounts at the rate of 2%. Problems faced by Jones Electrical Distribution are as follows: Should the company maintain a rapid sales growth
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Current Position Jones Electrical Distribution (hereinafter Jones Electric) is currently facing an issue with cash flows‚ which will ultimately affect the overall profitability and growth potential for the company. The owner‚ Nelson Jones‚ is diligent in paying his suppliers within ten days in order to capitalize on a two percent early pay discount‚ but in doing so‚ has over-extended cash flows. Though the company has been profitable and growing over the past three years‚ its current lender‚ Metropolitan
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Financial Management SBB Fundamentals COURSE GUIDE Leiden University Faculty of Mathematics and Natural Sciences Science Based Business Program March 2011 © 2011 All rights reserved Centre for Business Studies (CBW) Leiden University Except as allowed under Dutch Copyright Law (1912)‚ no part of this material may be reproduced or transmitted in any form‚ by any means‚ electronic or mechanical‚ including photocopying‚ recording‚ or any information storage and retrieval system
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Jones electrical distribution Case Study (Group 10) Q 1‚ How well is “Jones Electrical Distribution” performing? What must Jones do well to succeed? First Quarter 2004 2005 2006 2007 Sales increase 18% 17% ROE 7.6% 13.6% 12.3% 2.0% Sustainable growth rate 7.6% 13.6% 12.3% 2.0% Profit Margin 0.9% 1.5% 1.34% 0.8% Assets turnover 2.76 2.88 2.86 0.70 financial leverage 3.20 3.12 3.23 3.49 Shareholder’s equity 31% 32% 31% 29% From coverage
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Jones Electrical Distribution Case Case II Jones Electrical Distribution is a small company involved in wholesales of electrical devices and appliances. Even though Jones Electrical has been able to turn a profit over the past few years‚ they have noticed a shortage of cash when attempting to take advantage of trade discounts. Their current bank is unable to extend financing over $250‚000‚ and Jones believes they will need considerably more to finance their operations. Therefore‚ Nelson Jones
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Jones Electrical Distribution Case Analysis Financial Management-Huaihai Cohort- Team 9 This analysis is based on the 5 questions to the case. We believe that answering them builds a rather exhaustive and clear picture of the state of Jones’ business and its strengths and issues and offers a good analysis of its current state. Question A) How well is “Jones Electrical Distribution” performing? What must Jones do well to succeed? Jones Electrical Distribution is electrical supplying company. Since
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PIPER JEFFREY DEVOLDER Jones Electrical Distribution After several years of rapid growth‚ in the spring of 2007 Jones Electrical Distribution anticipated a further substantial increase in sales. Despite good profits‚ the company had experienced a shortage of cash and had found it necessary to increase its borrowing from Metropolitan Bank—a local onebranch bank—to $250‚000 in 2006. The maximum loan that Metropolitan would make to any one borrower was $250‚000‚ and Jones had been able to stay within
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tendencies of the ratios‚ such as net interest income margin‚ net income margin‚ return on asset‚ return on equity‚ etc.‚ that could be used for forecasting. (4) Simplify the accounts of Balance Sheet‚ Income Statement and Cash Flow Statement. 2. I/S Pro Forma 1.1 Interest Income Graph 2-1 Interest Income Graph 2-1 shows the total interest income of Orrstown from year 2006-2013. As it takes a longer time for small financial institutions to react on the financial crisis‚ the negative interest income
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MBA770 Corporate Finance Case “Jones Electrical Distribution” Description Jones Electrical Distribution (“JED”)‚ which sells electrical components and tools to general contractors and electricians‚ is experiencing rapid growth in a highly-fragmented‚ highly competitive industry and despite profits‚ experiencing a cash shortfall‚ resulting in increased borrowing from Metropolitan Bank (the “Bank”) to $250K‚ the max loan amount the Bank will make to any one client. JED has been able to remain
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