Lawson Case Essay

Looking at the company's financials it seems to be the company has too much in long-term loans. Ganong's total debt to net worth ratio is 4.9 where the industry median is 0.6. The business need to bring the number closer to the industry median to compete. As well they currently have to most cash on hand in the last three years but the least amount of current assets. This being said their chances of getting money now is harder than before. They have always had trouble receiving money from clients with having a day's receivable at 61 days and the industry median for this statistic is 21 days. For the company to have more success and cash available to pay debt or invest in projects the company need to strengthen up there receivables department. Right not the company is not competing in the industry enough. Ganong is behind the competitors benchmark in every category shown in the case. Ganong seems to be a leading competitor for its Valentine's day chocolates in a heart-shaped box with 30% market, but are the fringe players in other product lines.

Sparkle Company is a Nigerian diamond mining company. Sparkle is a joint venture, 50 percent owned by Shine and 50 percent owned by Brighten. Both Shine and Brighten are U.S.-based companies with their functional currency being the American dollar. Sparkle Companies functional currency is that of Nigeria, being the Naira. During 2009, Sparkle had several transactions with its joint venture owners and outside parties. The details of Sparkle’s transactions are three loans, three expenditures, and one revenue stream. The loans the company took out were $1 million from Brighten, $1 million from Shine, and 300 million Naira from a local Nigerian bank. The expenditures

This company, a retail clothing store with three suburban locations in Atlanta, Georgia, is incorporated, with each of the three Boudoir sisters owning one-third of the outstanding stock. The company is profitable, but rapid growth has put it under severe financial strain. The real estate is all under mortgage to an insurance company, the inventory is being used under a blanket chattel mortgage to secure a bank line of credit, and the accounts receivable are all being factored. With total assets of $7 million, the company now needs an additional $450,000 to finance a building and fixtures for a new outlet.

ASC 320-10-35-33F: “Changes in the quality of the credit enhancement should be considered when estimating whether a credit loss exists and the period over which the debt security is expected to recover.”

The court deciphering between criminal negligence and recklessness. Criminal negligence being a person failing to perceive a substantial and unjustifiable risk that the result will occur or that the circumstance exists. The risk must be of such nature and degree that the failure to perceive it constitutes a gross deviation from the standard of care that a reasonable person would observe in the situation.

Given the net sales in 2011 is still higher than 2010, we can assume the problem is most likely with its operating cost management. On the other hand, HH’s assets turnover rate dropping 0.30 from 2010 suggests an inefficiency of generating more sales with its increased assets in 2011.

Tire City, Inc. has petitioned MidBank for a loan in order to expand their business, and build a new warehouse. Through the financial statement reporting and the numbers that have been presented to me, I believe that this is a sound investment. The growth percentage of 20 percent per year is conceivable, if business stays as it currently is. The amount of debt that would need to be financed for this expansion is palatable, and well within the normal ranges for these sort of projects. Moreover, the company has very solid net working capital and leverage ratios. All of these factors lead me to believe that this will be a profitable investment for the bank. The one issue that I had was in 1996 when Tire City capped their

On a snowy January evening, the Midwestern Medical Group (MMG) management team held a retirement party for Judith Olsen, MMG president. During the evening, Olsen reflected back on the years she had worked for MMG with mixed feelings about her experience. Over the course of their eight-year integration

Shakespeare Inc., a private publishing company issued its F/S on March 20, 2012. There were several accruals and events that the management of Shakespeare is considering to determine if they should be recognized or disclosed in Dec 31, 2011 F/S. In my opinion, the important things to focus on subsequent events are the period they effect and if their influence is material or not, so that in conclusion, the F/S are fairly presented.

Mr. Paul Mackay, a sole proprietor, has approached the Commercial Bank of Ontario in order to obtain an additional $194,000 bank loan and a $26,000 line of credit. Paul owns and operates a general merchandising retailer in Riverdale, Ontario named Lawsons’. The bank loan is needed for Mr. Mackay to reduce his trade debt that has a sheer 13.5 per cent interest penalty. The line of credit is needed for sales seasonal downfalls so that Mr. Mackay could properly manage those tough months. Jackie Patrick, a first time loans officer, has been appointed to Mr. Mackay’s request. Although anxious to finish her first loan, Ms. Patrick knows that this particular case is a difficult one.

The management of BBBY is worried about how to use the excess cash and their capital structure policy. With their 400 million excess cash and the idea of issuing debt their options are to either use the excess cash and 40% debt, or use the excess cash and 80% debt. BBBY is contemplating these options in order to repurchase some of its shares to increase the EPS, the market value, stock price, ownership as well as the return on equity to help with the loss of confidence coming from their shareholders. BBBY’s current cost of financial distress is very low, as they only have 2 lines of credit amounting to $125 million on which they don’t have any outstanding borrowing. BBBY are also banking their money in order to generate interest income instead

There is a substantial increase in the company's credit loss provisions for Comerica. The percentage of credit loss provisions to PBT plus credit losses skyrocketed, from 3.6 percent in 2006 to 66 percent in Jun 2008, indicating the Corporation's tough situation in collecting the outstanding loans.

Fishy Foods is a take away restaurant that established in 2010. The company has been running well but has been they have noticed that there are less customers wanting their product. However the company is positive for the future and has been offered a bank loan from a bank manager and now have to consider what they want to do with the loan.

There is no “right” definition for debt management. Generally it involves a strategy or plan with the ultimate goal of helping a debtor fulfill his debt and thereby free himself of any obligations to the creditor. Typically, a debt management plan will enable a debtor make consistent and regular repayments to enable them retain creditworthiness. Following is a synopsis of some common debt management strategies. Thereafter, we review the main types of loan facilities together with their salient features and not-so-obvious drawbacks.

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.