The issues presented in the Butler Lumber case deal with the financing of growth. The main problem is that the company needs additional financing due to rapid growth and they are trying to decide whether or not to enter into a loan contract for $465,000 with Northrop National Bank in addition to their already $247,000 loan from Suburban National Bank. However, the Suburban National Bank is also deciding if it should lend the money to Butler Lumber. Suburban anticipated sales in 1991 to be $3.6
Words: 695 - Pages: 3
Caso Butler Lumber Company Butler Lumber Company, empresa dedicada a la industria maderera y derivados fue fundad en 1981 y se localiza en el noreste de la costa del pacifico. Para 1991 la empresa enfrenta problemas de liquidez, es decir no cuenta con el efectivo suficiente para cubrir sus obligaciones a corto plazo, a lo largo de los últimos años su deuda con el Suburban National Bank (SNB) ha ido aumentando, esto hasta $247,000 dólares; con el objetivo de contar y disponer con mayor efectivo
Words: 653 - Pages: 3
Finance Butler Lumber I: Butler Lumber’s financial problem is weak net cash flow; too much cash tied-up in inventory and debt obligations, which is reflected in liquidity, asset and debt management metrics. II: Cash flows from operations should exceed, be sufficient, to cover reinvestment in equipment and building. Specifically, expenditures for investment in Plant should exceed the annual depreciation charge. As well, funds from operations should not only be sufficient to invest, but
Words: 746 - Pages: 3
The following is my beginning analysis on Butler Lumber Company and reviewing its Risk, Opportunity, and financial condition on what is wrong and good about this company. I back up my hypothesis based on the following attainable data; Current Ratio = The current ratio is an excellent diagnostic tool as it measures whether or not BLC (Butler Lumber Company) has enough resources to pay its bills over the next 12 months. The current ratio is computed using the following data, Current Assets/Current
Words: 466 - Pages: 2
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
Words: 2087 - Pages: 9
Case #1: Butler Lumber Company Questions 1. Why does Mr. Butler have to borrow so much money to support this profitable business? 2. Do you agree with his estimate of the company’s loan requirements? How much will he need to borrow to finance his expected expansion in sales (assume a 1991 sales volume of $3.6 million)? 3. As Mr. Butler’s financial advisor, would you urge him to go ahead with, or to reconsider, his anticipated expansion and his plans for additional debt financing? As the banker, would
Words: 947 - Pages: 4
FINA 6092 Advanced Financial Management 2014-15 Term 1 Case questions Case #A: Butler Lumber Company Questions 1. Why does Mr. Butler have to borrow so much money to support this profitable business? 2. Do you agree with his estimate of the company’s loan requirements? How much will he need to borrow to finance his expected expansion in sales (assume a 1991 sales volume of $3.6 million)? 3. As Mr. Butler’s financial advisor, would you urge him to go ahead with, or to reconsider, his anticipated
Words: 1115 - Pages: 5
For Cartwright Lumber case: a. Why does Mr. Cartwright have to borrow so much money to support this profitable business? The company does not have enough funds, it has a cash flow problem, and cash from operating activities are negative in the past few years. He purchased the business with debt and is relying heavily on debt financing ever since. AR and Inventory turnover days are too long and that is not effective on an operational stand point. b. Do you agree with his estimates of the company's
Words: 273 - Pages: 2
Advance Financial Management Graduate Business Administration 645 CRN: 11046 Building 163 – Room 2032 Winter Quarter 2013 Wednesday: 6:00-8:50 Paul 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
Words: 3255 - Pages: 14
Introduction Paper has become a major product which is used widely in the modern society. Not only used obviouslyby the publishing industry, paper is also involved in specific product manufacturing like tissue, cardboard, etc. Pulp wood plays a significant role as a fundamental raw material. Back in the last decade, Indonesia as the largest pulp and paper producer in South-East Asia ran this industry based on its 141.4 million hectares tropical rainforest covering. However, serious deforestation
Words: 1898 - Pages: 8
