Why has Clarkson Lumber borrowed increasing nubs despite its professional personfitability? in that respect argon a couple of reasons for Mr. Clarkson wanting to increase the amount of borrow that would be takeed to continue with his operations. One of the reasons is that he wants to be agree off Mr. Holtz in ramble for himself to become the firsthand proprietor of the company. Another reason for the pauperisation to borrow silver is that the elucidate income was growing at a slower direct than the operate expenses. Between the long time of 1993-1995 the net income only travel from 60k, 68k ,77k super C respectively. The operating costs for the 3 years rose from 622k, 717k, 940k gramme respectively. Mr. Clarkson take to take out a loan so he could increase the purchasing berth for goods. This would be constituted by Mr. Clarkson having liquid cash to engagement for prompt payment, which leave lead to acquiring trade discounts and therefore Mr. Clarkson will h ave a competitive advantage in boundarys of purchase power. 2. How has Mr. Clarkson met the finance needs in the past?The financing needs of the past have been met by taking a term loan of $399,000 that was fixed by the assets the company had. Mr. Clarkson had mark liabilities that were offset printing by the increase in sales. 3. How more than will Mr.
Clarkson need to finance the expected expansion in salesto $5.5 million in 1996 and to take all trade discounts? found on the pro forma balance sheet and the pro forma income statement, Mr. Clarkson would need $750,000 loan. This would be justify in terms of u sing the following(a) formulas, which is de! rived from the 1996 Pro Forma proportion Sheet (figures are in thousands): be Assets ? Total Liabilities ? cabbage Worth 2179 - 533 ? 1395 = 251Following the 251 that would be... If you want to get a full essay, order it on our website: OrderCustomPaper.com
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