Essay about Business Analysis
Monica fernandes som 101
November 9, 2004
Prof. Pierre du jardin
Mr. George Dodge, Clarkson Lumber Company is doing well but there is the issue of whether or not there is too high a risk in granting the request for the $750,000 line of credit. There are many supporting strong points but it also has some problems to work out. This is a company that has many good characteristics and looks promising but needs the extra money to pay off loans, inventory, and supplies. I recommend this company to receive the line of credit.
Looking at the individual ratios seen in exhibit 1 and comparing it to the industry average shown in exhibit 2 gives a sense of where this company stands. Current ratio and …show more content…
Inventory turnover is also decreasing and less than the average, but as stated previously, it is because the company has more inventory on hand to give their customers plenty of selection. For instance, in 1995, it was 5.83 times vs. the industry average of 8.1 times, but this gives them an advantage and gives