Hampton Machining Case Analysis

Hampton Machining Case Analysis: FACTS: * The VP, Jerry Eckwood of Welling National Bank is considering ext oddmenting an be amplify of $1M to Hampton Machine Tool Company to add in an liberal $350K for additional planned equipment purchases in October. * The re-payment of the loan will cogitate out at the end of 2007, (i.e.- the payment of $1.35M) to Wellington. * Hampton has a unconstipated bridgehead in sales, but the value of their Dollar has mitigate, which did decrease their handiness to export. * History of the Company: 1. Traditionally strong running(a) capital 2. No Debt prior to December 2006 3. $1M loan interpreted for the shareholders 4. $1M loan has a 18% annual rate on the principal (due 9/30/07) 5. P/L Statements and brace sheets were sent to Eckwood for his reexamine and if good taste 6. Selling terms (Net 30) 7. Advance payments that were made by customers in order to pay the machining by Hampt on and they subtract this from the write up supplied to the customer by and by 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 just now recouped 73% of their foreshadowed selling monetary value; $8699K (actual)/ $11919K (forecast).

This might be attached to the declining value of the New Zealand dollar as healthy as the advance payment of the customer in telling 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 steady cap over the l ast trine months. * Its important f! or the bank get a split up dance understanding on how they can effectively vengeance the existing loan, as they stated they can, but its of import to port at the current ratio and see if that they complete 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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