...Reader heading: Jaguar F-Type The Clarkson Review: Jaguar F-Type S (2013) It’s a Hard Life English 102-034 January 27, 2015 Abstract The Jaguar F-Type, Jaguar’s first sports car since the E-Type died off in the early 70’s. Jaguar’s idea of the F-Type has been around since the late 90’s, but never followed through, but now it’s here. Considered to be one of the best sports cars on sale, the F-Type has overwhelmed the media and has convinced consumers it is ready to take down its competitors. Originally released as a roadster only, the F-Type has spawned many variants since its launch in 2013. The F-Type has won numerous awards and has shown the world that Jaguar through style, performance and value still knows how to build a true sports car. Article Summary In Jeremy Clarkson’s article, “The Clarkson Review: Jaguar F-Type S (2013) It’s a Hard Life”, written in the Sunday Times Driving, Clarkson talks about the F-Type and what he thinks of it. In his article, Clarkson begins by talking about the last sports car Jaguar produced, the E-Type. He talks about how when world famous singer Frank Sinatra first saw the E-Type, he said, “I have to have this car, and I have to have it now”. He also talks about how when the E-Type first came out, people didn’t car that buying a “Made in Britain” sports car from those days, meant that you would arrive in a cloud of oil and steam. Clarkson then exclaims, that “history has repeated itself with the F-Type”. He tells us...
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...expense on these loans is only making the matters worse. Based on our Proforma calculations, we think that in 1996 Clarkson needs loan amount of approximately $ 1,235,000 (i.e. around $ 1.24 M) which is 65% higher than Mr. Clarkson’s estimate of $ 750,000. Even though this may not cure all the current problems at Clarkson, this will help provide much-needed immediate liquidity. By comparing sustainable and actual growth, we found that Clarkson has been growing significantly above its sustainable growth rate and also observed that the difference between sustainable and actual growth is in excess of 40-45% range during 1994 and 1995. Based on pro forma calculations, we can infer that the difference between the actual (22%) and sustainable (19%) sales growth will come down in 1996. We think that increasing product prices is the most optimal option for Clarkson right now in order to bring down its actual sales growth rate. Other option which Clarkson should consider is profitable pruning of its business and if none of these two options yield any favorable results, then the final option should be to seek a partner for merger or get itself acquired by another company, which can provide Clarkson the needed cash for growth. Detailed Financial Analysis 1. Why is Clarkson short on funds despite its record for profitable operations? The two major reasons that Clarkson is short on funds despite its profitable operations are the...
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...There are a couple of reasons for Mr. Clarkson wanting to increase the amount of borrowing that would be needed to continue with his operations. One of the reason is that he wants to pay off Mr. Holtz in order for himself to become the primary owner of the company. Another reason for the need to borrow funds is that the net income was growing at a slower rate than the operating expenses. Between the years of 1993-1995 the net income only rose from 60k, 68k, 77k thousand respectively. The operating costs for the 3 years rose from 622k, 717k, 940k thousand respectively. Mr. Clarkson needs to take out a loan so he could increase the purchasing power for goods. This would be accomplished by Mr. Clarkson having liquid cash to use for prompt payment, which will lead to aquiring trade discount and then Mr. Clarkson will have a competitive advantage in terms of buying power. The financing needs of the past have been met by taking a term loan of $399,000 that was fixed by the assets the company had. Mr. Clarkson had control liabilities that were offset by the increase in Based on the pro forma balance sheet and the pro forma income statement, Mr. Clarkson would need $750,000 loan. This would be justified in terms of using the following formulas, which is derived from the 1996 Pro Forma Balance Sheet (figures are in thousands): Total Assets - Total Liabilities - Net Worth 2179 - 533 - 1395 = 251. Following the 251 that would be needed to aide in reaching the goal of $5.5 million is $399...
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...COMM 371, Lecture 6 COMM 371, Lecture 6 Lecture 6: Financing Growth – The Clarkson Lumber Case Outline for Today (Clarkson Lumber) • Case objectives • Understand what drives the need for cash: Clarkson needs cash, but has a good record of profitability • Evaluate Clarkson’s loan requirements and ability to repay • Link the short-term financial plan to evaluating the firm’s long-term goals • Practice basic skills in financial analysis • Review facts of case • Construct statement of cash flows • A closer examination of working capital • Analysis of fixed assets • What factors contribute to a need for cash? • Evaluating the “financial strength” of Clarkson • Clarkson’s sustainable growth rate • How much does Clarkson pay for AP financing? • Evaluate Clarkson’s need for bank financing and ability to repay • Long-term strategy Case Facts • Rapid growth in business 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 currently at the limit of its current bank borrowing ($400,000) • How quickly has Clarkson’s borrowing escalated? • Bank 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 purchase of Holtz’s stake. • Growth in NWC requirements • So far: forced to forego trade discounts and rely on bank borrowing. Current bank now requires collateral, so explore...
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...Drinking is good for you” “Binge Drinking is good for you” is a column written by Jeremy Clarkson. The column was first published on September 2nd 2007, in the British newspaper “The Time”. In the column Clarkson attacks the “busybodies” who are dictating how people’s life should be. He especially dislikes how they tackle the drinking problem. What is the different between drinking for fun once in a while and drinking all the time? That is one of the issues Jeremy Clarkson discus in this column. The sender of this column is Jeremy Clarkson, who is also co-host in the TV-program Top Gear. The column was published in The Times which is a daily newspaper. The topic of the text is that Jeremy is really dissatisfied about how the authority, he call them busybodies, are trying to control how people should and shouldn’t live their lives. He mainly uses the example alcohol. The ideal receivers of the text are these busybodies. He wants them to leave the normal people alone and concentrate on people who have a real problem. The actual readers of the column are the readers of The Times, who most likely are grown-ups and also drinks from time to time. Jeremy Clarkson claims that binge drinking is good for you. His data for this claim is that when you are binge drinking you are a lot more relaxed, able to have fun and forget you stressful everyday life, and he believes that that is good for you. Clarkson tells about his experience of drinking on a vacation and he uses his experience as...
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...Clarkson Lumber Company 1. Clarkson Lumber Company was founded in 1981 and is owned by Keith Clarkson. The company is a retail distributor of lumber products in the growing suburb of the Pacific Northwest. Through competitive pricing and limiting operation expenses, the company has experienced consistent growth and anticipates substantial increases in sales in the coming years. Sales fluctuate to some degree with the health of new housing construction but the company’s high percentage of sales in the repair business have protected the company from economic downturns. Despite the health of the company, Mr. Clarkson is seeking to increase the company’s borrowing. Clarkson Lumber Company is experiencing a shortage of cash as a result of an increase in accounts and notes payable over the last two years. In 1994, Mr. Clarkson bought out his partner, Henry Holtz, for a $200,000 note. The note was to be paid off in 1995 and 1996 and it carried an interest of 11% that consisted of semi-annual payments of $50,000 beginning June 30, 1995. Additionally, Mr. Clarkson was unable to capitalize on purchase discounts of 2%, if the payments were made within 10 days, but luckily suppliers did not seem to mind if payments lagged beyond the 30 day agreement. The buyout of Mr. Holtz and the increase in working capital from expanded sales limited his ability to take purchase discounts and increased his accounts and notes payable. As we can observe from the company’s balance sheet, the total...
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...Clarkson Lumber Company Case : Assignment, Due October 4 1. In your group, assign a Team Administrator, a Notekeeper, and a Number Cruncher(s). These do not need to be independent roles (the Team Spokesperson may be the Number Cruncher, etc.). 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. a. The Team Administrator keeps the group on track to ensure that the discussion is on topic without venturing out of scope for this case. The key here is to develop an attractive solution in a relatively short period of time. b. The Notekeeper is capturing the group’s thoughts on paper to be used to develop a cohesive solution. This is very important so that no essential components of dialogue are lost during brainstorming. c. The Number Cruncher(s) will work through financials based on the proposed short-term financing. The financial results produced by this individual(s) will play a predominant role in determining the group’s proposal. You should use your best judgment for projections. 2. The case should be approached in a stand-alone fashion. There is no need to go looking for supporting data. You may make assumptions as appropriate. 3. You will need to: Be prepared to present any portion of the case orally (no need for slides) For the written report, follow this guideline but be sure to organize the report in story...
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...Case Write-up #1 Clarkson Lumber Company Background Clarkson Lumber Company (CLC) is a successful finished wood products company with a promising future, yet needs to apply sound managerial financing policies to continue to be competitive in this market. The sole owner, Keith Clarkson, is dedicated to his profession and has a good reputation among his suppliers and customers. CLC's sales have been consistently growing over the past several years, rising 19% from 1993 to 1994, 30% from 1994 to 1995, and are expected to rise 21.7% in the current year, 1996. The company's products are in demand in the growing Pacific Northwest metropolitan area where they are located and are somewhat protected from the effects of economic downturns in construction because the company's core competencies are associated with the repair business. The NAICS code for CLC is 3219110-wood window and door manufacturing. This industry is comprised of over 1000 firms with a combined revenue of over $8 billion. In order to remain profitable in this industry, a successful firm must rely on efficient manufacturing processes and distribution networks. The company's existing strategy relies heavily on trade credit and short term debt to finance organic growth. CLC’s current lender, Suburban National Bank, will not lend more than $400,000 and the company will not be able to meet expected sales demand without additional financing beyond this amount. Additional funds needed (AFN) is calculated...
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...Clarkson Lumber Company Case Assignment : Due Oct 3 1. In your group, assign a Team Administrator, a Notekeeper, and a Number Cruncher(s). These do not need to be independent roles (the Team Spokesperson may be the Number Cruncher, etc.). 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. a. The Team Administrator keeps the group on track to ensure that the discussion is on topic without venturing out of scope for this case. The key here is to develop an attractive solution in a relatively short period of time. b. The Notekeeper is capturing the group’s thoughts on paper to be used to develop a cohesive solution. This is very important so that no essential components of dialogue are lost during brainstorming. c. The Number Cruncher(s) will work through financials based on the proposed short-term financing. The financial results produced by this individual(s) will play a predominant role in determining the group’s proposal. You should use your best judgment for projections. 2. The case should be approached in a stand-alone fashion. There is no need to go looking for supporting data. You may make assumptions as appropriate. 3. You will need to: Be prepared to present any portion of the case orally (no need for slides) For the written report, follow this guideline but be sure to organize the report in story format...
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...Clarkson Lumber Case Analysis Why has Clarkson Lumber borrowed increasing amounts despite its consistent profitability? 1. Cost of Goods Sold: Even though profits have been consistent, they have not increased sufficiently. The NPM has remained close to 2%, and COGS has remained around 75%, keeping profit margins low (See Appendix Exhibit 3). Therefore, operating expenses and COGS have increased at a quicker rate than net income. Additional funds are required to not only maintain the company’s current growth rate with expected sales of 5.5 million, but also to increase purchasing power for goods. 2. Use of Cash: In addition, Mr. Clarkson bought out his partner, Mr. Holtz, for $200,000 in 1994. Mr. Holtz took a note for $200,000 to be paid off in 1995 and 1996 with interest rate of 11%, repaid in two semi-annual installments of $50,000 beginning June 30, 1995. The terms of this note are not conducive to the current cash cycle of Clarkson Lumber. He is required to pay the note in too short of time in comparison to his revenue. Mr. Clarkson also used his cash to invest in working capital (see #3) associated with the company’s increasing sales volume. This prohibited him from taking advantage of the trade discounts, which would have decreased cost of sales. 3. Asset Purchases: Clarkson Lumber had made a significant asset purchase in 1995, totaling $126,000. This could have been for the purchase of additional property to support the continued sales growth, however due to the small...
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...MEMO RE CLARKSON LUMBER TO: President, Northrup National Bank FROM: George Dodge Loans Officer, Northrup National Bank Clarkson Lumber Company is owned and operated by the hardworking, 49-year-old Mr. Clarkson.With relatively low operating expenses, operated by a small number of staff and a strong management. Clarkson Lumber is a company experiencing rapid growth with an anticipation of a further increase in sales. However the company has constant cash flow problems. The financial ratios in appendix III look poor due to their current state of under financing. Why is the Clarkson Company so short of funds despite its record of profitable operations? See Appendix I, II&III. We find that increasing amount of borrowing despite of its onsistent profitability came from following reasons. First is the firm’s financial position. As sales have increased by 55% from 1993-1995, the assets that support increase of sales increased by 78%. The increase amount of assets is over the amount of net income (addition to net worth). To meet financial needs, the company received short-term loans from bank, $60 in 1994 and $390 in 1995. The net profit margin and operating expenses ratio have been stable over three years, however, interest expenses has increased almost 1.5 times. The firm’s current ratio deteriorated again and as a result, the firm has experienced the shortage of fund regardless of its consistent profitability. Second is the amount of note payable against Holtz. Mr...
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...Mr. George Dodge, Clarkson Lumber Company is doing well but there is the issue of whether or not there is too high a risk in granting the request for the $750,000 line of credit. There are many supporting strong points but it also has some problems to work out. This is a company that has many good characteristics and looks promising but needs the extra money to pay off loans, inventory, and supplies. I recommend this company to receive the line of credit. Looking at the individual ratios seen in exhibit 1 and comparing it to the industry average shown in exhibit 2 gives a sense of where this company stands. Current ratio and quick ratio are really low and have been decreasing. For 1995, the current ratio is 1.15:1, which is less than the industry average of 1.60:1, however to give a better sense of where this stands in the industry, as seen in exhibit 3, it is actually less than the average of the bottom 25% of the industry. The quick ratio is 0.61 is less than the industry is 0.90. Both these ratios serve to point out the lack of cash in this company. 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. Also, the company couldn’t go over the $400,000 loan limit, so they were forced to stretch their cash. Return on sales is decreasing and is below the industry average, but the goods news is that sales and profits have been increasing each year. However, costs of goods are increasing...
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...ENTERTAINMENT SPORT MONEY LIFESTYLE HEALTH & FITNESS FOOD & DRINK TRAVEL CARS VIDEO TOP STORIES new caption PM: Farage's call to scrap race laws 'deeply concerning' The Independent Australia's 'Jihadi Jake' In Suicide Attack Sky News new caption Two police officers shot in Ferguson Sky News new caption Who could replace Jeremy Clarkson on Top Gear? Motoring Research CAR CRASH CLARKSON: 5m viewers, 214 countries, three Stigs: Top Gear in numbers Motoring Research BBC faces multimillion-pound bill from Jeremy Clarkson suspension The Guardian Jeremy Clarkson is 'huge talent' says Cameron Sky News new caption Gigi Hadid: Who is fashion's newest 'It' girl? PLUS-SIZED ANIMALS new caption Massive 13ft alligator spotted on Florida golf course The Independent new caption Giant lobster ancestor was once Earth's biggest animal The Verge new caption Chelsea branded '11 babies' and 'pathetic' after defeat The Telegraph MORE CHAMPIONS LEAGUE: Champions League in pics: Chelsea fan Clarkson spotted...
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...to see that author didn’t treat article as seriously as it needed to be treated; his use of sarcasm belittles and demeans what the majority of people find an important environmental issue. However, I wanted to point out that every single bit of the article is rude. Even the title is creating a negative tension. “Stuff” – this word makes reader think to stop caring about this issue and just fill the tigers with stuffing once dead. “Long live extinction” – these words tease the reader with contradiction, and makes them think that everything is going well and extinction is impossible. I think that the use of this language in the title shows that the author is trying to manipulate the reader by making them agree with him through humour. Mr. Clarkson is not showing the whole picture of the problem of extinction. The reader thinks that everything is going well, and people have time to change it. However the problem of extinction is serious, and people should think about it now, because in the future it will be too late. As it was written in the article, tigers provide business; example for it is “demand for illegal tiger parts is booming”. I can agree with the fact of people need money to feed families, clothes and shelter themselves to survive. But I want to argue with this...
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...current expansion rate. Mr. Clarkson’s decision today is whether to expand and, if so, how to raise new funds. Answer: The loan requirement of $750,000 would be dependent on how Mr. Clarkson uses trade credit as a source of funds. If they don’t take advantage of the trade discount and sell $5.5 million and their % of sales were to remain same for the rest of the items in the balance sheet, they would have more than $298,000 increase in uses of cash. This is not including the previous $399,000 that they have outstanding on the previous line of credit from Suburban bank. If you subtract, you can see that he will already use $697,000 out of their $750,000. Consequently, if they grew at the same rate, they would blow through the $750,000 line of credit too. As Mr. Clarkson’s advisor, I would advise him to 1. Reduce his liabilities and debt before accruing more and being consumed with payments and interest payments 2. Set a reasonable stock level to control inventory 3. Mr. Clarkson should consider other forms of financing if he wants to continue at the same growth rate 4. Mr. Clarkson should explore the option of equity financing 5. Mr. Clarkson should also let his brother in law keep his share in the business. This will ease off the financial pressure 6. Mr. Clarkson should have stricter policies on his customers 7. The company needs to think of internal funding through a higher profit retention rate For the banker, until the expansion rate is reduced...
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