...Cartwright Lumber Company Local Distributor of Wood Based Products Marketing Analysis Mark Cartwright and Henry Stark opened up Cartwright Lumber Company in 1994. The company is based in a large city in the Pacific Northwest. Most of the company’s distribution was in the local area. Recently in 2004 Cartwright had to borrow money to be able to meet higher sales for the company. However, more money is needed to be able to meet the anticipated sales growth for the future. Cartwright is considering a larger loan that would allow Cartwright Lumber Company to meet any cash needs of the future. I recommend going ahead with the expansion, but for Cartwright to pay for it in house. Operating Activities Cartwright Lumber Company had been borrowing money to allow it to realize greater net income. Part of this is due to the fact that Cartwright Lumber Company has been taking longer to collect their account receivables than pay their accounts payable, 58 days compared to 47 days in 2004. If Cartwright were to begin collecting sooner and deferring payment later Cartwright would be able to make the amount needed for borrowing begin to decline. Cartwright should also look into trying to improve their inventory conversion period. In 2001, it was about 70 days since then it has gone up to a projected 81 days in 2004. If Cartwright was able to cut this back down to 70 days and improve on their cash conversion cycle they may not need a larger note instead funding the $87,000 needed in...
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...Overview When Cartwright Lumber Company was originally founded, it was owned by both Mark Cartwright and Henry Stark. However, Cartwright bought out Stark’s interest for $105,000 and became sole owner of the company. To finance this payment, Henry took out a $70,000 loan with an interest rate of 11% secured by land and buildings payable over 10 years at a rate of $7,000 each year. 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 of Cartwright Lumber Company were made in the six months from April through September. There were no sales representative; orders were taken exclusively over telephone. Sales volume had been largely on the basis of successful price competition, made possible by careful control of operating expenses and by quantity purchases of material at substantial discounts. Besides, good relationship with suppliers and high loyalty of employees contributed to its success. Cartwright Lumber Company’s financial status was promising; from 2001 to 2004, they experienced an average sales increase rate of about 29.7% yearly. However, debt existed. In order to buy off Stark’s interest, Cartwright got a loan of...
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...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, the company’s cash is steadily decreasing year to year by 20% and 17% in 2002 and 2003. Taken together with the fact that accounts receivable has grown at a higher rate than sales, 30% & 42%, this firm can not support the growing sales relying on its assets. The DSO ratio for accounts receivable is 36.28, 39.70 & 42.36 in 2001, 2002, and 2003 respectively. With credit terms of 30 days, the DSO is showing that on average customers are not paying on time and year to year they are paying increasingly later. All these factors combined demonstrate poor management of the firm’s assets. This is the reason why the firm is primarily relying on its debts to sustain the increase in sales growth. 2. How has management met the financing needs of the company? Has the financial strength of the company improved or worsened? In an effort to sustain the increase in sales, management has continually raised funding through borrowing from both the bank & its suppliers. The firm has...
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...Jose Mota Dr. Bowens AFAS 200 25 September 2014 The Invisible Man “The Invisible Man”, written by Ralph Ellison is a literature book that was first published in early 1950’s and was immediately a masterpiece. The book is about the life of an African American narrator through his trials and suffering in a small Southern town and as a man that was never visible. The book is titled “The Invisible Man” because the Ellison wants the readers to be aware he was not invisible by a supernatural cause or and an experiment, but he’s invisible due to the fact of others unwilling to notice his existence because of the color of his skin. The narrator didn’t let his invisibility stop him because he viewed it as a constant aggravation; this suffering pain led his ways to make others recognize him. This literature by Ralph Ellison, “The Invisible Man,” shows an image to its readers what life is like for a black person during that time, they lived life but yet were noticed, they were invisible. The narrator secretly lived for free in a shut-off section of a basement of the Monopolized Light and Power Company, where he was stealing electricity from them in order to have light. What got the narrator through the times was that enjoyed listening to jazz music mainly Louis Armstrong’s music, in his secretive underground basement, this helped calm the narrator’s soul and block out struggles throughout the book. He often went into a fantasy world and escape with the music; he would imagine a scene in...
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...1 ) Mr. Cartwright has to borrow substantial amounts of money due to various reasons. The most influential reason is probably the fact that the firm’s sales are rising rather fast compared to available funds. This leads to higher cost of goods sold and means that the firm needs more and more external financing to pay its invoices. Cartwright Lumber Company’s current ratio and quick ratio’s stand by this fact. The Current Ratio is approximately 1,40 (932/690) and the Quick Ratio is around 0,50 ((932-556)/690). The Current Ratio seems to be on an adequate level but the Quick Ratio can be considered to be alarming. This is because the company has such a large inventory. The Quick Ratio is considered to give a more realistic picture of the firm’s short-term financing ability because inventory can’t necessary be realized to liquid funds. The poor status of these ratios leads to the situation where the company can’t use the offered purchase discounts. The Internal growth rate of a company is the highest level of growth it can achieve without outside financing. Cartwright Lumber’s Internal growth rate is 4,72 % (44 / 933) at the end of 2003. The firm’s sales are predicted to increase to 3,6 million from 2,7 million in2004, which is a total growth of 33%. Thus the sales are growing almost 10 times faster than the internal growth rate would allow. The sustainable growth rate is the highest growth rate a firm can sustain without the need to increase its financial leverage. The sustainable...
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...Angus Cartwright Case Study In September 2003, John DeRight and Judy DeRight, both cousins, decided that they both wanted to invest in real estate. The cousins felt that real estate would allow them the “benefits of diversification, protection from future inflation, and tax advantages.” John, a risk averse person, was a retired businessman and was willing to spend $9 million in this investment. John would rely on stock dividends and other income that totaled approximately $1 million. On the other hand, Judy was a risk tolerant businesswoman who owned her own chemical company and had $16 million of funds available for investment. Judy’s after-tax income came out to be approximately $1.1 million. The cousins contacted Angus Cartwright III, an investment advisor who showed John and Judy four different properties that had different circumstances. The properties consisted of residential and office buildings and there were properties that were both currently standing and under construction. Cartwright III, like his father, had plenty of experience with the DeRight family, and so he showed John and Judy the four properties. The first property was Alison Green, a 100-unit apartment in Maryland. It has the highest Net Present Value at $734 and has the lowest breakeven occupancy at 64%. It has the best debt coverage ratio at 2 and highest cash-on-cash at 12%. Based on calculations, 74% of total benefits will be derived from cash flow while 44% of total benefits will come via future...
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...BFIN 4253 – ADVANCED CORPORATE FINANCE “Cartwright Lumber” Case Assignment Case: “Cartwright Lumber Co.” HBS Case #9-204-126, Rev 3/04. Main Question: As Mr. Cartwright’s financial advisor, would you urge him to go ahead with, or to reconsider, his anticipated expansion and his plans for additional debt financing? • He should take the LOC and use trade discounts o Satisfies fund requirement o No collateral o More flexible trade credit limit Additional Questions: 1. Why does Mr. Cartwright have to borrow so much money to support his profitable business? • needs to sustain business and grow in the coming year • increase in inventory and accounts receivable, has not been able to generate cash and A/R ratio and inventory ratio shows taking longer to collect money and holding inventory for longer period • Internal growth rate – 4.72% (44/933) end of 2003 o highest level of growth can achieve without outside financing • Firms sales total growth of 33% o sales are growing almost 10 times faster than internal growth would allow • Sustainable growth rate is highest growth a firm can sustain without the need to increase its financial leverage o Takes into account existing external financing it already has o 12.6% (44/348) much lower than its increasing sales 2. Do you agree with Mr. Cartwright’s estimate of the company’s loan requirements? How much will he need to finance the expected expansion of sales to $3.6 million in 2004? • Yes ...
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...Laboratory 2: Neurosim: Membrane potentials and Action potentials INTRODUCTION NeuroSim is a computer program intended for use in teaching neurophysiology, specifically the concepts associated with the resting membrane potential and the action potential. Within the NeuroSim program is a simulation entitled HH which is based on the equations developed by English physiologists A. L. Hodgkin and A. F. Huxley (J. Physiol. Lond. 117: 500-‐542, 1952). Much of our current knowledge about the mechanisms of resting membrane potentials and action potentials comes from experiments performed by Hodgkin and Huxley on a giant nerve fiber found in the squid species Loligo forbesi (adult squid weight 3.5 lb, adult squid length 14 in). Because of the large diameter of their axons (up to 0.8 mm), it became a convenient model for elecrophysiological research using small intracellular microelectrodes (tip diameter < 0.5 μm). With two microelectrodes, researchers were able to detect an electrical potential difference between...
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...J. Robert Cartwright 411 Pennsylvania Ave. Mt. Bethel, Pa. 18343 (570) 897-0572 was advised of the identity of Investigator Sean P. Brennan and of the confidential nature and purpose of the interview, Cartwright, provided the following information: Cartwright is a retired Chief of Police from Upper Mount Bethel Police Dept. after 20 some years. Cartwright said after he retired, he was asked to be Township Manger in Upper Mount Bethel Township. Cartwright was also asked to run for the board of directors for Bangor School District. He is serving on the board as well as being the Manager. Cartwright said in August of this year, on the day of the election, he was at a diner when he ran into Judge Grigg. Grigg told him not to appoint Ron Angle to the board because he isn’t a good man. Grigg said if he gets appointed he will not give him the oath, he will get up and walk out....
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...During James II’s reign, Thomas Cartwright was one of his biggest supporters when it came to defending James II’s decisions while in power; as one of James II’s faithful Ecclesiastical Commissioners, Cartwright thought it was necessary for him to try to defend his kings view of the constitution (A Sermon Preached 71). The Declaration by William III was actually just a compilation of his thoughts from English and Scottish exiles, along with some of his English Friends about preserving the Protestant religion and for restoring the laws and liberties of England; the official document was written by several people including Gaspar Fagel and the product was eventually transcribed into several thousand copies throughout England ( 39). William III of Orange wanted to bring awareness to how over time public peace, liberties, customs, etc. became subject to less than adequate standards. Thomas Cartwright was basically sending out an...
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...Question 1: John and Judy DeRight are cousins whom share the same investment manager, Angus Cartwright, III, and are both looking to diversify their assets in future investments. Judy is the owner of her own chemical company that earns in excess of $1.6 million before taxes and $1.1 million after taxes per year. Although she has received numerous offers, Judy does not wish to be bought out by anyone and thus desires to diversify the investments she already owns. She currently has over $16 million dollars in securities, which she wants to invest in outside investments. Judy DeRight is thus a business owner with a stable income, and is fairly risk tolerant as she is closer away from retirement than her cousin. John on the other hand is at a completely different part of his professional life than is Judy. Unlike Judy, John sold his company recently and now has $18 million in stocks from the acquiring company. After this sale, he decided to retire and live off the $500,000 dividends the stocks pay and another $500,000 from his own other income. He is willing to sell up to $9 million of his stock shares to fund any future investments. Because he is retired, John is risk averse with his desired investments. Both Judy and John have a few goals that they share in common. They both want to invest in a property large enough that will attract property management companies to do the daily maintenance on that property. That way, they don’t have to do it themselves. They also want to have...
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...Shipping corridors are crucial to trade and the transportation of goods. However, they also negatively affect the ocean environment and surrounding ecosystems. This is highlighted at Point Cartwright as it is neighboured by a shipping corridor. The day-to-day use of the corridor has many impacts on the biotic and abiotic factors of the surrounding ecosystem. The movement and anchorage of boats is a contributing factor to this impact. Propellers disturb the sea bed, increasing water turbidity and creating noise. Anchors also disturb the sea bed, creating furrows in the sand. Increasing water turbidity affects light dependent species such as coral and seagrass, the producers upon which the ecosystem relies. This changes the feeding behaviours...
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...Cuenta de Resultados 2001 - 1er.t 2004 peso peso 2001 Ventas netas Coste de ventas vendidas Existencias iniciales Compras Existencias finales Coste total de productos vendidos Margen Bruto Gastos de explotación Gasto de intereses Beneficio antes de impuestos Impuesto de sociedades Beneficio neto 1.697 2002 2.013 2003 2.694 especifico 100% 1t 2004 718 418 660 1.078 556 522 196 175 10 11 2 9 especifico 100% Evolución variables 2004 % % % anualizado 2002/2001 2002/2003 2003/2004 2.872 1.672 2.640 4.312 2.224 2.088 784 700 40 44 8 36 18,62% 30,60% 19,25% 20,67% 36,40% 17,59% 21,26% 21,18% 53,85% 10,81% 9,68% 33,83% 36,40% 33,99% 34,32% 28,22% 35,70% 29,17% 27,77% 65,00% 29,27% 29,41% 6,61% 412,88% 29,29% 82,09% 432,06% 7,08% 5,38% 6,38% 21,21% -16,98% -18,18% 183 239 326 1.278 1.524 2.042 1.461 1.763 2.368 239 326 418 1.222 1.437 1.950 475 576 744 425 515 658 13 20 33 37 41 53 6 7 9 31 34 44 76% 92% 16% 72% 28% 24% 1% 2% 77% 73% 27% 24% 1% 2% 2% 1% Balance de Situación 2001 - 1er.t 2004 2001 Liquidez Cuentas a cobrar, neto Existencias Activo Circulante Inmovilizado neto total activo Pagarés, banco Pagarés, Stark Pagarés comerciales suma de pagarés 2002 48 222 326 596 140 736 146 0 0 146 2003 41 317 418 776 157 933 233 0 0 233 1t 2004 31 345 556 932 162 1.094 247 0 157 404 58 171 239 468 126 594 0 105 0 105 Cuentas a pagar Gastos devengados Deuda a largo plazo, parte corriente Pasivo corriente Deuda a largo plazo,...
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...since they are the ones falling ill. Cartwright claims that one of the reasons that the immigrants are falling ill is that they were working in an environment that they weren’t used too and that working in the hot sun was causing their illness (Cartwright 305). Cartwright expresses his disdain for the current working conditions for immigrants, referring to the workhouses as “white slave depots” and discussing the immigrants’ limited access to water, heat, and other necessary commodities (Cartwright 296-297). He believes that diseases like typhus will quickly be eradicated by giving the poor blankets and wholesome food (Cartwright, 298). According to Cartwright, hard labor should be reserved for the black...
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...Peter Cartwright was an American Methodist, revivalist,and preacher in the Midwest, as well as twice an elected legislator in Illinois. He was a Methodist missionary who helped start America's Second Great Awakening. He stood for Evangelical Methodism which was becoming one of the fastest growing religions in the nations during the 1800s along with the Baptists. The Awakening is best known for the large camp meetings that led incredible numbers of people towards conversion through a style of preaching and audience participation. Peter Cartwright was very skilled in this style of preaching, “There was a great stir in the congregation. Some wept, some shouted, and before our meeting closed several were converted.” said Cartwright. He was also...
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