Finance Management: Abington Hill Toys Inc

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CASE 1- ABINGTON-HILL TOYS, INC.

PART I – INTRODUCTION Abington Hill Toys, Inc, a seasonal business that dependent on holiday season, which is a high-risk company that would easily results in costly for company to restore inventories in the non-holiday seasons. In this case, because of no successor due to the death of Lewis Hill, the last founder of the company, and the slowly deteriorated financial condition as Mr. Hill was running the company’s final years, the stockholders decided to recruited and hired Vernon Albright to lead the company. The new president began to seek an assistant comptroller when he took the leadership role because the prior comptroller was incompetence and poor of management that resulted in the poor
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I. Gross profit margin ratio is 25% means that the company is much more efficient in the production and distribution of its product. J. Net profit margin ratio is 5.04% means the company makes 5 cents profit for every dollar it generates in revenue or sales. K. Return on total assets ratio is 10.5% means the company is not good at converting its investment into profit. L. Return on net worth ratio is 8.52% means that the return on shareholders’ funds is 8 cents per dollar. In conclusion, the financial analysis of Abington Hill toys, Inc. shows that the company is not in good standing. However, the it would be able to make a change because it has a new leadership for a new direction.

I would not lend money to this company because this is not a good investment based on the information listed above. In addition, the company has a negative cash flow, which increase the difficulty to borrow money from other bank and

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