Butler Lumber 1. Why does BL need to borrow money to support its profitable business? Draw up a Fund Flow Statement‚ i.e.‚ Funding and Uses a. Funding would include Bank Borrowing‚ Trade Credit‚ Retained Earnings‚ Cash‚ Accrued Expenses b. Uses would include Inventories‚ A/R‚ Buyout‚ Reduction in debt‚ increase in fixed assets/accounts Response: BL needs to borrow money from the bank to take benefit of the purchase discounts. During the last two years‚ BL had taken very few purchase discounts
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Timothy Gregory Acct 461 Week 2 Case 13-6 Questions 1. How well is Butler Lumber doing? Despite the fact that‚ Butler is demonstrating development consistently; 2009 18.62%‚ 2010 33.83%‚ 2011 6.61% up to the first quarter‚ its gainfulness is gradually declining; 2009 28.61%‚ 2010 27.62%‚ 27.3% 2011 first quarter. In any case‚ the decrease in gross net revenue won’t be so terrible on the off chance that they can figure out how to have great expense administration and bring down their working cost
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Butler Lumber Case Study I. Statement of Financial Problem Butler Lumber Company‚ a growing profitable business has exhausted its credit limit and the key issues facing it are: 1. Need for additional funds to continue the growth 2. Need to consolidate debt 3. Need to improve cash flexibility. In this case study I will be discussing following problem: Why has Butler Lumber been profitable in the increasing volume of sales but at the same time it is experiencing cash difficulties
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1. Why has Butler Lumber borrowed increasing amounts despite its consistent profitability? How has Mr. Butler met the financing needs of the company during the period 1988 through 1990? (It would be helpful to develop a cash flow analysis (use vs. source) and the cash flow statement based upon the income statement and the balance sheet provided in the case for the period of 1988 to 1990.) Through the period of 1988 to 1990 Mark Butler has met the needs of financing through decreasing the amount of
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Butler Lumber After thorough review and analysis of Butler Lumber’s financial reports‚ I believe that it is in the best interest of Northrup National Bank to not only approve the requested $465‚000 loan‚ but look to increase the loan amount. A review of the 5 C’s will show in more detail the decision to approve this loan: 1. Capacity/Cash Flow: Butler runs a lean operation that has allowed them to have success due to competitive pricing. They have met their financing needs by increasing
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The maximum loan that the Butler Lumber Company (BLC) could obtain from Suburban National was $250‚000 in which his property would be used to secure the loan. Northrop National Bank offered BLC a line of credit of up to $465‚000. BLC would have to sever ties with Suburban National if they were to have this LOC extended to them. As Mr. Butlers financial advisor‚ I would advise him to take the loan in an attempt to grow the business. One alarming fact about his business is the lack
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BUTLER LUMBER COMPANY CASE REPORT Francis Davidson Tanguay Paula Zalba Dounia Tazimezalek Carl Helou Applied Corporate Finance Larbi Hammami McGill University‚ Montreal Tuesday‚ May 14th‚ 2013 1. Problem 1.1 Why was sales growth so robust‚ but net income growth anemic at best? 1.2 Does Mr.Butler need additional funding to fuel his growth? 1.3 Why does butler lumber have a cash shortage problem to begin with? 1.4 Could the cash flows of Butler Lumber support additional debt? 1.5 Should butler lumber
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entertainers for the night. What was different about this is that is wasn’t just the big named gospel singers that were performing but there were church groups and small choirs and this one mime team that caught my attention in particular called Face 2 Face. I gravitated toward them for one‚ because I mime myself and two‚ is that they were extremely powerful dancers at only the age of eleven. Jordan‚ the male of the duo gave me a poster of the two of them and I asked him for his autograph and the female
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BUTLER SERVICE HISTORY The word "butler" comes from the Old French bouteleur (cup bearer)‚ from bouteille (bottle)‚ and ultimately from Latin. The role of the butler‚ for centuries‚ has been that of the chief steward of a household‚ the attendant entrusted with the care and serving of wine and other bottled beverages which in ancient times might have represented a considerable portion of the household’s assets. In Britain‚ the butler was originally a middle-ranking member of the staff of a grand
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Shumann Butler Lumber Company Background: Butler Lumber Company had been founded in 1981 in a suburb of a large city in the Pacific Northwest. The company s operations were limited to the retail distribution of lumber products. Their typical products included plywood‚ moldings‚ and sash and door products. Despite good profits Butler Lumber Company experienced a shortage in cash and found it necessary to increase its bank loans. Issues: y y Why does a Profitable company such as Butler Lumber
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