Hanson Case Essay

1247 Words Oct 18th, 2012 5 Pages
Hanson&Ski&Products&Case&Write3Up&
&
Question& 1:& Using& the& concept& of& balance& sheet,& I& prepared& the& balance& sheet& on&
Exhibit&1.&I&estimate&that&the&size&of&the&commercial&bank&loan&will&be&$1,650,000&on&Mar&
31,&1987.& At&that&time,&the&collateral&will&be& $2,701,100&(collateral=&1741*&80%+&1869*&
70%=2,701,100).& Comparing& with& the& Note& Payable33Banks& account,& $1,650,000,& the& collateral&is&greater&than&Note&Payable3Bank.& Additionally,& Note&Payable—Banks&is&less& than&$4,200,000.&Therefore,&the&budget&plans&are&feasible.& &
Question& 2:& The&idea&to&calculate&the&Note& payable& size&is&that&the&company&had&to& balance&its&cash&account&to&$100,000,&meaning&that&whenever&the&cash&account&was&less& than&
…show more content…
ded&$2,176,000&
For&Q2,&collateral&$4,847,000>&Note&Payable3Banks&needed&$3,727,000&
For&Q3,&collateral&$4,607,400>&Note&Payable3banks&needed&$3,041,000&
For&Q4,&collateral&$2,701,100>&Note&Payable3Banks&needed&$1,650,000& &
Thus,&the&company&has&sufficient&collateral&for&each&quarter.& &
Question& 3:& I& prepared& quarterly& balance& sheet& in& Exhibit& 3.& To& determine& the& financial&health&of&the&company,&I&calculated&the¤t&ratio.&In&Q1,&the&ratio&was&0.73& which&was¬&good,&meaning&that&the&company&had&risks&to&pay&for&its¤t&liabilities.&
The&ratio&in&other&three&quarters&was&respectively&1.02&in&Q2,&1.24&in&Q3,&and&1.14&in&Q4.&
The& ratios& indicated& that& the& company& almost& stayed& in& a& good& health& of& finance.&
However,& in& Q2& and& Q3,& the& company& had& very& high& account& receivable,& which& would& force&the&company&to&borrow&money&from&lenders.& & &
Question&4:&I&calculated&the&Note&Payable—Banks&from&October&to&November&to&see&
if& the& company& can& pay& off& the& loan& on& time& (see& Exhibit& 4).& I& found& out& that& on&
November& the& company& could& not& pay& off& the& stockholder& loans& due& to& exceeding& the& maximum&of&its&credit,&$4.2&million.&On&November,&the&company’s&Note&Payable—Banks& account& will& be& $4.65& million& if& it& paid& off& the& loans.& For& my& advice,& the& company& can& either&collect&December’s&account&receivable&earlier&to&fill&the&$450,000&gap&or& change& its& current& collection&

Related Documents