Cartwright Lumber Company Case Essay

Words: 1286
Pages: 6
Open Document
Cartwright Lumber Company

I. Company Background & Situation
Cartwright lumber company was located in a suburb of a large city in the Pacific Northwest; its operations were limited to the retail distribution of lumber products in the local area. In 1994, Cartwright Lumber Company was established as a partnership by Mark Cartwright and his brother-in-law Henry Stark. However, in 2001, Cartwright brought out Henry’s interest for $105,000 and incorporated the company. About 55% of the total sales of Cartwright Lumber Company were made in the six months from April through September. There were no sales representative; orders were taken exclusively over telephone. Sales volume had been largely on the basis of successful price competition, …show more content…
The average of 2001 to 2004 was 0.61. Those were within acceptable level. Besides the liquidity, the working capital was keeping increasing from $ 208 thousand to $ 242 thousand.

4. Cash Flow
Based on the income statement and balance sheet, we can get the cash flow statement for year 2002, 2003 and the first quarter of 2004. From the cash flow, it is obviously see that the main use of fund is for operations, materials purchasing, wages payment, interest payment etc. While the source of fund is from financing, bank loan and trade notes payables.

III. Credit Assessment & Industry Analysis
With understanding of historical financial situation, we still need to know how company’s credit report demonstrates. And for a corporate form of organization, how it plays about the owner of the company’s personal credit.
1. Credit Assessment on Company
Company Credit Assessment: For the Cartwright Lumber could get 2% discount payment within 10 days from suppliers, but it had taken few purchase discount because of the shortage of funds, while there was no bad record of lagged payment, so the company still owned good credit assessment.
2. Credit Assessment on Mark
Administer Credit Assessment: Mark Cartwright was the sole owner of Cartwright Lumber Company. Per one of his supplier evaluated, Mark kept close check on his own credits, and had good personality.
3. Industry Analysis
Situation for
Show More

Related Documents: Cartwright Lumber Company Case Essay

Case Studies Fi4020 Essays

Case Preparation Questions (Note that questions sometimes continue on the next page) Use a spreadsheet program such as Excel for computations for all cases Riley Supply 1. Prepare one indirect cash flow statement (operating-investing-financing) for 2004-2005 and a second one for 2005-2006. Do not aggregate any accounts. 2. Calculate common-size income statement for each year. 3. Calculate all financial ratios (use “A Basis Set of Financial Ratios”) for each year. You will…

Words 2608 - Pages 11

Essay about AMERICA MOVING WEST

shipped from the eastern seaboard all the way to the Pacific Ocean. The construction of the railroads in the west created large numbers of jobs for former Confederate and Union soldiers as well as many newly freed African Americans, but in many cases the job proved too hard for the average worker who would not work long hours for increasing dwindling pay this led to Chinese immigrants being brought in to work the harder stretches of the railroad where sometimes they would only clear a foot a day…

Words 2826 - Pages 12