Clarkson Lumber Company Case Study Essay

When the discount rate increases from 15% to 40%, the company faces a 37.3% drop in its total value. The loss will be $5,609,132. the largest difference rate comes from the silver segment. Firstly, the silver segment has the most significant amount of customers. The requirement of being a silver customer is small ( fly with the Northern Aero at least one time). Secondly, each year some of the customers will degrade from the platinum or gold segment to the silver segment. Due to the

In order to expand and remain financially stable, Clarkson Lumber must take advantage of all trade discounts. Exhibits A-1 & A-2 compares the impact to net income with and without the trade discounts.

The company have generated very low operating cash flows, which is caused by a negative net income(16, 55) in 94,95, again with sales going down and cost of goods sold increasing. The company current ratio (2.3, 2.1, 2.5) in 93, 94, 95 are indicating satisfactory but when analyze quick ratio (1.1, 1.1, 1.3), and we also know that sales are down which mean more inventories. Now the account payable days has been increasing (49, 62, and 66). They have been delaying there payment which mean more cash on

DO YOU AGREE WITH MR. WILSON 'S ESTIMATE OF THE COMPANY 'S LOAN REQUIREMENTS? HOW MUCH WILL HE NEED TO FINANCE THE EXPECTED EXPANSION IN SALES TO $ 5.5 MILLION IN 2006 AND TO TAKE ALL TRADE DISCOUNTS?

National Bank of Canada ("NBC" or "the Bank") is tasked with the decision to review Dawson Lumber Company Limited's ("Dawson") request for an increase in its line of credit up to the amount of $10.8mm. Dawson intends to finance inventory and receivables with the line of credit. NBC must remain cognizant of the competitive landscape of the lumber industry and assess whether a focus on the retail segment is beneficial to Dawson's strategic plan. Given that Dawson is one of the region's largest borrowers, NBC must be careful in how it manages this relationship. The Bank cannot afford to turn away NBC's business. However, extending Dawson additional credit may increase Dawson's default risk and jeopardize the potential for NBC

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).

The reason is that the company’s expenses exceeded the revenue. Company’s assets have been increasing compared to last year total assets. There hasn’t been a dramtic change in liabilities because the company doesn’t have enough cash to pay its debt.

1. Based on your knowledge of current and projected economic conditions, does the company’s assumption about future sales sound reasonable to you? Why or why not?

Gareth Davies is a forest ecologist at the Forestry School in Fredericton, New Brunswick, he has been in the forest industry for over 20 years. He recently stated that there are three main categories of land in Canada, the vast majority is provincial land, next there are lesser pieces of land that are forest research centers, and national parks. and the rest of the land belongs to First Nation communities. According to Davies, ⅔ of the land in the province of New Brunswick is owned by the public, and the remaining ⅓ is privatized. Only a microscopic 5% of the public forest in New Brunswick is protected from thinning and/or herbicide treatment, sadly, the rest is open for spraying. Moreover, this is the reason behind the clear cut location that was visited in Minto and the plantation location that was visited at the UNB woodlot being heavily packed full with needle trees - the areas were being sprayed to rid the area of the broad leaf trees, this is especially costly, also.

The softwood lumber dispute is one of the longest and largest trade disputes between the United States and Canada. The dispute is actually the result of a number of disagreements about Canadian lumber production and import between the two nations. The disagreement began in the early 1980s, when US lumber producers complained to the Commerce about unfair production of Canadian lumber and it is still a talking point in today’s negotiations and a solution for this problem doesn’t seem to be imminent and practical. At the heart of this long-lasting softwood lumber dispute is United States' claim that the Canadian government is unfairly subsidizing Canadian lumber industry and helping them become more competitive and seize a larger

Until 2003, HMI offered lifelong employment. How did this practice affect the company’s ability to staff the organization with managers and employees capable of executing the strategy? How did this practice build the organizational capabilities required for successful strategy execution?

During the mid-1800’s, Frederick Weyerhaeuser and his friend invested just about all their money, earned from previous jobs, into a sawmill located in Illinois. This sparked the start of the flourishing lumber industry. Weyerhaeuser’s early success earned him a lot of money, and learned that Minnesota had a lot of white pine. Eventually, he moved to Minnesota and started his business up again, although before this, he had bought timberland in Wisconsin. With all his work and wealth, the lumber industry had exponential growth. It was very successful.

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.

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