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
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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
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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
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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
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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
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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
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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
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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
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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
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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
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