sold and means that the firm needs more and more external financing to pay its invoices. Cartwright Lumber Company’s current ratio and quick ratio’s stand by this fact. The Current Ratio is approximately 1,40 (932/690) and the Quick Ratio is around 0,50 ((932-556)/690). The Current Ratio seems to be on an adequate level but the Quick Ratio can be considered to be alarming. This is because the company has such a large inventory. The Quick Ratio is considered to give a more realistic picture of the firm’s
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Your new audit client, Hardwood Lumber Company, has a computerized accounting system for all financial statement cycles. During planning, you visited with the information systems vice president and learned that personnel in information systems are assigned to one of four departments: systems programming, applications programming, operations, or data control. Job tasks are specific to the individual and no responsibilities overlap with other departments. Hardwood Lumber relies on the operating system
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Fact Pattern: Butler Lumber is a retail distributor located in a growing suburb in the Pacific Northwest that sells basic wood products like plywood, moldings, and sash and door products. The company was formed in 1981 by Mark Butler in partnership with his brother-in-law, who Mark then bought out in 1988. The company has experienced significant growth over the past few years, and is expecting to continue to see sales growth in the coming year. Although the company has experienced increasing
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Why the estimated cost of equity is so high? If we use 30 year Are the Forecast stock prices in 2000 right (from 90 to 120)? (3) Are forecast about dividends of GEICO from 1996 to 2000 right or reasonable? (1)Invest on super companies which have competitive advantage in their industry. (2) Margin of safety: the purchase price is much lower than the intrinsic value. (5) Using Discount-Cash-Flow method to calculate the intrinsic value.
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Lorman Lumber Company Case Study 2 Lorman Lumber Company is a publicly traded company located in rural Oregon in the town of Yamica on the Mohegan River. The Lorman Lumber Company is a producer of lumber products including plywood, wood studs and wood chips. Chemicals used in the production process include petroleum based creosote and pentachlorophenol (PCP) solutions that are applied to the wood to prevent moisture loss. The sawmill plant is somewhat outdated but is reasonably efficient and
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Subject: Butler Lumber Company Problem: Butler Lumber Company has been experiencing in the past few years a rapid growth of its sales. However, in order to sustain this growth the company also experienced an increase of its inventory and of its accounts receivables leading to a shortage of cash to finance day to day activities. The company therefore needs to find a way to improve its financial flexibility without extending even more its trade credit. Options: 1. Remain with its current
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Clarkson Lumber company Financial Analysis and forcasting 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
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Clarkson Lumber Company Problem Analysis: According to Exhibit 1, after computing the net profit margin, we can see that since 1993, the return on sales are 2%, 1.96%, 1.7%, which indicate the first problem. The cost of goods relative to the sales was high which caused the return on sales are too low comparing to the industry level, which also means the costs grew faster than the sales. Secondly, according to Exhibit 2, after computing the days sales outstanding, since 1993, they
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Alabama Atlantic would like to determine the optimal shipping routes for its lumber and the amount to be shipped on each route, in order to minimize the total equivalent uniform annual cost. It is my understanding that the company has three sources of wood, with annual availabilities of 15, 20, and 15 million board feet respectively. Additionally, the company has 5 markets it sells to, which have annual demands of 11, 12, 9, 10, and 8 million board feet respectively. Because the estimated supply
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Kemba Chambers December 2, 2013 Ozark Furniture Ozark furniture has 3000 board feet of maple lumber in stock. In order to make classic maple rockers they need 15 board feet of maple lumber. In order to make a modern rocker they need 12 board feet of maple lumber. So we need to process an inequality and graph it in order to be sure that we have enough of the maple lumber in stock to prepare orders. The first step is to define what variables that I will be using in my inequality
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