...Case Analysis: Butler Lumber Company (2011-05-03 06:06:15) 转载▼ 标签：mbacorporatefinancecasestudybutlerlumber财经 | 分类： CorporateFinanceCaseStudy | HARVARD BUSINESS SCHOOL 9-292-013 REV: JANUARY 4, 2002 Butler Lumber Company To examine Butler’s current financial situation and to answer the question of how well Butler is doing are not an easy task. There are many things to look into. Let us start with net working capital. Net working capital= current assets- current liabilities | 1988 | 1989 | 1990 | 1991 | current assets | 468 | 596 | 776 | 932 | current liabilities | 260 | 375 | 535 | 690 | net working capital | 208 | 221 | 241 | 242 | In thousands of dollars For 1991, only first quarter’s data is provided, so in the following discussion, we us the first quarter’s data to represent year 1991. Using excel, I calculated the net working capital of Butler Lumber Company from year 1988 to year 1991. Net working capital can give us some ideas how much the company’s potential reservoir money is. We see a steady increase in net working capital through these years, which is a good sign. However, merely the absolute numbers are not sufficient to make further judgment. Thus, I make this chart on common size analysis based on the total asset. net working capital | 208 | 221 | 241 | 242 | total assets | 594 | 736 | 933 | 1094 | net working capital common size | 0.350168 | 0.300272 | 0.258307 | 0.221207 | In thousands of dollars From the...
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...BA 5802 Financial Management Case Study 1 Emre BULUT Butler Lumber Company 2056281 | | | | | | | First Quarter | | | | | 1988 | 1989 | 1990 | 1991 | | | | | | | | | | | Current Ratio | (CA/CL) | | 1.80 | 1.59 | 1.45 | 1.35 | | Quick Ratio | ((CA-Inv)/CL) | 0.88 | 0.72 | 0.67 | 0.54 | | Inv. Turnover | (Sales/Inv) | 7.10 | 6.17 | 6.44 | 1.29 | | DSO | | (Rec*365/Sales) | 36.78 | 40.25 | 42.95 | 175.38 | | FA Turnover | (Sales/FA) | 13.47 | 14.38 | 17.16 | 4.43 | | TA Turnover | (Sales/TA) | 2.86 | 2.74 | 2.89 | 0.66 | | Debt Ratio | (TL/TA) | | 54.55% | 58.70% | 62.70% | 67.37% | | TIE | | (EBIT/Int Exp) | 3.85 | 3.05 | 2.61 | 2.10 | | EC | | (GP/Int Exp) | | 36.54 | 28.80 | 22.55 | 19.60 | | PM | | (NI/Sales) | 1.83% | 1.69% | 1.63% | 1.25% | | OM | | (EBIT/Sales) | 2.95% | 3.03% | 3.19% | 2.92% | | GPM | | ((Sales-COGS)/Sales) | 27.99% | 28.61% | 27.62% | 27.30% | | BEP | | (EBIT/TA) | | 8.42% | 8.29% | 9.22% | 1.92% | | ROA | | (NI/TA) | | 5.22% | 4.62% | 4.72% | 0.82% | | ROE | | (NI/Com Eq) | 11.48% | 11.18% | 12.64% | 2.52% | | Questions: 1: Why does Mr. Butler have to borrow so much money to support this profitable business? First of all, company is doing well but it has some problems to compensate their short term liabilities. As CR is examined ratio has a decreasing tendency. This is a pointer of money necessity in company. Also although company has a...
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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 in 1988 – 1990? This is a historical problem and my calculations and assumptions are based on income statement and balance sheet for 1988 – 1990. II. General Framework for Financial Analyses There are different financial ratios and questions they answer: • Liquidity ratio – current ratio: Will Butler Lumber be able to pay off his debts as they come due? Satisfactory liquidity ratio is necessary if Butler Lumber is to continue its operations. • Asset management ratio: Does Butler Lumber have the appropriate amount of assets versus sales? How effectively is Butler Lumber managing its assets? • Debt management ration: Does Butler Lumber have the right mix of debt and equity? • Profitability Ratios: Are sales high enough? Do sales exceed the unit cost? It is necessary to calculate different types of financial ratios to examine different aspects of Butler Lumber’s operations. Key accounts for sources of funds for Butler...
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...Butler Lumber Case Study Zachary Scott Brown FIN 6420 – Dr. J. Robert Malko February 4, 2012 I: Statement of Financial Problem: Butler Lumber Company, a rapidly growing lumber products and retail distribution organization, faced a critical challenge that would determine its future success and level of profitability. The company, led by its founder Mark Butler, had a bright future as its products were consistently in demand in both the new construction and repair work fields. However, Butler Lumber faced one major challenge. The challenge that the company was experiencing was a shortage of cash due to restrictions set by its current funding source, Suburban National Bank. Due to these restrictions, Butler Lumber began to explore other funding sources in order to enhance its current business model and satisfy the high demand of its products. As a possible solution, Butler Lumber looked to a larger bank, the Northrop Bank, which had the potential to offer the company $465,000, nearly double the amount offered by its current lender, Suburban National Bank. Although the idea of moving to a heavy hitting lender seemed quite appealing, one major financial problem needed to be addressed. The major financial problem facing Butler Lumber was identifying why the forecasted figures shown on the income statement differ from the results provided on the balance sheet. II: General Framework for Financial Analysis: There are several factors that can contribute to discrepancies or inconsistencies...
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...Butler Lumber Case Management Accounting Case (1) Financial Planning: Butler Lumber Valuation 1. Although Mr Butler has seen an increase in his sales for the last few years, there are a few reasons why he needed a loan from the bank to keep his operations going. 1) Shortage of Cash: Despite good profits, Mr. Butler had experienced a shortage of cash from 1988 to 1990. During this period of time, there was a decrease in cash reserves, as well as in inventory turnover, indicating that Mr. Butler’s money had been tied up in his inventory. This can be resolved by working on his receivables turnover ratio, which decreased from 1988 to 1990, as seen in Appendix A. 2) Debt Consolidation: In late 1988, Mr. Butler took a loan of $70,000 that carried an interest rate of 11%. The annual interest payable to the bank compounded to his cash shortage problem. 3) Expansion of operational business: Additional investments in working capital and inventory purchases will be required to keep up with the company’s increasing sales volume. 2. As illustrated in Appendix B, assuming that 1991 sales volume will be $3.6 million, Butler Lumber will only need a loan of roughly $333,600.00 to finance the expected expansion in sales. The company’s estimate of the loan requirements is inaccurate. 3. In the first quarter of 1990, sales were $698,000, approximately 25.91% of the yearly revenue. Based on this ratio, we estimate that Butler Lumber Company will generate approximately...
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...I. Statement of Financial Problem Butler Lumber Company, a growing, profitable business has exhausted it’s credit limit with its current bank and needs additional capital to: * Continue to fund growth * Consolidate debt * Improve cash flexibility In this case study, I will examine the following problem: During the years of 1988-1990, why has Butler Lumber increased sales volume but experienced a decrease in cash flow? This problem is historical, and I will base my analysis from information contained on the Butler Lumber income statement and balance sheet spanning the years of 1988-1990. II. Financial Analysis Framework To adequately assess the situation, the following ratios will need to be determined to create a framework for analysis: * Liquidity ratio – Will Butler be able to liquidate enough assets to be able to pay off debt as payments are due? A satisfactory liquidity ratio is required if Butler Lumber is to continue operations. * Debt management ratio – What does Butler Lumber’s mix of debt to equity look like? Is the combination right? * Asset management ratio – Does the company have the right amount of assets to offset sales? Is Butler effectively managing its assets? * Profitability ratio – Is the level of sales high enough? Do sales exceed the cost of each unit? Are they achieving an adequate level of profitability? Calculating these ratios will allow for proper application of the framework for analysis. The source of funds...
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...FNCE90013 Case Studies in Finance SUBJECT GUIDE July – August, 2015 Prepared by George Kester Department of Finance Faculty of Business and Economics Objective To develop an understanding of applied corporate finance including financial analysis and forecasting, financing sales growth, short-term versus long-term financing, capital structure policy, capital investment analysis, cost of capital, and company valuation. The course will be experiential and focus upon selected Harvard Business School cases describing actual business situations faced by financial managers, requiring analysis, and decision-making. Professor Professor George W. Kester Texts Robert C. Higgins, Analysis for Financial Management (10th Editon), McGraw-Hill Irwin, 2012. Cases You should read and analyze each assigned case. The cases are available on the LMS page for FNCE90013. Readings Selected readings will be distributed during the course. Group Study It is recommended that you form yourselves into small study groups for the purpose of routinely reviewing and discussing assigned before each class. Your learning experience will be enhanced by such interaction and you will be better prepared for class. Presentations Copies of the PowerPoint slides of the presentations are available on the LMS page for FNCE90013. It is recommended that you print them out prior to each class. Attendance The class attendance will be taken. Participation ...
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...Butler Lumber Company Case Study 3) Butler Lumber’s profitability is very low. Their net profit margin, return on assets and return on equity are all below 0.1. This means that even with high sales, their net income will not go up very quickly and they may want to look into cutting costs. Their liquidity was good for the previous years, however this year has not started out good. The quick ratio has been in decline every year and is starting to get to a very low number. The days payable outstanding has constantly risen to the point where it is no longer acceptable. The current ratio in 1988 was very good. Since then it has also been in decline. This company cannot continue this trend. Asset management has also seen a decline over the past three years. In 1988, days sales outstanding, asset turnover and inventory turnover were all very strong. With the decline, the total asset turnover has dropped below 1 meaning this company is not selling enough. Meanwhile, debt has consistently increased while the times interest earned has steadily decreased. If these trends continue, this company will go out of business. 4) Mr. Butler must borrow money to support his business because his debt to equity ratio keeps going up. In order to pay for this debt he needs to make sales but his “days sales outstanding” ratio is going up as well. He has a high inventory, so the majority of his expenses go into purchasing more inventories. This would be acceptable if his customers were paying off...
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...123 Upload Log In Sign up Browse DownloadStandard viewFull view OF 31 Nintendo個案分析 Ratings: 0|Views: 252|Likes: 0 Published by 蘇琇琇 See More Nintendo 個案報告 -12 組 100355040 劉恁宣 100355041 許恆碩 100355043 徐皓筠 100355045 馮千晏 100355054 蘇毓琇 051015202530351967-1982 1983-1993 1994-1999 2000-2003 2004- 消費者需求程度 技術發展程度 一、報告架構 在個案中 Nintendo 的新產品 -Wii 以較便宜、使用者易用的特色，吸引了許多當時非玩家的新顧客，為電玩市場帶來破壞性創新的效果，本組的報告先回顧在具有破壞性創新的產品出現之前，電玩市場的競爭概況，再以 Iwata 上任為轉捩點，分析 Nintendo 為何能夠對競爭越趨白熱化的電玩市場帶來衝擊，最後以競爭者的角度，思考他們如何面對破壞性創新所帶來的產業新局面。 二、 電動玩具產業趨勢 (1967-2003) ( 一 ) 正在起步的電玩產業 (1967-1982) 競爭態勢 在電動玩具技術剛起步時，電動玩具還是以大型的街機為主，此時較為有名的廠商為 Atari ，其 1977 年推出的 Atari 2600 風靡一時，此階段隨著電玩市場蕭條而結束。 技術發展 八位元的卡帶 ( 二 )Nintendo 的稱霸時代 (1983-1993) 競爭態勢 1983 年 Nintendo 推出 Famicom(1985 年以 NES 的名字在美國推出 ) 打破了市場萎靡的局勢，成為產業的領導者， 1989 年更推出了第一部手持的電動玩具 -Game Boy ，此時 Nintendo 的競爭者主要為 Sega 。 技術發展 仍是八位元的卡帶，但遊戲更多，且 Famicom 擁有更好的聲音效果與畫質。 ( 三 )Sony 突起領導產業 (1994-1999) 競爭態勢 1994 年 Sony 在日本推出 PlaySystem(PS) ， 1995 年在美國推出 PS ，馬上顛覆了 Nintendo 原有的地位。不同於 Nintendo 簡單、易操作的遊戲， PS 的遊戲更為複雜，將電玩遊戲的目標客群推往更高的年齡層 ( 少年晚期或是剛進入社會的成年人 ) ，且以儲存容量更大、成本更低的 CD 來執行遊戲，雖然 Nintendo 在 1996 年推出較 NES 品質更佳的 N64( 仍為卡帶式的遊戲機 ) ，仍無法動搖 Sony 的高市場佔有率。 技術發展 16 位元、 32 位元、 64 位元和 3D 繪圖技術皆出現了，且遊戲畫質與複雜度增加。 ( 四 ) 三方的軍備競賽 (2000-2003) 競爭態勢 2000 年 Sony 推出 PS2 ，開啟了軍備競賽的新循環，由於 PS2 的成功， Microsoft 意識到電玩市場對個人電腦遊戲市場的潛在威脅， ...
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...Sarmas www.csupomona.edu/~psarmas CATALOG DESCRIPTION: A seminar course in finance utilizing comprehensive cases to simulate the role of the financial manager. 3 seminar-discussion. Prerequisite: GBA 546, all required 500-level courses, and microcomputer proficiency. Concurrent enrollment in GBA 646. Unconditional standing requirement. EXPANDED DESCRIPTION OF THE COURSE AND INSTRUCTIONAL METHODS: A. Expanded Description of the Course: This course reinforces the basic concepts of financial management. The course provides an in-depth discussion of key topics that are critical to financial management: (1) the goals of the firms, (2) financial statement analysis, planning, and forecasting, (3) working capital policy and management, (4) capital budgeting techniques without and with risk, (5) capital structure theory and application, (5) the cost of capital estimation, and (6) long-term financing decisions. In addition, the course examines issues such as lease financing, merger and acquisition, and international financial management. B. Instructional Methods: The delivery system throughout this course will be a combination of class discussion and case analysis. The case analysis will be both in a written format and oral presentation. The amount of lecture will be limited to detailed coverage of concepts pertaining to each individual case. REQUIRED BACKGROUND OR EXPERIENCE: A. Prerequisites: Fundamental of Financial Management (GBA 546), all required...
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...Case Studies Solutions Case Studies Solutions,Article Writing,Assignments,Research Work,Home Work MenuSkip to content Home How We Work ? Refund Policy How to Order ? Disclaimer Contact Us Finance Cases List POSTED ON MARCH 8, 2013 Hello, If u want us to solve any case study from below list, do contact us anytime, We are here to provide the experience, expertise, and professionalism that you are looking for , Our tutors are available 24/7 to assist you what you need, Click Here to submit your Order. ======================================================================================= Acquisition of Consolidated Rail Corp. by Benjamin C. Esty Airbus A3XX: Developing the World’s Largest Commercial Jet by Benjamin C. Esty American Chemical Corp.by William E. Fruhan, John P. Goldsberry American Home Products Corp.by David W. Mullins AQR’s Momentum Funds by Daniel B. Bergstresser, Lauren H. Cohen, Randolph B. Cohen, Christopher Malloy Arundel Partners: The Sequel Project by Timothy A. Luehrman AXA MONY by Andre F. Perold, Lucy White Beta Management Co. by Michael E. Edleson Butler Lumber Co. by Thomas R. Piper Cartwright Lumber Co.by Thomas R. Piper Citigroup 2007: Financial Reporting and Regulatory Capital by Edward J. Riedl, Suraj Srinivasan Clarkson Lumber Co. by Thomas R. Piper Cooper Industries, Inc. by Thomas R. Piper Cost of Capital at Ameritrade by Erik Stafford, Mark L. Mitchell Debt Policy at UST, Inc. by Mark L. Mitchell Dell’s Working Capital...
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... Updated from Twelfth Edition. Porter Lumber, Inc. has been updated and renamed Butler Lumber. The Sears Roebuck vs. Wal-Mart and Quality Furniture Company cases have been dropped. Approach Although it is not possible to do this precisely, the financial statement analysis discussion is more coherent, we believe, if it is built around Illustration 13-1. The theme is that the financial statement proxy for shareholder value is return on investment, and the ratios help explain why a given return was not satisfactory (if it was not), or at least identify the areas that need investigation. As with Chapter 8, the amount of attention given to this chapter depends on whether or not the students are taking or will take a course in finance. In such a course, they will, of course, deal considerably more with financial statement analysis than is contained in this introductory treatment. When a finance course is given, we do not assign the chapter, but suggest only that students skim through it. Students should not get the impression that there is one “best” list of ratios to be memorized. Although the 24 given in Illustration 13-3 could be expanded still further, in practice the analyst will select the ratios most appropriate for a given industry setting. Cases Genmo Corporation is a “backwards” case in which students deduce the financial statements of General Motors Corporation from the ratios. Amerbran Company (B) is a case involving straightforward calculation of...
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...CASES IN FINANCIAL MANAGEMENT SYLLABUS FIN 522 Professor James A. Gentry Cases In Financial Management 343M Wohlers Hall Spring Semester 2009 333-7995 2043 BIF j-gentry@uiuc.edu Office Hours: 10:30 a.m. to 11:45 a.m. on Mon. and Wed/. or by Appointment I. Teaching Objectives Financial decision making cases are used to… • Create a highly interactive learning environment; • Learn about the application of financial management and credit analysis concepts; • Discover what you do not know about the practice of financial management; • Show what you have learned; • Highlight the relationships between strategic goals and the creation of firm value; • Develop techniques for interpreting a firm’s financial data and strategic plans; • Enhance your critical thinking and problem solving skills; • Expand your understanding of financial theory and its application; • Improve your listening and cooperative learning skills. II. Learning Promises At the end of this course your will be able to… • Think like a financial manager; • Interpret a company’s financial health by evaluating the performance...
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...University MBAF 614: Financial Analysis & Strategy Fall 2015 Instructor: Dr. David Offenberg Office: Hilton 313 Phone: (310) 338-2903 E-mail: doffenberg@lmu.edu Office Hours: Tuesday, 4:00 – 6:00 p.m. (or by appointment) Class time: Tuesday, 7:15 - 10:00 p.m. (HIL 023) Course Overview: The purpose of this course is to study the impact of corporate financial strategy on shareholder wealth. In essence, this course covers the fundamentals of MBAA 608 with a lot more depth. Throughout the semester, we will examine real situations that were faced by real chief financial officers. In the end, you should have a much better appreciation for the role of the CFO in keeping the corporation afloat. Method: This course is taught via case studies supported by lectures. Class sessions begin with a studentled analysis of the assigned case. The remainder of the class period will be dedicated to further analysis of the case. Students have substantial responsibility (and incentives) for coming to class prepared to engage in active discussion. Each student is expected to work in a team to analyze the cases. Readings: The textbook for the course is: Case Problems in Finance, by Kester, Ruback and Tufano, Twelfth Edition, Publisher: McGraw Hill- Irwin. The bookstore will not carry the book so you must order it online. The MBAA 608 textbook is also a useful reference, but not required (Brigham and Ehrhardt, Financial Management: Theory and Practice). Alternatively, you may use ...
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...LECTURE Review of Topics, Assignment Sheets, and Course Outline The Case Method - Rules for Classroom Discussion Instruction for the Formation of Study & Project Groups B. Professor/Student Introductions C. Readings from Course Packet: 1. Fin 394.4 Syllabus - Course Outline and Grading Policy 2. “Course Introduction” 3. Note to the Student: How to Study and Discuss Cases 4. “The Case Method” - Jeff Sandefer 5. “Classroom Discussion” - Jeff Sandefer 6. “Note on Study Groups” - Jeff Sandefer ASSIGNMENT: 1. PURCHASE THE COURSE PACKET 2. BRING YOUR RESUME TO THE NEXT CLASS 3. BROWSE THE CLASS BLACKBOARD SITE: (HTTP://COURSES.UTEXAS.EDU/) AND LOOK AT THE EXTERNAL LINKS AND COURSE DOCUMENTS POSTED. a. Case Exhibits b. Case Solutions c. Valuation Templates d. Valuation External Links e. Project Information ASSIGNMENT SHEET THURSDAY, JANUARY 19, 2012 CLASS 2 – WORK FOR MONEY OR MONEY WORK FOR YOU? A. Turn in Resume B. Form study groups (self-select 4-6 people with different education, concentration, work experience and cultural background). Send e-mail to the professor with team member’s names. Study teams members must be in same section of the class. C. If you plan to do a consulting project, then start...
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