Desc In order to remain solvent, Clarkson Lumber must borrow money from the bank to decrease the cost of financing its purchases. Borrowing money from the bank to take advantage of the trade discount is just the first step Clarkson must take. Details of the other recommended steps are explained in the analysis of issue two. On first blush, Clarkson Lumber should take the two percent discount from their suppliers, however, at this point, they cannot afford it.
In addition, Mr… Clarion has also taken longer to pay his suppliers, transferring the delay from an increase in accounts receivable to a delay in paying accounts payable, and even taking on trade payable in the form of interest bearing notes. Although this does allow Mr… Clarion to continue operating his business, prolonging payable is not a long-term financially sound way of operating a company, especially because Mr… Clarion needs to pay on time in order to take advantage of trade discounts.
Due to poor financial decisions, the financial strength of the Company has deteriorated. Because the Company runs a low margin, high volume business, it is of utmost importance to take advantage of trade discounts.
By taking advantage of these accounts, the Company is able to make use of its high volume to lower overall costs and improve margins. Because the Company needs to pay its suppliers on time, it requires a new revolver in the coming 12 months. After the debt financing, the Company may take advantage of trade discounts and have the ability for continued expansion.
Current Ratio should increase to 1. How to cite this page Choose cite format:Clarkson Lumber Company through its owner has maintained a dependable and reliable relationship with the Suburban National Bank. Mr. Clackson, the owner, is a dedicated manager and has allowed its company to keep its obligations over the bank, thus managing to keep the company’s loan within the limit.
The story of Mumford has been written by several local historians. Carl F Schmidt, an architect locally noted for his histories of the area, and George Engs Slocum, a local writer whose history of Wheatland appeared in the very early twentieth century.
In (Slocum) and (Schmidt), the Wheatland Historical Association commissioned reprints of their books. Clarkson Lumber Company was founded in as a partnership by Keith Clarkson and Henry Holtz.
The company has fifteen employees; eight of whom are working in the yard and driving trucks, while seven of the employees assist in the office and in sales.
LACONA, NY – Come to Lacona on Saturday, June 30 to celebrate the former Blount Lumber Company.A dedication ceremony for an historic roadside marker begins at 10 a.m. at the past site of the business on DeMott Street, which will highlight the company’s history and importance in Oswego County.
Free Essay: Statement of the Problem At first glance, Clarkson Lumber appears to be a healthy company. However, despite rapid growth and increasing sales.
Clarkson needs to take out a loan so he could increase the purchasing power for goods. This would be accomplished by Mr. Clarkson having liquid cash to use for prompt payment, which will lead to acquiring trade discounts and then Mr.
Clarkson will have a competitive advantage in terms of buying power/5(1).