...1. How well is Jones Electrical Distribution performing? What must Jones do well to succeed? Jones Electrical is performing well. The company is not a smaller company that had a net income of around $30,000 with net sales of around $2.4 million. Although the company is not to large they have continued to have growth year after year. Recent forecasts show sales might begin to slow down. The success of the company will depend on doing what the company is doing currently since they have continued to grow. Selling electrical devices is an extremely competitive market. The company has been able to build up high sales volume through cheaper pricing than its competitors and through a strong sales force. The company has also been able to keep prices down by maintaining a strict budget with tight control over operating expenses, including paying its sales team on commission and keeping overhead low. Financing is another key in a business and is a large factor that will determine the success of Jones Electrical is their financing. Jones Electrical needs to take out larger loans in order to build up inventory and increase sales. Also by taking loans the company is able to take advantage of the 2% purchase discounts that its manufacturers provide. The company’s financials show that with an increase in its line of credit the more sales it has, resulting in growth and a higher net income. 2. Why does a business that has a profit of $30,000 per year need a bank loan...
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...Jones Electrical Distribution Nelson Jones is the sole owner and president of Jones Electrical Distribution. Jones is experiencing a shortage of cash, which is needed to sustain anticipated growth in sales for the coming year. The company is in need of a new bank relationship because its current lender, Metropolitan Bank, is unwilling to provide Jones with the proper loan amount to maintain growth. Jones is introduced to Rachel Montrose, the relationship officer at the local branch of Southern Bank and Trust. Montrose discusses the possibility of extending a line of credit to Jones up to a maximum amount of $350,000. After being inspected by the credit department of Southern Bank and Trust, Montrose sets out the standard covenants applying to the loan. If Jones decides to enter into a deal with Southern Bank and Trust, then he must severe his relationship with his previous lender, Metropolitan Bank. Jones is a sole proprietorship that sells electrical components and tools to general contractors and electricians (ex. Controllers, breakers, signal devices, and fuses). Jones purchases from nearly 100 different suppliers. Jones sales followed the seasonality of its customers’ businesses, which had their busiest time during summer and spring when the weather is ideal for construction work. Its market is large, fragmented, and highly competitive. Jones competes on price and by employing an aggressive direct sales force, often visiting customers on job sites. He relies on tight...
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...Current Position Jones Electrical Distribution (hereinafter Jones Electric) is currently facing an issue with cash flows, which will ultimately affect the overall profitability and growth potential for the company. The owner, Nelson Jones, is diligent in paying his suppliers within ten days in order to capitalize on a two percent early pay discount, but in doing so, has over-extended cash flows. Though the company has been profitable and growing over the past three years, its current lender, Metropolitan Bank, will not increase a line of credit (LOC) beyond $250,000, a LOC upon which Jones has recently fully drawn. In order to ease the tensions of depleting cash reserves, Jones is seeking a higher LOC from another lender, Southern Bank & Trust (SB&T). A higher LOC will not only cover overhead expenses and take advantage of early pay discounts, but could also be invested in the continued growth of sales, as well as, potentially opening new locations. After weighing his options, Jones is convinced that he has to take on more debt in order to keep the business moving forward. Thus far, Jones is only contemplating one financing option, a higher LOC from SB&T. The terms of LOC are not favorable when weighed against Jones’s objective to grow the business. SB&T will limit the drawable amount, control investments in fixed assets, and control Jones’s withdrawal of funds from the business. As such, Jones needs to reconsider SB&T’s offer and consider other financing options...
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...1. Overall, Jones Electrical Distribution had an increase in ROE from 2004 to 2005 and right after it started slowly decreasing in 2006 until its steep drop in 2007. The primary reasons for this sluggish performance is primarily due to a drop in operating efficiency and asset use efficiency. In order to measure operating efficiency, profit margin was used. Starting in 2004, profit margin was at 0.85%, peaked at 1.50% and fell to a trough at 0.78%. In order to measure asset use efficiency, total asset turnover was used. As can be seen, asset usage saw an improvement from 2004 to 2005. This, however, deteriorated slowly through 2006 and greatly in 2007. Jones’ financial leverage did not vary much throughout the span of the analysis. It ranged between 3.19 and 3.49. What this tells us is that their debt levels remained relatively stable. For Jones to succeed, he must keep up the good work offering a competitive price, fostering his aggressive direct sales force who visits customers at their job sites to fully understand their needs. In addition to this, he also needs to maintain tight control over operating expenses, stop discounts and keep using his model to forecast customer demand, which enabled him to better manage his inventory. The need to stop taking discounts is because it leaves Jones cash strapped. 2. A reason why a profitable business like Jones Electrical Distribution might need a bank loan is because it might find itself short of cash at a time when it anticipates...
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...Jones Electrical Distribution Introduction Jones Electrical Distribution is an Electrical company which has predicted that sales for the company will increase. However, over the years the company has experienced some difficulties in its cash flow and decided that in order to keep the company in operation, it was evident that additional financing would be needed in the form of a loan. However, the loan limit for borrowing could not have exceeded $250,000.00. This amount was the maximum limit their local bank, Metropolitan would offer to any company. It must be pointed out that from the inception of Jones Electrical, Metropolitan Bank was the only financial provider used by the company. In light of the foregoing, Jones had to seek alternative financial assistance from another bank - Southern Bank and Trust. The credit line offered Jones Electrical a loan would be in the amount of $350,000.00, $100,000.00 more than what Metropolitan would have offered. Jones Electrical needed to decide which loan will be more beneficial, less risky and the least expensive for the company. They needed to consider the proposition of receiving the loan from Southern Bank Trust as opposed to remaining with Metropolitan Bank. Another issue arising from the case is the way in which Jones Electrical did its operations. He had over 100 suppliers from which he credited inventory, and he paid his accounts within the 10-day period in order to benefit from a 2% trade discount. The industry being large, fragmented...
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...4179 APRIL 6, 2010 THOMAS R. PIPER JEFFREY DEVOLDER Jones Electrical Distribution After several years of rapid growth, in the spring of 2007 Jones Electrical Distribution anticipated a further substantial increase in sales. Despite good profits, the company had experienced a shortage of cash and had found it necessary to increase its borrowing from Metropolitan Bank—a local onebranch bank—to $250,000 in 2006. The maximum loan that Metropolitan would make to any one borrower was $250,000, and Jones had been able to stay within the limit only by relying very heavily on trade credit from the manufacturers from whom Jones purchased the electrical products it sold to its customers. Nelson Jones, sole owner and president of the company, was therefore looking elsewhere for a new banking relationship that would allow him to negotiate a larger loan. Jim Lyons, a homebuilder who was a friend of Jones, introduced Jones to Rachel Montrose, Lyons’s relationship officer at the local branch of Southern Bank & Trust—a large, regional bank. Southern had a 7-year relationship with Lyons, including a current loan balance of over $3 million. Jones and Montrose tentatively discussed the possibility that Southern might extend a line of credit to Jones up to a maximum amount of $350,000. Jones thought that a loan of this size would more than meet his needs for at least the next year, and he was eager for the flexibility that a line of credit of this size would provide. After discussion, Montrose...
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...------------------------------------------------- Jones Electrical Distribution In the past several years, Jones Electrical Distribution is profitable, but it is in the condition of cash shortage. With its 2007’s sales go up, Jones need borrow more money to help its rapid development. Then he got a maximum line of credit $350,000. With our analysis report, we help Jones to choose whether to take advantage of 2% trade discount, we can observe that Jones’credit line will be $318,000 without discount, not $387,000 with this 2% discount. Problems Statement Jones Electrical Distribution’s current condition is not only cash shortage but also under rapid sales grows’ effect. Why this profitable firm needs to increase its borrowing, what kinds of strategies Jones Electrical Distribution will choose, and what his estimate of the loan needs is. These are the problems we will talk about bellows. Data Analysis 1. According to the balance sheet and sources and uses statements (appendix 1), we can see that the line of credit payable increases every year, because Jones needs more and more funds to support the needs of working capital and invest to long-lived assets such as plant, property and equipment to support higher sales levels. We can see that Jones used its profits (changed in Net Worth), cash and short-term debt to support the needs of working capital and the increase of inventory (probably to support higher sales levels). The reduction in long-term debt is a use of funds because Jones is repaying a loan...
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...Jones Electrical Distribution ------------------------------------------------- Jones Electrical Distribution In the past several years, Jones Electrical Distribution is profitable, but it is in the condition of cash shortage. With its 2007’s sales go up, Jones need borrow more money to help its rapid development. Then he got a maximum line of credit $350,000. With our analysis report, we help Jones to choose whether to take advantage of 2% trade discount, we can observe that Jones’credit line will be $318,000 without discount, not $387,000 with this 2% discount. Problems Statement Jones Electrical Distribution’s current condition is not only cash shortage but also under rapid sales grows’ effect. Why this profitable firm needs to increase its borrowing, what kinds of strategies Jones Electrical Distribution will choose, and what his estimate of the loan needs is. These are the problems we will talk about bellows. Data Analysis 1. According to the balance sheet and sources and uses statements (appendix 1), we can see that the line of credit payable increases every year, because Jones needs more and more funds to support the needs of working capital and invest to long-lived assets such as plant, property and equipment to support higher sales levels. We can see that Jones used its profits (changed in Net Worth), cash and short-term debt to support the needs of working capital and the increase of inventory (probably to support higher sales levels). The...
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...Devin Carr Cases in Finance 9/13/11 Jones Electrical Distribution In the case of Jones Electrical, after running pro-forma financial statements for the year 2007, Mr. Jones should forgo taking the trade discounts. Although it would seem advantageous to pay suppliers within the discount period (2/10/net 30), the amount of capital required is beyond the capability of the business and the extent that Southern Bank & Trust was willing to provide. As it can be seen from Exhibit 1, the amount of external finance needed to take the discounts equates to $389,000; Southern Bank & Trust was only will to extend of line of credit to the amount of $350,000. After forecasting the remaining three periods of 2007 it seems that Jones Electrical will be more profitable than the prior year. However, after further analysis of the company it becomes apparent there are several issues facing Mr. Jones. First, is the issue of incredible narrow margins. By the nature of the business, Jones Electrical is in the position of the middleman – providing a general store for contractors and electricians. Due to the circumstances, in the competitive market that exists Mr. Jones must utilize low prices to gain market share. Therefore, even though sales grow by 20.4% in 2007 his net margin is 1.35%, up only 0.01% from 2006 (as seen in Exhibit 2). The concern becomes, where is the money going if it is not trickling through the Income Statement from sales to net income? The answer lies...
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...Jones Electrical Distribution Electric Suppliers Finance Essay Introduction Jones Electrical Distribution is an Electrical company which has predicted that sales for the company will increase. However, over the years the company has experienced some difficulties in its cash flow and decided that in order to keep the company in operation, it was evident that additional financing would be needed in the form of a loan. However, the loan limit for borrowing could not have exceeded $250,000.00. This amount was the maximum limit their local bank, Metropolitan would offer to any company. It must be pointed out that from the inception of Jones Electrical, Metropolitan Bank was the only financial provider used by the company. In light of the foregoing, Jones had to seek alternative financial assistance from another bank - Southern Bank and Trust. The credit line offered Jones Electrical a loan would be in the amount of $350,000.00, $100,000.00 more than what Metropolitan would have offered. Jones Electrical needed to decide which loan will be more beneficial, less risky and the least expensive for the company. They needed to consider the proposition of receiving the loan from Southern Bank Trust as opposed to remaining with Metropolitan Bank. Another issue arising from the case is the way in which Jones Electrical did its operations. He had over 100 suppliers from which he credited inventory, and he paid his accounts within the 10-day period in order to benefit from a 2% trade discount...
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...Mr. Jones, A recent evaluation of Jones Electrical Distribution has occurred in request of a loan. An assessment of the company’s financial health shows that it is profitable. The shortage in cash flows regards managerial attention. Since Jones opened in 1999 the company has seen rapid growth in a highly competitive field. General contractors and electricians have preferred Jones for their business. The request for this loan also has occurred at the end of March; past patterns show that your company is seasonal, with most sales occurring in spring and summer months. Previously stated facts estimate that sales will gradually increase. If managed properly Jones has potential to develop, grow, and add additional sites in the future. Internal and external references about Jones engineering have been beneficial in consideration for a loan. II. Problem Statement Recently the continued growth in sales has raised accounts receivable and inventories considerably. This decrease in inventory turnover has caused accounts payable to rise due to heavy reliance on credit from suppliers. There are many ways in which you can lower the size of the line of credit needed. Good management can lower the credit line needed by lowering the inventories and accounts receivables, which grew in 2005 and 2006 because Jones is trying to increase production and growth by pushing the products to the customers. In 2003 Nelson Jones was involved in an argument with his partner Dave Verden and...
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...JONESTOWN- JIM JONES Jonestown- Jim Jones Student: Thi Nguyen Grand Canyon University: General Psychology- 102 Date: 08-19-2012 Professor: Jennifer Jones Jonestown- Jim Jones The tragedy named Jonestown happened in the past over 30 years and it still has been suspense from the bottom of the heart of everyone. Jim Jones is known as a American leader culture, is one of the most popular historian of America and Guyana’s history as well as the world’s history (Wilkinson, B, 2011). There are many books, articles, video clips described, discussed as well as argued about Jim Jones and Jonestown event. In this research paper as known as a social psychology essay , one more time, I would like write, persuasion, and argue about Jim Jones and what his had done in the past. Furthermore, the paper will describe and discuss in detail about Jonestown events and other concerned that related to this event which gave shock to American society, Guyana, and the rest of the world. Who is Jim Jones? First of all, I would like to introduce about him as well as his life. Jim Jones is a son of James Jones who had a poor health by poisonous gasses in the World War One; and he was a son of a woman named Lynetta in a factory in Indiana. Jim Jones learned from his Mom that he should love animal and care for the people who have underprivileged; and she expected that her son would come a ministered when he grow up. Even though Jim Jones was a noisy child...
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...Tahzma Wicker Ms.Pescia British Literature 29 October 2015 Unit 1 Essay: Evil in Literature Evil has taken over the world. It is a cynical type of way of expressing yourself. Evil is profoundly immoral. The concept is universal. It is one thing that most of the human society have in common. Evil can come from within a person’s soul, the hatred towards another, and the jealousy a person feels. One source of evil can come from a person’s soul. “By the pricking of my thumbs, something wicked this way comes.” (Macbeth, III, I, 44-45) When one of the witches says that something evil is coming then Macbeth enters the room is the witches feeling the evil in their soul. Jim Jones said “To me death is not a fearful thing, it’s living that’s cursed.” (Jones, p. 2) Basically if you have a bad feeling about something 9/10 it’s going to become true especially if it is a bad feeling. Another source of evil is the hatred people have towards another person. “Out damned spot! Out. I say!” (Macbeth, I, I. 25) That is a quote spoken by Lady Macbeth, she is mad because her guilt is taken over so she is mad at herself. Another quote spoken by Lady Macbeth “What’s done is done.”(Macbeth, III, II. 8-12) meaning that she wants Macbeth to be king so bad that she doesn’t want to look back on the past. Certain characters have so much hate towards another that their willing to do the most demented thing to show vile. The jealousy a person feels can also be a root of evil. In the play Macbeth...
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...After reading Nickel and Dimed by Barbara Ehrenreich and watching the documentary Roger and Me, it’s easy to compare the desperation the people seem to have in both of these circumstances. Barbara Ehrenreich wrote Nickel and Dimed to demonstrate the desperation of the jobs that an unskilled worker has. Millions of Americans work for poverty-level wages, and one day Barbara Ehrenreich decided to join them. She was inspired in part by the rhetoric surrounding welfare reform, which promised that any job equals a better life. But how can anyone survive, let alone prosper, on $6 to $7 an hour? Erenbeich decided to find out by actually living the life that people would have under these circumstances. She traveled to three different cities in which to work. The first was Florida, the second Maine and the last Minnesota. To make everything realistic she spent only money from her wages and nothing from her savings. While there, she lived in the cheapest housing and accepted work as a waitress, hotel maid, house cleaner, nursing-home aide, and Wal-Mart salesperson. She also found out that even the humblest livelihoods require strenuous mental and physical effort.. In a capitalistic society, where "unskilled workers" struggle to make ends meet, big companies continue to exploit their labor. The idea of reification also plays well into this story, where the amount of money received in wages is not an equal representation of the worth produced by the laborer, and the laborers act as if they...
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...[pic] Author: Gail Jones Title: Dreams of Speaking Publisher: Vintage, 2007, Surrey (Great Britain) Gail Jones is an Australian writer and academic. She was born in 1955 in Harvey, Australia. She is currently a professor at the University of Western Sydney. Alice could be seen scribbling away, a cup of coffee before her , trying to render the world in prose, trying to unlock with words the complicated inside of things..." (Jones, 2007, 47) This quote is perfect to explain and even help picture what was going through Alice's mind. Poetry behind machines, technology and modernity in general. I decided to begin with it because this simple mix of words was what made me continue to read the book and it sums it up pretty well. The first few chapters focus on Alice's childhood, her family and her love story with Stephen. Obviously, this was useful to give some insight about the main character's personality and background. In the middle of the text there are some parts where the story stops momentarily and some remarks are made by Mr. Sakamoto, Alice or the author herself. This happens throughout the book and it can help or difficult the task of reading it depending on the perspective. I found it interesting and annoying at the same time. Further ahead, she meets Mr. Sakamoto. An elderly man from Nagasaki. Now this is when the book really begins for me. He was writing a biography about Alexander Graham Bell, the inventor of the phone. They got along really...
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