Casos History

Clarkson COMM 371, Lecture 6 COMM 371, Lecture 6 Lecture 6: Financing Growth The Clarkson Lumber Case Outline for like a shot (Clarkson Lumber) Case objectives Understand what drives the indigence for cash: Clarkson needs cash, notwithstanding has a good record of gainfulness Evaluate Clarksons loan requirements and ability to repay Link the short-term financial plan to evaluating the firms long-term goals Practice staple fibre skills in financial analysis Review facts of case take a crap statement of cash flows A closer examination of on the job(p) capital Analysis of fixed assets What factors contribute to a need for cash? Evaluating the financial strength of Clarkson Clarksons sustainable outgrowth rate How much does Clarkson pay for AP financing? Evaluate Clarksons need for bank financing and ability to repay long-run strategy Case Facts Rapid growth in crease during recent years (1993-1995). Sales expected to reach $5.5 million in 1996 (+22% vs. previous year) Profits in 1995 $77 thousands (+13% vs. previous year) Clarkson is occurrently at the limit of its current bank strikeing ($400,000) How quickly has Clarksons borrowing escalated? rely debt increased from $60 in 1994 to $390 thousands in 1995 Growth in accounts payable and in notes payable, trade why?

Buyout: Clarkson is paying his get of Holtzs stake. Growth in NWC requirements So far: agonistic to forego trade discounts and rely on bank borrowing. menstruation bank now requires collateral, so explore other possibilities Clarksons objective: with extra financing, the firm can improve profitability by taking advantage of trade discounts on its purchases 1 2 COMM 371, Lecture 6 COMM 371, Lecture 6 Why does a profitable firm like Clarkson need to borrow money? Sales Competes heavily on price Gives criterion discounts Net 30 days credit terms mass of sales used in repair work (less huffy to economy) 55% of sales in April-September (seasonality) ... If you want to get a full essay, order it on our website: Orderessay

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