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| TMH Assignment | Spring 2010 | | Bella SongYi Wang | 3/2/2010 | Background This memorandum is presented in order to assess the risk Triangle Manufactured Homes (TMH) is engaged in. To assess the risk, we have thoroughly gone through the Company’s annual report and selected analyses of its financial condition and results of operations. These analyses have become the base of the level of risks that we determine TMH is exposed of. Business Analysis According to the Company’s annual report, TMH is a business that engages in the retailing of manufactured homes. It is one of the leading players in the manufactured homes industry, representing about 45 percent of the total U.S. market. Operating a total of 114 retail sales…show more content…
Through the acquisitions, TMH is not only benefiting from the deepening market penetration in its existing markets, but also from entering into the new markets. Moreover, the acquisition of manufacturing facilities, albeit it is in the retailing business, prepares TMH for the periods when demand for homes outpaces supply, which would mostly occur between March and October. In order to maintain its role as a leader in the industry and to create its competitive advantage, the manufacturing facilities are also planned to be used for manufacturing custom-designed homes that will help satisfy customers with special needs. In addition, TMH pays more than industry average to attract and maintain its employees, which helps the Company to stay in a leadership role. TMH has also established its wholly owned subsidiary – TMH Financial Services Corp. to expedite completion of credit approval processes for other subsidiaries and independent retailers. In addition, TMH Financial will collect installment sales contracts executed at the subsidiary or independent retailer level and sell them to third-party financial institutions with recourse. This process of selling installment sales to outside parties is one of TMH’s major sources of income. Accounting Analysis In addition to understanding a company’s business and its environment, in-depth knowledge of its accounting policies and disclosure practices also help assess
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