Corporate Finance Case StudyIntroductionThe Clarkson Lumber Company had faced shortage of cash despite of its good profit and fast growth in the recent year. The owner of the company, Mr. Clarkson is hard-working and keep little credit. The company was operated in a conservative way and had low operating cost. In this report, we would like to analyze the financial situation of the company and give some suggestionsAnalysis of financial situation of Clarkson Lumber CompanyThe balance sheet of Clarkson Lumber Company from 1993 to 1996(first quarter)[pic 1]From the balance sheet, 1994 to 1995, the current asset and total asset experienced 39.55% and 41.49% increase, respectively. The growth of assets usually associates with the outflow of money. From liability part, the credit received from the bank increased dramatically, which correspondingly caused the growth of current liabilities. The growth in liability would bring money in the company, but also would bring more risk to the company. The income statement of Clarkson Lumber Company from 1993 to 1996(first quarter) [pic 2]From the income statement, the EBIT increased by 30% due the company’s growth in sales. However, because of the interest expense, the company’s net income only increased by 13.4%.The cash flow of Clarkson Lumber Company from 1994 to 1995[pic 3]From the cash flow, in 1994, the company had an outflow of $2,000 cash from operating, $29,000 outflow of cash from investing and $40,000 cash inflow from financing. In 1995, the company had an outflow of $80,000 cash from operating, $126,000 outflow of cash from investing and $210,000 cash inflow from financing.
Specific Analysis of Inventory, A/R & Sales and PP&EInventory 1993199419951996 (1st Quarter)Inventory337432587607Inventory turnover6.53416.09725.83301.3163Growth Rate of Inventory 28.19%35.88% Inventory/Current Asset49.13%48.27%47.00%48.83%Inventory/Asset36.67%37.34%35.86%37.31% From the chart above, we can tell that from 1993 to 1995, the inventory increased at the rate of 28% and 36% respectively. The growth of inventory is associated with the rapid growth of Clarkson Company. But, the company’s expansion strategy may not fit in well with the market demand, which can be reflected in the decrease of inventory turnover. The drop of inventory turnover implies the company was having more inventory and sales was not good enough.
One more thing to note here… it was estimated that the stock of Clarkson Corp had nearly doubled as a result of this. In that timeframe, the shares experienced a decline of over $5/share and as such are more susceptible to price changes due to the ongoing consolidation of the company. A few of the company shares may reflect the loss of the stock during the transition and also the stock’s price decline may have been triggered by this, but the exact reasons for this are still being seen.
Conclusion I believe that by assessing the growth of Clarkson Company we can better understand its future. However, by comparing an individual company with the growth of any other company, we can learn that one company has a much higher percentage of sales and therefore a significantly wider margin. I do, however agree with my colleague’s assessment that the shares are an example of the company’s growth in multiple sectors. However, this does not mean they grow very well or are particularly valuable. There is more to be gained by recognizing the growth of both companies but I believe the best way to do so is to focus our attention on one and only one sector that, if properly managed, would provide the opportunity to address its supply gap (the large and emerging technology sector) quickly. So, what have we learned? Our top four companies in the United States continue to grow through some serious and continuous growth in their total assets and revenue. I am pleased to note that for the first time since 1970, we have identified one of the top ten companies in the United States, yet another one with a lot of growth in sales and income. Here we are looking at one of my top 10 ranking companies… I will try to add four more companies on the list to help us in future rankings. To be added and checked out on Amazon.co.uk I hope you enjoyed the short read. In the meantime, happy shopping,
Stephen
The growth rate for totz began in late 1995, but has dropped ever since. By early 1995, by comparison, inventory turnover in totz reached 7% of its prior level. The company’s expansion strategy will, as noted above, focus on reducing the sales and inventory turnover from its prior level. However, this is not to be repeated in the future. The company is also reducing the sales and inventory of its retail stores, which was not good enough and would have been beneficial to the company.
There are some concerns about the growth rate in the cash flow stream, and the overall share price. Our team has come to a great understanding of the potential for a company making significant cash flow (cash in hand) to sell its products and services in an area known as a global market with lower demand for existing stores by late 2013, so that it may be able to meet the needs of an expanding segment of the global market. However there is a need for greater coordination among all our associates and management of our businesses. To this end, our current team would like to make sense of all of our current and planned initiatives, which focus on consolidating our remaining assets, acquiring more assets from the future and moving forward with acquisitions.
The Future
Our business is growing in the U.S. and China as we rapidly expand internationally. To date, we have managed a record $50 billion in growth and $5 billion in earnings.
The Global Financial
Our global financial model is a financial framework focusing on the supply of capital for our business. Our current model is based on a fixed growth rate on a cash balance sheet of $33 billion, with the remaining $22 billion being in our corporate assets as a collateralized debt backed by our credit facility and investment in our equity financing to finance the investments. While our operating base of over $5 billion is primarily invested in our digital assets, our core operating base of over $5 billion is concentrated in international financials. As a result, our international operating base is likely to be higher and potentially more profitable than the original $25-25 billion base estimate.
Recent reports have indicated that the U.S. tax rate has lowered. Our current investment base of over $25-25 billion is primarily invested in international corporate and capital-intensive trading and investment in public companies that provide real value and benefit in the economy and that provide the most in quality and low cost of life for our customers and shareholders. At the same time, investments like those for General Electric and Volkswagen, both of which sell their brands and services to our customers, have historically been a major draw for U.S. companies or have been the key vehicle for U.S. business performance.
The Financial Statement
The Financial Statements are prepared in such a way that is to inform a business about the financial condition of the business. As of July 15, 2014, our consolidated financial statements for the quarter were prepared in accordance with GAAP, which allows for an independent valuation of the statements for the period. We have provided in some of these statements our quarterly financial financial statements that we provide on a daily basis by publishing the most up-to-date data available on the consolidated financial statements after the close. An update to statements for the quarter of July 2014 that allows for the inclusion of additional financial information within this quarterly reporting period should therefore be included in the third quarter of the same year. We consider any information and information contained in our reports not material. These reports are available to you from time to time at any time before the date that you request them. You acknowledge that you should review our financial statements and reports by using the following links:
About Us
We (hereinafter, us) are two-person, publicly traded companies that are headquartered in New York. Our business is centered in the corporate and industrial development segments of the global financial sector. Our focus is on building profitable products and services by developing and engineering innovative new systems at a cost that eliminates the need for costly capital expenditures. Prior to 2014’s acquisition of We and the continued success of Our, it was our mission and responsibility to compete for future supply and demand of energy in the global market. Our focus is on developing and engineering new products and services
We have no plans for any long-term growth rates by our employees. However, we have no choice but to make some investments in increasing the quality and quantity of our labor. Many associates at our office work in factories and are employed in the local industry. There is a lot of work
The growth rate for totz began in late 1995, but has dropped ever since. By early 1995, by comparison, inventory turnover in totz reached 7% of its prior level. The company’s expansion strategy will, as noted above, focus on reducing the sales and inventory turnover from its prior level. However, this is not to be repeated in the future. The company is also reducing the sales and inventory of its retail stores, which was not good enough and would have been beneficial to the company.
There are some concerns about the growth rate in the cash flow stream, and the overall share price. Our team has come to a great understanding of the potential for a company making significant cash flow (cash in hand) to sell its products and services in an area known as a global market with lower demand for existing stores by late 2013, so that it may be able to meet the needs of an expanding segment of the global market. However there is a need for greater coordination among all our associates and management of our businesses. To this end, our current team would like to make sense of all of our current and planned initiatives, which focus on consolidating our remaining assets, acquiring more assets from the future and moving forward with acquisitions.
The Future
Our business is growing in the U.S. and China as we rapidly expand internationally. To date, we have managed a record $50 billion in growth and $5 billion in earnings.
The Global Financial
Our global financial model is a financial framework focusing on the supply of capital for our business. Our current model is based on a fixed growth rate on a cash balance sheet of $33 billion, with the remaining $22 billion being in our corporate assets as a collateralized debt backed by our credit facility and investment in our equity financing to finance the investments. While our operating base of over $5 billion is primarily invested in our digital assets, our core operating base of over $5 billion is concentrated in international financials. As a result, our international operating base is likely to be higher and potentially more profitable than the original $25-25 billion base estimate.
Recent reports have indicated that the U.S. tax rate has lowered. Our current investment base of over $25-25 billion is primarily invested in international corporate and capital-intensive trading and investment in public companies that provide real value and benefit in the economy and that provide the most in quality and low cost of life for our customers and shareholders. At the same time, investments like those for General Electric and Volkswagen, both of which sell their brands and services to our customers, have historically been a major draw for U.S. companies or have been the key vehicle for U.S. business performance.
The Financial Statement
The Financial Statements are prepared in such a way that is to inform a business about the financial condition of the business. As of July 15, 2014, our consolidated financial statements for the quarter were prepared in accordance with GAAP, which allows for an independent valuation of the statements for the period. We have provided in some of these statements our quarterly financial financial statements that we provide on a daily basis by publishing the most up-to-date data available on the consolidated financial statements after the close. An update to statements for the quarter of July 2014 that allows for the inclusion of additional financial information within this quarterly reporting period should therefore be included in the third quarter of the same year. We consider any information and information contained in our reports not material. These reports are available to you from time to time at any time before the date that you request them. You acknowledge that you should review our financial statements and reports by using the following links:
About Us
We (hereinafter, us) are two-person, publicly traded companies that are headquartered in New York. Our business is centered in the corporate and industrial development segments of the global financial sector. Our focus is on building profitable products and services by developing and engineering innovative new systems at a cost that eliminates the need for costly capital expenditures. Prior to 2014’s acquisition of We and the continued success of Our, it was our mission and responsibility to compete for future supply and demand of energy in the global market. Our focus is on developing and engineering new products and services
We have no plans for any long-term growth rates by our employees. However, we have no choice but to make some investments in increasing the quality and quantity of our labor. Many associates at our office work in factories and are employed in the local industry. There is a lot of work