1. Why has Cartwright Lumber borrowed increasing amounts despite its consistent profitability? Cartwright lumber has had to borrow substantial amounts of money due to the fact that the firm is a growing company with sales rising quickly. In order for the company to sustain this growth rate‚ they will have to get additional external funding. Growth in sales nearly doubled from 2001 to 2003‚ with a percentage growth of 18% and 34% in 2002 & 2003 respectively. While sales are growing steadily
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Clarkson Lumber Company Group 8 Connor Caruso Leah Chambers Eugene “Trey” Nolfi Trevor Landry (Rough Draft) Summary of facts: Clarkson Lumber Company is a top lumber supplier in the Pacific Northwest and was founded in 1981 as a partnership between Mr. Clarkson and his brotherinlaw‚ Henry Holtz. In 1994‚ Mr. Clarkson bought out Mr. Holtz’s share in the company for $200‚000. Sales for Clarkson Lumber Company has seen rapid growth‚ increasin
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and concepts that your team should address: 1. Why has Clarkson Lumber Company borrowed increasing amounts despite its consistent profitability? In order for Clarkson to keep up with an increase in sales‚ they need to borrow additional funds to increase their purchase order sizes. 2. How has Mr. Clarkson met the financing needs of the company during the period 1993 through 1995? Has the financial strength of Clarkson Lumber improved or deteriorated? During the last 3 years‚ Clarkson has
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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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The Wilson Company Case 2 Joy has recently acquired a new job with a manufacturing company‚ The Wilson Company. She had moved up the managerial ladder from a first line manager‚ to a middle manager position. This was a big step for Joy‚ however the magnitude of the change was bothering her. Not only did Joy step up a notch in the managerial world‚ she switched worlds from sales to manufacturing. Joy’s new job had some similarities‚ however she was more focused on the differences (which she did not
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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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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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