Executive Summary In the case GE Capital Canada, Clark Carriers submitted a request for a loan of $270000. It was confirmed first that Clark Carriers met the minimum requirements set out by the commercial equipment financing division of GE for loans. Cash flow was analyzed to ensure that Clark Carriers had sufficient cash flow from operations to make payments on current loans. The projected financial statements of 2003 were created and analyzed to include the new potential loan to display how the new equipment and contract would benefit Clark Carriers’ financial position. Then the financial ratios were analyzed to ensure that Clark Carriers was in fact efficient in its profitability, liquidity, stability, efficiency and growth in which They are also slowly growing so it will make it an ideal place to give a loan.
Alternative Analysis Some of the alternatives for the company is that they take out a loan somewhere else which would be lost business for GE Capital Canada. If Clark Carriers takes its business elsewhere they could be losing a really good client. Another alternative could be for Clark Carriers to try and make the money on its own to buy the trucks but at the pace they are going it will take them a really long time to do so. Clark Carriers can also not invest in new trucks but this will not advance the company and keep them at a standstill. After a while of not advancing they will start losing money and will eventually need to take out a loan. It is better for them to take out a loan now then to do it later on so that they can start success now rather than later. With some of the competition that could soon be forming it would be ideal for them to do that. If the loan is not approved then the company will be saving money and not have to give out the $270000 that Clark Carriers is asking for. On the other hand Clark Carriers would not have to worry about debt and what they would need to owe when the time comes.
Decision/Recommendation It is recommended that GE Capital Canada does approve the loan because it would be a smart decision to do because Clark Carriers is on the up and up and will make a lot of money so they will have nothing to lose. This loan
4/9/2013 Business and Economics Case Studies in Finance Technical Content for Porsche Volkswagen CSX Instructor: Maria Strydom Go8 AFF5300 Case Studies in Finance Business and Economics Technical Content Readings: Chapter 5 from John C. Hull “Risk management and financial institutions” International Edition (2nd). Pearson. Available from the M onash library Derivatives and their use Derivatives Derivatives are a form of contingent claim – their value is contingent upon…
DFA CASE 1)Higher E[r], lower var and stdev compared to benchmark 2) Though a says DFA outperformed CAPM, low r2 means not a good predictor of DFA returns 3) DFA most likely did not have excess rets compared to the classes of stock which tend to do better than the market as a whole (3 factor) 4) No, not invest my money into. Low sharpe ratio! 5) DFA offers low cost index funds in a variety of asset classes. They sell through fee-only certified financial planners and only to wealthy, infrequent…
Case 27 1. For this question, ignore the forecasted receivables collection pattern in Exhibit 27.4. Using paper and pencil (do NOT use the template), calculate the projected ACP and average daily sales (ADS) under the following conditions: 30% of customers pay on the 10th day 50% of customers pay on the 30th day 20% of customers pay on the 60th day 800,000 units sold per year @ $5 per unit = $4,000,000/360 Remember, since there are no balance sheets or operating statements, you will have…
The housing finance industry remains in a sweet spot, with several key drivers such as favourable demographics (a young population; median age of 26 years), large unmet housing demand, low urbanization, low mortgage penetration versus global peers, and improving affordability. Moreover, with falling inflation and wage inflation staying steady, affordability will only go up in the next couple of years. The government's particular focus on housing-for-all should sustain the housing sector for the…
depreciation, and lease expenses are fixed and prorated where required but is not adjusted for inflation. Weighted Average Cost of Capital To calculate the weighted average cost of capital, we first calculated the market value of debt and equity. The case exhibits provided the necessary data to calculate the market value of debt and equity. The weight of debt and equity were calculated to be around 32 and 68 percent respectively. Appendix will provide the detailed steps we used to calculate the WACC…
Solution to Case 23 Evaluating Project Risk It’s Better to Be Safe Than Sorry! Questions: 1. What seems to be wrong with the way the NPV of each project has been calculated? Indicate without any calculations, how Pete and John should go about recalculating the projects’ NPVs. The NPV of each project has been calculated by discounting the cash flows at the 8% before-tax cost of debt. This is incorrect. Since the company has debt, preferred stock and common…
1) How has Adecco managed to outperform its rivals in the staffing industry? What is the rationale for acquiring Olsten? Adecco has been able to outperform rivals due to its consistent three-pronged strategy to become the “employer of choice.” The three goals of this strategy were: Achieve rapid growth both organically and through acquisitions. Adecco’s historical data showed a strong relationship between growth and returns, and thus was able to achieve high total return to shareholders by pursuing…
Target Corporation Michael Holt Dontae Threatt Target Corporation was founded in 1902 in Minneapolis as the Dayton Dry Goods Company, though the first Target store was opened in 1962 in nearby Roseville, Minnesota. Not until 1995, was the first Super Target was built. In 1999 Target launched their website Target.com. Target grew and eventually became the largest division of Dayton Hudson Corporation, culminating in the company being renamed as Target Corporation in August 2000. The Corporation…
2.5.5 Finance One of the existing string of all profitable action is Finance. The provision of start-up resource and money to fit functional expenses will be provided by access to finance. Employers who may be facing lack of a start-up finance as a challenge in estimating start-up finance must not be abondoned. Lack of savings and ignorance of the origins of finance are some of the other factors that casues employers to face challenges in finance. It is rather unhappy that the problem with access…
Case 9: Horniman Horticulture 1. Assess the strengths and weaknesses of the company Horniman Horticulture. Strengths * Constantly growing firm with increasing revenue (15.5% in 2005), net profit, total assets and high returns on equity (5.1% in 2005) * Large product offerings, with a recent increase of 40%. Majority of offerings are in high demand * Management (in regards to Bob Brown) has good ties with employees and customers * Tax expense hasn’t drastically…
