Jones Electrical Distribution Case Essay example

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

Since Donna Dubinsky and Roy Weaver did not address Mr. Jobs questions regarding the 1985 Distribution Business Plan, he assigned Debi Coleman to develop a new Distribution Strategy Proposal based on the “just-in-time” concept. Ms. Dubinsky was not proactive in presenting her issues and concerns regarding the “just-in-time” concept. It is assumed that she considered the idea not feasible and that it would not gain momentum; however, the exact opposite occurred.

A customer service program was developed in 1999 to track the performance of their employees. As incentives for their employees offering great customer service the data received from this tracking is used to reward employees. Additionally, it gave Lowes the ability to recognize the cause of service failures, thus giving them the opportunity to improve in that area. The layout of the store is helpful to the customer in locating the products that they are looking for. Its warehouse style store is laid out so that two shopping carts can pass in the aisles in comfort. This seems to appeal to the female shoppers which initiate eighty percent of home projects Lowes distribution system is strong and efficient. They regionally operate fourteen distribution systems. They efficiently distribute seventy five percent of its merchandise to its stores through the fifteen flatbed distribution centers they have for lumber, building materials and other long length or heavy items. Because can purchase large scale orders they are able to get them at a discount and pass the savings onto their customers. Lowes has multiple technological systems that their customers have access to. They offer how-to-videos, DIY projects, landscaping and lawn ideas, and more helpful videos full of inspiration. The enhanced multi-channel experience for the customer is available in many variations. Lowes has in-store-Wi-Fi, touch screen technology, and barcodes that can be accessed through a customer’s

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?

In this assignment I am going to evaluate the distribution systems in delivering goods and services for one of the well-known food sector business and that is ASDA. I am going to look at both the positive and the negative aspects of the distribution systems used and make recommendations for improvement with justified reasons

First of which, is the current ratio. It has been rapidly declining since 2000. To me this indicates that there is a liquidity issue. Each year their trade debt increase exceeds the increase of net income for the company. As a result, the working capital has taken a nosedive from $58,650 in 2002 to only $5,466 in 2003.

Increase in current liabilities Substantial increase in current liabilities weakened the company’s liquidity position. Its current liabilities were US$2,063.94 million at the end of FY2010, a 48.09% increase compared to the previous year. However, its current assets recorded a marginal increase of 25.07% - from US$1,770.02 million at the end of FY2009 to US$2,213.72 million at the end of FY2010. Following this, the company’s current ratio declined from 1.27 at the end of the FY2009 to 1.07 at the end of FY2010. A lower current ratio indicates that the company is in a weak financial position, and it may find it difficult to meet its day-to-day obligations.

The financial needs of Jones Electrical will increase unless they change their policy on financing buyers while paying faster to their suppliers. This in deed is what is making that the company requires additional founds.

Even though the company has been turning in profits, the ineffective collection practice, not availing trade discounts on time and ineffective inventory management has led the company in need of larger financing needs.

Support: The inventory increase in 1997, YOY, was 58%. Additionally, the COGS to revenue ratio reduced from to 72% in 1997. This combination of increase in inventory and reduction in COGS as a percentage of revenue seems to indicate that the fixed costs may have been spread over a larger base through over production, thereby causing the COGS to reduce. This may be a cause for concern and could be a potential red flag.

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 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.

Bodie Industrial Supply has funded itself mostly through loans. These loans include a bank loan, transport loan, mortage payable and CCB mortage payable. They took out a loan in 2005 in order to pay for the purchase of land, building and equipment. Liz Bodie expects sales growth to increase in 2007 and thus needs funding to build an extension to the warehouse to hold more inventory. Looking at BIS’s cashflow statements, you notice a significant increase in net cash flow from financing from 2005-2006. There is also an increase from the cash flow of operations from 2005-2006. In 2005 net cash flow was -$13,500 and increased rapidly in 2006 to a healthy net cash flow of $49,720. Based on current ratio, the company is losing liquidity, decreasing from 2.63 in 2004 to 1.52 in 2006. The quick ratio is another indication

As Mackay, the key objective(s) entail, securing a $194,000-bank loan in conjunction with a $26,000 line of credit in efforts to reduce his trade debt and service his tight months of cash shortage (Lawsons, 2013, p. 311) in order to avoid filing for bankruptcy and foreclose his business.

And the company is suffering from liquidity challenges because it is not in a position to finance its day-to-day activities, so its bank account stands over drawn. This situation has impacted negatively on the company's ability to repay its earlier loans and customers are upset because of delayed delivery.