Hampton Machining Case Analysis

Hampton Machining Case Analysis: FACTS: * The VP, Jerry Eckwood of Welling National Bank is considering ext closeing an be minimal brain damage of $1M to Hampton Machine Tool Company to add in an purposeless $350K for additional planned equipment purchases in October. * The re-payment of the loan will antecedent out at the end of 2007, (i.e.- the payment of $1.35M) to Wellington. * Hampton has a stiff bridgehead in sales, but the value of their Dollar has come down, which did decrease their handiness to export. * History of the Company: 1. Traditionally strong working capital 2. No Debt prior to December 2006 3. $1M loan taken for the shareholders 4. $1M loan has a 18% annual rate on the principal (due 9/30/07) 5. P/L Statements and chemical equilibrium sheets were sent to Eckwood for his reexamine and if good taste 6. Selling cost (Net 30) 7. Advance payments that were made by customers in order to pay the ma chining by Hampton and they subtract this from the write up supplied to the customer subsequently delivery of the part 8. Purchases of Machining (Net 30) 9. Loan needed by end of October, payable at the end of the year ANALYSIS: * Hampton has hardly recouped 73% of their foretelled selling monetary value; $8699K (actual)/ $11919K (forecast).

This might be attached to the declining value of the New Zealand dollar as thoroughly as the advance payment of the customer in affinity to the invoicing price they receive upon receipt of the machinery plus the Net 30. The forecast (modified) for kinsfolk December are very extreme for the calendar month of family with a st eady cap over the last leash months. ! * Its important for the bank get a lead dance understanding on how they can effectively retribution the existing loan, as they stated they can, but its essential to port at the current ratio and see if that they enough currency to cover their liabilities. May 5950/3943 = 1.5 June 6321/3997 = 1.6 July 6571/4179 = 1.6 August 7007/4545 = 1.5 They have a stable...If you privation to get a full essay, order it on our website: OrderEssay.net

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