ipl-logo

Clarkson Lumber Essay

1719 Words7 Pages

Clarkson Lumber Company is owned and operated by Keith Clarkson. This company is a common example of a privately held company that has a low operating expense, minimal staff, yet a strong management structure. Clarkson lumber has experienced a rapid growth in sales and has gotten to a point where they are now faced with a shortage of cash. Clarkson Lumber will need cash reserves in order maintain its stability; especially, given the anticipated growth that will occur in the coming years. Mr. Clarkson himself bought out his partner’s interest in the company in 1994 for $200 thousand. At the time, his partner, Henry Holtz, took a note for the $200 thousand with an interest rate of 11 percent. This was repayable in semi-annual installments of $50 thousand beginning June 30, 1995 (Piper, 1996, para. 3). The primary reason the note was taken was to give Mr. Clarkson time to arrange for the necessary financing.
Overall, it seems Mr. Clarkson is running the company well. It is apparent that there are some consistencies in sales growth year upon year. However, it appears that Clarkson Lumber is …show more content…

is a manufacturer of industrial and household shears. Due to a policy of level production and a periodic sales pattern, the company is faced with having to borrow funds via- a line of credit in order to cover their accumulation of inventory and receivables. During years 1995 and 1996, ShearCut’s sales began to decline from the projected levels because of a downturn in retailing. The company may not have reacted timely which resulted in an accrual of excess inventory and related liability to repay its bank loan prior the next seasons period of demand increase. In 1995, David Fisher, Treasurer of SureCut Shears, Inc., was actually provided a $3.5 million line of credit from Hudson National Bank in order to cover supplies for the fall period. He anticipated that this line of credit would be completely paid off in full by December 1995 (Kester, 1997, para.

Show More
Related

  • Cabela's Business Strategy

    163 Words  | 1 Pages

    With no loss in revenue Cabelas’ growth was 117% over a 6 month span. With all partners integrated in new platform, Cabela’s wanted to dive into their consumers. Cabela’s

    Read More

  • Massachusetts Stove Company Case Study

    1064 Words  | 5 Pages

    Management has shown their abilities over the years to weather the recent EPA changes and declining wood stove market. While their profit margin for return on assets decreased, they managed to still increase sales enough in their niche market to increase their asset turnover and in the end, increase their return on assets. Even with major deficits in their retained earnings, the company worked through the tough regulations and low cash flow to not only continually grow their business, but turn

    Read More

  • Sunflower Nutraceuticals Summary

    1939 Words  | 8 Pages

    When analyzing the high risk customer, a base case with the standard WACC of 12% and a worse case with a WACC of 14% were utilized. Although the NPV of the best case was $260,000, the NPV of the worst case was negative $9,000. Due to SNC’s goals of continued growth and efficient utilization of funds, the worst case was used to make the final decision because of the uncertainty regarding this project. The prior two phases had shown a steady increase in ROE and ROA, so SNC’s executives chose to accept all projects that were certain to produce a positive NPV without overdrawing their line of credit. By adopting a global expansion strategy, SNC was able continue to grow its revenues without tying too much cash up in inventory.

    Read More

  • Summary Of Meet You In Hell

    1082 Words  | 5 Pages

    He used that experience to for his later achievements and started to make investments. With all of the earnings he had made being the head of the company, he

    Read More

  • Finance Case Study: The Wilkerson Company

    895 Words  | 4 Pages

    The pumps that the Wilkerson company produces are the “bread and butter” of this company. These products are produced at a high rate with a high price competition. As stated earlier, due to the severe price cutting by the competitors, the pre- tax margin of the company dropped extremely low to 3% percent and gross margin to 19.5%. Another product that the company produces are valves. The valves have remained steady around its planned gross margin of 35% with actual of 34.9%; these products are sold and shipped in huge bulk.

    Read More

  • Hill Country Case Study

    968 Words  | 4 Pages

    It means that these bought-back shares are no longer held publicly. So, I would recommend that Hill Country repurchase some of its shares and cancel it. This is because the purpose of the firm is to reduce the equity shares

    Read More

  • Essay On Wooden Headedness

    688 Words  | 3 Pages

    The societal affluence of Wooden-headedness has the same effect as a moving vehicle with a locked steering wheel; the course of action and end result will never waver from its set ideals. Wooden-headedness is the stubborn characteristic in which a person has a fixed mindset, and completely objectifies any other notion. In The March of the Folly, Barbara Tuchman accurately addresses the role of wooden-headedness as an effective aspect in our society and government. Our government is set in its tracks and works out of its own perceived motives. For instance, the Civil Rights Movement solely would have been significantly less brutal if the government had accepted racial justice and made reforms regarding african american rights.

    Read More

  • Toy World Inc Case Summary

    794 Words  | 4 Pages

    The company had a long-term debt at interest rate of over 9% and was planning to get another loan of about $2 million at an interest rate of 9%, which they are planning to repay within 30-day periods during the year. If

    Read More

  • Blaine Kitchenware: Case Study: Blaine Kitchenware Case

    921 Words  | 4 Pages

    Introduction The main objective of this particular case study is to assist Victor Dubinski, the current CEO of Blaine Kitchenware, decide whether or not repurchasing shares and changing the firm’s capital structure in favor of more debt could actually be benefit the company and its shareholders. Blaine Kitchenware is a small cap, public company who focuses on selling various different residential kitchen appliances. Up until this point, the company has only used cash and equity financing to acquire independent kitchen appliance manufacturers, and expand into foreign markets abroad. Given their excess cash and lack of debt, Blaine Kitchenware is considered to be “over-liquid and under-leveraged” (Luehrman & Heilprin, 2009).

    Read More

  • Woody 2000 Case Study

    1170 Words  | 5 Pages

    Ans. Following can be the scope statement for Woody 2000 project: ‘The project includes expanding its production capacity by 25%, developing and installing software and hardware that would be required to run semi-automatic woodworking production train, and installing air-conditioners and a dust-free paint and finishing shop, within the budget of $17 million with a target timeline of eighteen months. The scope also includes renovating the President’s and Executive Vice President’s offices.’ c. Develop a work breakdown structure.

    Read More

  • Case Study Questions On Transformational Leadership

    788 Words  | 4 Pages

    1) Question: If you were consulting with the HTE board of directors soon after Harold started making changes, what would you advise them regarding Harold’s leadership from a transformational perspective? Answer: Firstly, transformational leadership is a process that does exactly how it sounds, it transforms people. Through this sort of leadership, it is involved in being concerned with things such as standards, values, ethics, emotions, and long-term goals. If I were consulting with the HTE board of directors I would advise regarding Harold’s lack of awareness for those around himself and how that was making him an ineffective president.

    Read More

  • Competitive Case Analysis Of Wilkerson's Company

    1770 Words  | 8 Pages

    EXECUTIVE SUMMARY   TABLE OF CONTENTS Executive Summary 1 Introduction 3 Competitive Situation 4 Variable Costing 5 Existing Costing System 6 Diagram ABC 8 Activity Based Costing & Profitability 9 Conclusion 14 Bibliography 15   INTRODUCTION   COMPETITIVE SITUATION Firstly, here is a brief description of what Wilkerson Company specializes in. According to our case study and various online sources, Wilkerson manufactures and markets a complete line of compressed air treatment components and control products.

    Read More

  • Sam Walton: Transformational Leadership Analysis

    1197 Words  | 5 Pages

    Sam Walton a global market and transformational leader who has the vision to sell volume over profit. His vision gave him the opportunity to own and operate a single store in a small town in Arkansas and transformed his business to be one of the biggest corporation with over 4,000 stores in the United States. Sam Walton operate his company, Walmart, with compassion and love for his employees living with moral and ethical standards. He led by example, cared for his workers, customers, and most of all being a servant leader he is. He revolutionized and made a constant inspiration and made a huge impact in the retail industry.

    Read More

  • Buffett Case Study

    1327 Words  | 6 Pages

    Q3. How much value, if any, does Buffett derive from the credit agreement? There are two parts of the credit agreement, the 8-year term loan and the penny warrants. The $400 million term loan accompanying with a $45 million revolving credit facility will give Buffett a chance to earn at an interest rate of 10.5%.

    Read More

  • Analysis Of Financial Analysis: Whitbread PLC

    3531 Words  | 15 Pages

    This, joined with its great cash-flow, has driven the board to suggest an entire year profit increment of 19.9%. This amplifies its reputation of double digit development, with sales growing by 11.4% in the course of the most recent five years and EPS and dividend per share becoming by 14.7% and 13.5% respectively. (Whitbread Investors,

    Read More

More about Clarkson Lumber Essay

Open Document