Essay about Butler Lumber Case Study Solution

Year-end total loans of BAC increased $40.3 billion to $940.4 billion in 2010 compared to 2009. According to its 2010 annual report, the increase was primarily due to the impact of adopting new consolidation guidance partially offset by continued deleveraging by consumers, tighter underwriting and the elevated levels of liquidity of commercial clients. WFC total loans…

This then translates to a 50% chance of not having inventory available during job opportunities. Therefore, opportunity costs might occur. The indifference of the production managers' in these aspects of inventory control is alarming and should be acted upon.

At first glance, Clarkson Lumber appears to be a healthy company. However, despite rapid growth and increasing sales Clarkson Lumber finds itself searching for additional funding to compensate for a shortage in cash to fund its expanding business. Clarkson Lumber is in this situation for a number of reasons.

1. Identify the key problem in the case and explaining why it is the key problem.

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

Lorman Lumber is a publicly traded company with widely held shares. Its Yamica location in rural Oregon is one of the company’s largest. The purpose of the plant is to process and treat wood, which it does through a number of facilities. The Sawmill began producing lumber products in 1947, which it does by peeling, milling, and chipping raw wood. Lorman has a known record of producing good profits, and will often pay out generous performance-based bonuses to executives. Although the Yamica plant is somewhat outdated, it is still considered to be efficient and profitable. Starting in 1968, the company began using new methods to condition and pressure-treat wood products through the

ten­year loan OVS has been extended by their bank to help finance its rapid expansion. If such a

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?

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

1. Productivity of the crew would be below standard. I believe for the productivity to be below standard because they were sent to this crew because of their lack of work. Just because they have been assigned to another crew, does not mean that they will begin to work well right away. When compared to the Equity Theory, I believe there to be positive inequity for the three men assigned to the new group. For being assigned to the group due to lack of work, it is unfair to have a higher pay grade than those who have been in the company for a longer period of time and who are doing their job correctly. This may cause issues with subprofessionals being motivated to work to their full

Gene Denning, an employee of Welco Lumber Company, decided to run a study by videotaping a sample size of 365 logs being processed. However, actual data provided proved that it was a true sample size of only 362 logs, as data for logs # 30, 123, and 127 are missing from his report. He videotaped 3 operators, April, Sid, and Jim, marking the logs, how each log was broken down and the degree to which the cants were properly centered. Gene then did a comparison of what the cost was of the log in its current condition (actual value), to what would have been the correct value of the log if the cut had been

Sales took the most percentage of total revenue. The revenue of sales increased gradually from $ 214,934 (in thousands) in 2010 to $ 260,832 in 2012 while the figure of royalties reduced gradually from $ 873 in 2010 to $ 681 in 2012 (in thousands). The revenue of other income increased from $ 1,286 to $ 1,325 during this period and then the figure decreased dramatically to $ 533 in the financial year 2012. In addition, in the financial year 2012, a new resource of revenue called membership was developed with the figure of $54.

The reason why Butler Lumber Co. is considering finding a different line of credit is because they’ve nearly exhausted all their usable credit with Suburban National Bank, using up $247,000 of the $250,000 of the credit limit. To compile this issue, the bank is wishing to secure the loan with some of Butler’s property. Considering the company’s large debt ratios, they have decided to check with Northrop National Bank’s offer to extend their line of credit by $215,000.

The Cartwright Lumber Company had been found in 1994 as a partnership by Mark Cartwright and his brother-in-law Henry Stark. Later in 2001, Mr. Cartwright bought out Stark’s shares and incorporated the business. Now, Mr. Cartwright is a sole owner and president of the company. The business is located in the Pacific Northwest region and does the retail distribution of lumber products in the local area. Plywood, moldings, and sash and door are some of the typical products of the company.

Even though the company showcased lower than expected revenue, the company remains profitable which can be measured with the Return on Assets (ROA) ratio. The software/infrastructure industry has an average ROA of 8.18% compared to F5’s ROA of 15.9%. This indicates that for each dollar invested in assets, the company generates on average 15.9 cents in profit. The Return on Sales (ROS) of a company allows investors to see how much profit the company is generating per dollar of sales. F5’s ROS is 18.3% which means that they earn 18.3 cents for every revenue dollar resulted in profit. F5’s asset turnover is 0.865 compared to the industry’s average of 0.41 which dictates that they generate 0.865 in revenue for every dollar invested in assets. In order to do an even deeper analysis for F5, I looked at the Gross Profit Margin (GP %) and found that F5’s Gross Margin is 83.33% compared to the industry’s average of 63.73 percent. This means F5 earns 83 cents on the dollar in gross margin.