Financial Analysis

1. Key success factors & company performance…………………………………………………..3 2. Bank perspective regarding the performance…………………………………………………..7 3. Bank financing perspective at the end of 1998……………………………………………….10 4. Management perspective regarding the bank financing………………………………….13 5. Exhibit 1 – Annual Income Statements (1994-1997)………………………………………17 6. Exhibit 2 – Annual Balance Sheets (1994-1997)……………………………………………..18 7. Exhibit 3 – Quarterly Income Statements 1997……………………………………………….19 8. Exhibit 4 – Quarterly Balance Sheets 1997………………………………………………………20 9. Exhibit 5 – Forecasting………………………………………………………………………………………21 10. Exhibit 6 – Annual Ratios………………………………………………………………………………….22 11. Exhibit 7 –

As Mr. Clarkson's financial advisor, we would caution him on expanding his business given the current financial trends and ratios of the company. The investment in inventory and receivables is too high. As a result, Clarkson Lumber's return on assets, return on equity and invested capital are lower when compared to other high profit outlets as shown in exhibit C. Additionally, a significant increase in debt, such as a $750,000 loan, will further reduce the current ratio of the company. Clarkson Lumber could benefit from some changes in its collection policies for

This bank loan helped finance the increase in property and other related assets. The sponaneous assets that were increased as a result of an increase in sales were financed by an increase in sponaneous liabilities. Spontaneous liabilities have grown by 35%, which supports the claim that they finance the increase in accounts receivable and inventories. In the period between 1993-1995, the financial strength of Clarkson Lumber has deteriorated significantly. As seen from the financial ratios excel spreadsheet attached, the current and quick ratios have been gone down substantially. This means that the company’s ability to meet its short term obligations has deteriorated. Furthermore, the return on sales and return on assets have also gone down, which means that their increase in net income has not stayed consistent with the increase in sales and increase in assets to finance these sales. Their falling inventory turnover ratio means that even though their sales are increasing, they are not moving inventory at the same pace they had before. Their low accounts receivable turnover ratio and high dales sales outstanding indicates that there’s a large amount of money tied in this account.

In accounting there is much to be learned, about the financial aspects of a business. In the past five weeks I have learned the importance of financial reports and how they relate to the success of an establishment. These reports may include balance sheets and income statements, which help accountants and the public grasp the overall financial condition of a company. The information in these reports is really significant to, managers, owners, employees, and investors. Managers of a business can take and deduce financial

Fraser, L. M., & Ormiston, A. (201). Understanding financial statements (9th ed.). Upper Saddle River, NJ: Prentice Hall.

Creditors take the biggest risk when lending money due to the fact that they have all the skin in the game and are taking a calculated risk. The review of the three aforementioned financial statements seem to be the clearest way to come to a conclusion about whether or not a creditor should lend a company money.

Butler Lumber Company, a lumber retailer with a rapid growth rate, is faced with the problem of cash flow shortage. In order to support this profitable business, BLC needs a great amount of cash. The loan of $250,000 from Suburban National and a line of credit of up to $465,000 from Northrop National Bank are the two choices provided. After a brief review of the operation and financial conditions of BLC, we first make analysis of the credit level of BLC from the perspective of banker. Although the feedback from all the firms that had business dealings with Butler are quite positive , both solvency and liquidity condition and the mortgage indicates that it is not a wise

Upon returning from his annual two-week vacation in early July of 2002, the treasurer of the Spring Valley Forest Products Corporation, a Mr. Fred Firr, found the firm's audited balance sheet as of June 30 on his desk. Close scrutiny of the company's financial condition as reported in this document suggested to Mr. Firr that the cash flow picture for the enterprise was deteriorating. In times gone by, the firm had been able to maintain sizeable cash balances in its bank of account, Tippecanoe Trust Company, during the major portion of the fiscal year, and had found only modest seasonal borrowings necessary. Recently, however, a lengthening of credit terms to customers necessitated by intense

This report is designed to provide an evaluation of the financial fitness of Chester, Inc. through the creation and analysis of a full set of financial statements. Methods that will be used to analyze the income statement, balance sheet and statement of cash flows include: horizontal and vertical analysis, ratio analysis and comparison to competitors and the industry. All calculations used to create the financial statements and analyze them can be found in the appendix of this document. A list of differences between the presentation of these financials and International Financial Reporting Standards will also be included at the request of management. Results of this analysis shows that Chester, Inc. is performance is under industry averages in several areas, particularly in liquidity and profitability.

As mentioned in the introduction of the mini case, Hobby Horse Company, Inc. (HH) experienced a tough year in 2011. HH opened up a number of new stores but experienced a poor Christmas season. Christmas season is the biggest sale period for retail stores. As a result, bad Christmas sales performance played a big part of HH’s loss for year 2011. As we computed the financial ratios for HH, we can see the effects from new stores openings and poor sales performance.

Commutronics had not accumulated enough profits and had no sufficient capital reserves. The company’s registered capital was therefore very low. The withholding tax rate of

 What is the plan to maximize asset and increase asset turnover, which decreased from 2005 to 2008

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

Stakeholders include but are not limited to employees, investors, and lenders. Therefore, to have a well-informed and well-rounded opinion, it helps to have accurate and up to date financial statements and ratio distribution of the company’s revenue. With the statements, it not only shows the current position of the company but gives insight to determine the best decisions in the running of the company. In regards to lenders, financial statements are the antithesis of the lending criteria used to calculate any monies the company may or may not receive. This calculation is important in estimating the average amount of money that they can lend the organization, and the amount can be paid after a certain period taking into account the rate of interests (Cummings & Worley, 2009).

This paper will seek to analyze the financial statements of the O.M Scott & Sons Company during the years 1957-1961, in order to provide readers with a thorough understanding of the various factors that may influence the future success of this business. Additionally, recommendations based on an analysis of their financial