Análisis del Caso "Clarkson Lumber Company"

The company has been functioning well in terms of generating profit and demand so far. However, there will be a 20% increase in demand for the next month of operations as predicted by management, and the production and supply management's problems may come as a problem they can no longer afford.

We noticed the following financial health indicators in our forecast: Clarkson Lumber's ratio of total assets to sales is moving from a position in line with high profit outlets to low profit outlets at 37.7%. This is due to accounts receivable increasing to 14% of sales which is higher than the 13.7% experienced by low profit ratios. Also, inventory as a percentage of sales has steadily increased from 11.5% in 1993 to 13.5% in 1996.

1. Identify the key problem in the case and explaining why it is the key problem.

Financially 1993 was a record year: FPL’s capital expenditure was expected to decline by 33% over the next five years. Annual sales growth of 3.4% for the past five years exceeded the national average of 2% and was expected to exceed the average again for the next five years (2.7% vs. 1.8%).

Secondary information is collected for this case. This case study limited only one techniques of financial analysis that is Ratio Analysis and also taken a single company. Thus the conclusion of the analysis carried out in a professional manner will be able to correctly describe the evaluation of the company and to substantiate the user’s decisions.

Empirical evidence indicates that capital rationing is prevalent amongst firms. It was concluded that between 50 and 75% of firms operate under the capital constraint as found by Fremgen (1975) and Petty, Scott & Bird (1975). Further support for this notion was found

Lorman Lumber is a publicly traded company with widely held shares. Its Yamica location in rural Oregon is one of the company’s largest. The purpose of the plant is to process and treat wood, which it does through a number of facilities. The Sawmill began producing lumber products in 1947, which it does by peeling, milling, and chipping raw wood. Lorman has a known record of producing good profits, and will often pay out generous performance-based bonuses to executives. Although the Yamica plant is somewhat outdated, it is still considered to be efficient and profitable. Starting in 1968, the company began using new methods to condition and pressure-treat wood products through the

Because they have faced cash shortage trouble. Their profitability has grown for 1993 ~ 1995 period, as we can see from their I/S (e.g. Sales and Net Income, etc.). However, as its business size grows, their A/R increased, which means that it is getting difficult to collect cash. On the other hand, A/P decreased for the same period, which means that the company paid cash for A/P, resulting in critical cash shortage. Furthermore, the A/P payment period is shorter than A/R collection periods, the company’s cash problem happens to be accelerated.

The analysis of a company's financial statements helps in the determination of both the weaknesses and strengths of the concerned entity. Further, such an analysis helps in the determination of the future viability of firms. There are a wide range of techniques utilized in the analysis of financial statements. In that regard, it is important to note that the relevance of a horizontal, vertical as well as ratio analysis of a company's financial statements cannot be overstated. This is more so the case when it comes to the interpretation of the various dollar amounts presented in both the balance sheet and the income statement. In this text, I carry out a horizontal, vertical as well as ratio analysis of both The Coca-Cola Company and PepsiCo, Inc. The analysis' results will be critical in the evaluation of each company's performance. Findings will be used as a basis for recommendations on how each company can improve its financial status.

1. Please conduct a financial ratio analysis using the data in Exhibit 2. How do the results reflect different strategies pursued by the 4 firms?

However, two known authors in this field of study believe that companies with low business risk obtains factors of production at a lower cost which may also pave to the ability of the firm to operate more efficiently (Amit & Wernerfet, 1990). Therefore, many stockholders faced a high of uncertainty; this is because some companies do not have the financial strengths to cover its debts that even may result to bankruptcy.

The company’s debt ratios are 54.5% in 1988, 58.69% in 1989, 62.7% in 1990, and 67.37% in 1991. What this means is that the company is increasing its financial risk by taking on more leverage. The company has been taking an extensive amount of purchasing over the past couple of years, which could be the reason as to why net income has not grown much beyond several thousands of dollars. One could argue that the company is trying to expand its inventory to help accumulate future sales. But another problem is that the company’s

Also, according to its leverage ratios, the company’s debts are not only very high, but are also increasing. Its decreasing TIE ratio indicates that its capability to pay interests is decreasing. The company’s efficiency ratios indicate that despite the fact that its fixed assets are increasingly being utilized to generate sales during the years 1990-1991 as indicated by its increasing fixed asset turnover ratio, the decreasing total assets turnover indicate that overall the company’s total assets are not efficiently being put to use. Thus, as a whole its asset management is becoming less efficient. Last but not the least, based on its profitability ratios, the company’s ability to make profit is decreasing.

The purpose of the report is to understand the capital structure of the chosen company on the basis of the financial statements of the company which includes the income statement, balance sheet and the cash flow statement of the company and do the capital analysis of the company as well to find out the advantages and disadvantages in working capital of the company and suggest company logical and useful ways for growing their economy.

One of America’s largest forest products/paper firms with sales of $6.5Billion in 1983 and a net income of $105 million. The case study revolves around Atlantic Corporation’s intention to add linerboard capacity. In order to achieve this goal, they started looking at viable solutions, including purchasing and acquiring mill and box plants instead of through construction and fabrication of new plants and equipment. This included the possible acquisition of Royal Paper’s “crown jewels”, that is, the Monticello mill and the corrugated box plants.