Clarion will reduce his payable period to 10 days and take the 2 % purchase discount, and 2. Clarkson Lumber is taking a longer time to collect from their customers, leaving the company longer without that cash. There are many supporting strong points but it also has some problems to work out. The historical relations between 1993-1995 will continue in 1996. In your group, assign a Team Administrator, a Notekeeper, and a Number Cruncher s. How attractive is it to take the trade discounts? In the third case, if Mr.
The other members of the group will contribute their thoughts and ensure that their spokesperson has all the relevant facts to speak for their group. Clarkson have to borrow money to support this profitable business? Butler need additional funding to fuel his growth? He should explore the possibilities of equity financing, in order to bring cash into the business. Clarkson, the probable repayment schedule, the nature and degree of the risks incurred and the appropriate terms of such a bank loan. Thus, the Property, Net has not increased but has in fact decreased as the result of depreciation see Exhibit 6, Property, Net. The company's existing strategy relies heavily on trade credit and short term debt to finance organic growth.
Continue to rely heavily on trade credit and pay off bills slowly. For instance, he took 35 days in 1993, 45 days in 1994, and 38 days in 1995. Introduction Clarkson Lumber Company has been in growth during recent years and anticipated a further increase in sales. How has Clarkson met the financing needs of the company from 1993 — 1995? In our society today, independence for women is one of the main topics of many songs. Asset, Balance sheet, Financial ratio 1574 Words 7 Pages Case Study Questions Clarkson Lumber Company The Clarkson Lumber Company case is divided into 3 parts. Send your data or let us do the research. Why has Cartwright Lumber borrowed increasing amounts despite its consistent profitability? It seems that he tried to take longer but then the suppliers may have talked to him because he improved to 38 days, however, it is still an extra 8 days from the typical 30 day invoice.
The company has experienced rapid growth over the recent years and it is anticipated to continue. Keith Clarkson the sole owner and president of The Clarkson Lumber Company still faced a shortage of cash and found it necessary to increase his borrowings, he was therefore on a look-out to start off a new banking relationship where he could not only borrow a larger loan amount but also one that did not require a personal guarantee attached. Although the profits are good, they are not good enough in our view. It has low operating expenses, a small staff, and strong management. The cash flow has been decreasing because, it takes longer to get the money from customers, but the company still needs to pay for its purchases. This cost may be overstated. Clarkson, the probable repayment schedule, the nature and degree of the risks incurred and the appropriate terms of such a bank loan.
Keith Clarkson, has been in business for 15 years and currently has 15 employees. Balance sheet, Debt, Discounts and allowances 1086 Words 10 Pages Statement of the Problem At first glance, Clarkson Lumber appears to be a healthy company. All the references show that he is a good business man and is reliable. The business cannot support the current rate of growth much longer. The has been decreasing because, it takes longer to get the money from customers, but the company still needs to pay for its purchases. The company had acquired seven more lumber yards north and. Any firm who has valuable and rare resources, and these resources are costly to imitate, have achieved their competitive advantage.
Taking into consideration that Wilson Lumber is a small company it can be considered average. Resources are also valuable if they provide customer satisfaction and increase customer value. This cost may be overstated. I believe for the productivity to be below standard because they were sent to this crew because of their lack of work. Analysis There are several reasons for Mr.
Once refreshed go through the case solution again - improve sentence structures and grammar, double check the numbers provided in your analysis and question your recommendations. With relatively low operating expenses, operated by a small number of staff and a strong management. The bank could lend Mr. Typical products of the company included plywood, moldings, and sash and door products. Control, Control engineering, Control system 1658 Words 5 Pages Butler Lumber Case Study I.
Incurring the lowest costs would also enable Birch Paper Company to earn the highest profits possible. Clarkson Lumber is in this situation for a number of reasons. The reasons that resource imitation is costly are historical conditions, casual ambiguity and social complexity. However, resources should also be perfectly non sustainable. The current loan that it gets from Suburban National Bank is not enough to supplement the cash flow that it gets versus the projected expenses that the company had to pay and was maturing.
It mainly consists the importance of a customer and the level of cost if a customer will switch from one product to another. Clarkson Lumber Company era una sociedad entre Keith Clarkson y su cuñado Henry Holtz. Time line also provides an insight into the progressive challenges the company is facing in the case study. Also prepare a combined cash flow statement for these two years. Clarkson to fully utilize trade discounts to improve profitability.