Clarkson Lumber Company Case Study Essay

The insurance policy issued to hunt did cover fire damage, as most builders risk policies due; however, it also covered almost every other kind of damage that a construction company might encounter as well, and Hunts damages were mostly caused due to water damage. In order for Allianz to call the builders risk policy a fire insurance policy, and subject the policy to have the Plaintiff seek indemnification that was not caused by fire or means covered in a “fire insurance policy”, there are several ramifications involved.

Based on my full ratio analysis, the first reason would be due to the ratio of rate of return on net sales. The rate of return on net sales for the current year 2011 is 2.4% compared to the previous year 2010 is 10.3%. There is a decreased difference of 7.9% ratio which is an indicator that the company's operational efficiency is fragile.

To that end, in 1898, Darrow accepted the defense of Thomas I. Kidd of the Amalgamated Woodworkers’ International Union. Kidd was charged with criminal activities related to his strike organizing efforts at the Paine Lumber Company in Oak Brook, Illinois. Specifically, Kidd was charged with criminal conspiracy to interfere with the business of the lumber company by organizing a strike. In exchange for the AWIU agreeing to publish his closing argument after the trial, Darrow accepted the case for a lower fee (Farrell, 2011).

1. Productivity of the crew would be below standard. I believe for the productivity to be below standard because they were sent to this crew because of their lack of work. Just because they have been assigned to another crew, does not mean that they will begin to work well right away. When compared to the Equity Theory, I believe there to be positive inequity for the three men assigned to the new group. For being assigned to the group due to lack of work, it is unfair to have a higher pay grade than those who have been in the company for a longer period of time and who are doing their job correctly. This may cause issues with subprofessionals being motivated to work to their full

The cash flow situation started falling from the end of year 12. The company should have known from this.

The company’s day-to-day operations did not change significantly over the last few years. Average collection period, inventory turnover, accounts payable, accounts receivable as well as cash conversion cycle all went up and down over the last four years but mainly stayed in the same range. So, there is no any significant change in operations. Mr. Cartwright has a very sound control over operations of the firm. Therefore, I believe, the company needs few more years to recover from the debts

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.

The turnover in days has increased by thirty days – adding a whole month to old inventory. The company is still producing at a rate of higher sales and allowing for an overstock of excess inventory piling up within their warehouses. The accounts payable has increased, where the company has tried to extend the days they pay back the liabilities – assumedly to match the increase in their accounts receivable. The company is clearly hoping everyone is on the same page with the lax attitudes towards payments during the economy slump. The cash conversion cycle has increased exponentially – far above the predicted average. The excess inventory in the firm is tying up a lot of the cash and therefore disallowing the ability to move it. Also the slack in AR is contributing to the increase.

What are the main duties of each of the positions that comprise Abernethy and Chapman’s engagement team?

1. Is it unethical for a company to intentionally understate its earnings? Why or why not?

From 1993 through 1995, Clarkson Lumber Company experienced significant sales growth – 19.0% from 1993 to 1994 and 30.0% between 1994 and 1995. Profitability also increased, but not nearly at the same pace as sales revenue. Net income rose from $60,000 in 1993 to $68,000 in 1994 (a 13.3% increase), to $77,000 in 1995 (13.2% increase). This increase in sales and profitability demanded growth in working capital and fixed assets to finance the growth, creating a need for cash that outpaced free cash flow into the firm. Furthermore, Mr. Clarkson’s buyout payments to Mr. Holtz in 1995 and 1996 only added to the liquidity predicament. Thus, Clarkson was compelled to draw upon his line of credit with Suburban National Bank and begin relying heavily on trade credit, quickly maxing out his bank credit line by the end of 1995.

Carlson Companies, a private company known for its existence in marketing, business, leisure travel, and the hospitality industries, has over 180,000 employees across the United States. Carlson Shared Services, the Information Technology (IT) division, provides services to its internal clients and thus must support a wide range of applications and services. In 2002, the IT division decided to implement a storage area network (SAN) that in turn would meet the six (6) goals established in order to meet the needs of a growing company.

How would you access Jack Lawler’s entry & contracting process at B.R Richardson? Would you have done anything differently?

Q3. Does the company have any other sources that it could use to raise the funds it requires? Explain. (In your answer consider the amount required and the purpose of the funds). In which market can these funds be sourced from?

The return on shareholders’ fund, capital employed, total assets all have gone down during this period. The ability of the company to pay its short term debt hasn’t varied much, but the administrative expenses have gone up by a very large amount.