Butler lumber company case study
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Summary of Realities. Butler Lumber Company is a Pacific Northwest based lumber supplier that sells plywood, moldings, and sash and door items. The sole owner of Butler Lumber is Mark Butler, accompanied by one administrative assistant and ten workers who focus on repair work and labor intensive work. Due to the fast growth and a scarcity of money in , Butler Lumber Business is seeking to secure an additional loan in order for business to sustain itself and grow in the coming years.
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Butler Lumber Co. Case Study Analysis & Solution
Butler Lumber Company Analysis Free Essay Example
Summary of Facts. Butler Lumber Company is a Pacific Northwest based lumber distributor that sells plywood, moldings, and sash and door products. The sole owner of Butler Lumber is Mark Butler, accompanied by one administrative assistant and ten employees who focus on repairs and labor intensive work. Due to the rapid growth and a shortage of cash in , Butler Lumber Company is seeking to take out an additional loan in order for the business to sustain itself and grow in the coming years. If Mr. Butler decides to accept the note from Northrop National bank, it will sever the existing ties with Suburban National Bank and a new relationship must be maintained. Disclaimer: This work has been submitted by a student.
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Butler Lumber Co Harvard Case Study Solution & Online Case Analysis
This would further reinforce the idea of negligence on Speedy Deliveries part as other competitors in the industry do not have issues with consumers. Number of Days in Collection Period The number of days in the collection period measures on average how many days a company takes to collect the short-term…. The Net Profit Margin shows the overall amount retained per sales dollar once all of the business expenses have been paid. With Moserk at 9. Slight changes in the expenses could help boost this number above the average….
Butler Lumber also has to deal with higher interest expenses due to its increasing debts to fund the working capital. Butler have to borrow so much of money to support this seemingly profitable business? Butler appears to be growing the revenue of Butler Lumber with external funding. Mr Butler is borrowing so much money in order to meet the higher working capital requirement arising from the increased revenue in each year. Increased revenue will render increased accounts receivables and inventories; hence a higher net working capital cycle though the increased accounts payables will partly offset the increase.