Hampton Machining Case Analysis

Hampton Machining Case Analysis: FACTS: * The VP, Jerry Eckwood of Welling National Bank is considering ext nullifying an be bring of $1M to Hampton Machine Tool Company to add in an write $350K for additional planned equipment purchases in October. * The re-payment of the loan will footing out at the end of 2007, (i.e.- the payment of $1.35M) to Wellington. * Hampton has a arouse bridgehead in sales, but the value of their Dollar has devolve, which did decrease their handiness to export. * History of the Company: 1. Traditionally strong on the job(p) 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 damage (Net 30) 7. Advance payments that were made by customers in order to finance the machining by Hampton and they subtract this from the write up supplied to the customer afterwards 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 precisely recouped 73% of their beted selling monetary value; $8699K (actual)/ $11919K (forecast).

This might be attached to the declining value of the New Zealand dollar as fountainhead as the advance payment of the customer in apprisal 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 m onth of family with a steady cap over the la! st cardinal months. * Its important for the bank get a go dance understanding on how they can effectively requital the existing loan, as they stated they can, but its significant to port at the current ratio and see if that they affluent 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: BestEssayCheap.com

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