Statement of the Problem At first glance, Clarkson Lumber appears to be a healthy company. However, despite rapid growth and increasing sales Clarkson Lumber finds itself searching for additional funding to compensate for a shortage in cash to fund its expanding business. Clarkson Lumber is in this situation for a number of reasons. The company's inability to receive payments from customers in a timely manner created a severe impact in the company's cash flows. The age of account receivables
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Management – 514 Clarkson Lumber Case Study – 1 Clarkson Lumber, founded in 1981 as a partnership, is a rapidly growing business. The company has relatively low operating expenses and is a fairly profitable outfit. At first look, Clarkson appears to be a well-managed, growing, profitable company. When we dig a little deeper, issues relating to liquidity and financing arise and bring into question the ability for Clarkson to sustain growth. In terms of profitability, Clarkson is fairly consistent
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Executive Summary Clarkson Lumber is a small but rapidly growing lumber company in the Pacific Northwest. Keith Clarkson--sole owner and president--anticipates further sales growth but his business may not be able to keep up with future demand because of a shortage of cash, despite good profits. Currently the company has a line of credit with Suburban National Bank, but the bank would not offer any one customer any more than a $400,000 loan, a limit which Clarkson is bumping up against at $399
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Sau giai đoạn tăng trưởng nhanh trong những năm gần đây, Clarkson Lumber Company, vào mùa xuân năm 1996, kỳ vọng một sự tăng trưởng lớn trong doanh thu. Mặc dù đạt được lợi nhuận cao, công ty đã trải qua giai đoạn thiếu hụt tiền mặt và cảm thấy việc tăng số tiền vay từ Suburban National Bank lên 399,000 USD trong mùa xuân năm 1996 là cần thiết. Khoản vay tối đa mà Suburban Natonal Bank cung cấp cho một khách hàng là 400,000 USD và Clarkson nằm trong giới hạn này bằng việc dựa nhiều vào tín dụng thương
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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
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Date: May 20, 1999 To: Elliott P. Smith From: Burak Alici, Mike Kruger Subject: Clarkson Lumber Background Despite its past record of profits, Clarkson Lumber has borrowed increasing amounts to satisfy the ambitious goals of its owner: Keith Clarkson. As shown in Exhibit 3, Clarkson is attempting to grow faster than its sustainable growth rate, and therefore must rely on external financing. This reliance is exacerbated by Mr. Clarkson’s simultaneous buyout of his former partner, Mr
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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
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Financial Analysis and forcasting Monica fernandes som 101 November 9, 2004 Prof. Pierre du jardin 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
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Thursday, January 19: Clarkson Lumber Company Reading: Note on Financial Analysis a. How is the company's financial performance? (Examine appropriate financial ratios.) b. Why has Clarkson Lumber borrowed increasing amounts despite its consistent profitability? c. How has Mr. Clarkson met the financing needs of the company during the period 1993 through 1995? Has the financial strength of Clarkson Lumber improved or deteriorated
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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
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