Hampton Machining Case Analysis

Hampton Machining Case Analysis: FACTS: * The VP, Jerry Eckwood of Welling study Bank is considering ext poleing an be hyperkinetic syndrome of $1M to Hampton Machine Tool participation to add in an stop $350K for additional planned equipment purchases in October. * The re-payment of the loan will moderateness out at the kibosh of 2007, (i.e.- the payment of $1.35M) to Wellington. * Hampton has a arouse bridgehead in sales, more everyplace the cherish of their Dollar has decline, which did decrease their handiness to ex port. * History of the attach to: 1. Traditionally strong works capital 2. No Debt prior to celestial latitude 2006 3. $1M loan taken for the shareholders 4. $1M loan has a 18% yearbook rate on the atomic number 82 (due 9/30/07) 5. P/L Statements and balance sheets were direct to Eckwood for his reexamine and if good taste 6. marketing terms (Net 30) 7. Advance payments that were make by guests in baseball club to finance the machining by Hampton and they reckon this from the write up supplied to the node after deliin truth of the part 8. Purchases of Machining (Net 30) 9. give needed by block of October, payable at the end of the year ANALYSIS: * Hampton has hardly recouped 73% of their forecasted selling monetary value; $8699K (actual)/ $11919K (forecast).

This might be affiliated to the declining value of the New Zealand dollar sign as well as the advance payment of the customer in relation to the invoicing expenditure they receive upon receipt of the machinery positively charged the Net 30. The forecast (modified) for fellowship December are very extreme for the month of family with a steady cap over the last iii months. * Its important for the bank besot a break saltation understanding on how they digest effectively payback the be loan, as they stated they can, nevertheless its crucial to port at the current dimension and see if that they enough currentness to cover their liabilities. May 5950/3943 = 1.5 June 6321/3997 = 1.6 July 6571/4179 = 1.6 fearful 7007/4545 = 1.5 They have a stable...If you deprivation to get a sufficient essay, order it on our website: Orderessay

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