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    Clarksnex

    Uploaded by

    Joan Madu
    The document summarizes financial information for Clarkson Lumber Co. for the years 1993-1995 and first quarter of 1996. It shows the company's net sales, costs of goods sold, operating expenses, earnings, assets and liabilities. Clarkson Lumber saw increasing net sales and profits over this period. However, the company also took on significant bank and trade debt, increasing its current liabilities from 1995 to 1996.

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    © All Rights Reserved
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    Clarksnex

    Uploaded by

    Joan Madu
    82 views3 pages
    The document summarizes financial information for Clarkson Lumber Co. for the years 1993-1995 and first quarter of 1996. It shows the company's net sales, costs of goods sold, operating expenses, earnings, assets and liabilities. Clarkson Lumber saw increasing net sales and profits over this period. However, the company also took on significant bank and trade debt, increasing its current liabilities from 1995 to 1996.

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    The document summarizes financial information for Clarkson Lumber Co. for the years 1993-1995 and first quarter of 1996. It shows the company's net sales, costs of goods sold, operating expenses, earnings, assets and liabilities. Clarkson Lumber saw increasing net sales and profits over this period. However, the company also took on significant bank and trade debt, increasing its current liabilities from 1995 to 1996.

    Copyright:

    © All Rights Reserved
    Download as XLS, PDF, TXT or read online from Scribd
    Download as xls, pdf, or txt
    82 views3 pages

    Clarksnex

    Uploaded by

    Joan Madu
    The document summarizes financial information for Clarkson Lumber Co. for the years 1993-1995 and first quarter of 1996. It shows the company's net sales, costs of goods sold, operating expenses, earnings, assets and liabilities. Clarkson Lumber saw increasing net sales and profits over this period. However, the company also took on significant bank and trade debt, increasing its current liabilities from 1995 to 1996.

    Copyright:

    © All Rights Reserved
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    You are on page 1of 3

    Exhibit 1

    Clarkson Lumber Co.


    Exhibit 1 Operating Expenses for Years Ending December 31, 1993-1995, and for First Quarter 1996
    (thousands of dollars)

    1st Quarter
    1993 1994 1995 1996
    Net sales $2,921 $3,477 $4,519 $1,062 a
    Cost of Goods Sold:
    Beginning inventory 330 337 432 587
    Purchases 2,209 2,729 3,579 819
    $2,539 $3,066 $4,011 $1,406
    Ending inventory 337 432 587 607
    Total Cost of Goods Sold $2,202 $2,634 $3,424 $799
    Gross profit 719 843 1,095 263
    Operating expensesb 622 717 940 244
    Earnings before interest and taxes $97 $126 $155 $19
    Interest expense 23 42 56 13
    Net income before income taxes $74 $84 $99 $6
    Provision for income taxesc 14 16 22 1
    Net income $60 $68 $77 $5

    aIn the first quarter of 1995, sales were $903,000 and net income was $7,000.
    bOperating expenses include a cash salary for Mr. Clarkson of $75,000 in 1993; $80,000 in 1994;
    $85,000 in 1995; and $22,500 in the first quarter of 1996.
    cClarkson Lumber was required to estimate its income tax liability for the current tax year and pay four
    quarterly estimated tax installments during that year. The first $50,000 of pretax profits were taxed
    at a 15% rate; the next $25,000 were taxed at a 34% rate; and profits in excess of $100,000 but
    less than $335,000 were taxed at a 39% rate.

    Page 1
    Exhibit 2

    Exhibit 2 Balance Sheets at December 31, 1993-1995, and March 31, 1996 (thousands of dollars)
    1st Quarter
    1993 1994 1995 1996
    Cash $43 $52 $56 $53
    Accounts receivable, net 306 411 606 583
    Inventory 337 432 587 607
    Current assets $686 $895 $1,249 $1,243
    Property, net 233 262 388 384
    Total Assets $919 $1,157 $1,637 $1,627

    Notes payable, banka $ -- 60 390 399


    Note payable to Holtz, current portionb -- 100 100 100
    Notes payable, trade -- -- 127 123
    Accounts payable 213 340 376 364
    Accrued expenses 42 45 75 67
    Term loan, current portionc 20 20 20 20
    Current liabilities $275 $565 $1,088 $1,073
    Term loanc 140 120 100 100
    Note payable, Mr. Holtzb -- 100 0 0
    Total Liabilities $415 $785 $1,188 $1,173
    Net worth 504 372 449 454
    Total Liabilities and Net Worth $919 $1,157 $1,637 $1,627

    aInterest is computed on the average outstanding loan balance at the rate of prime plus 2 1/2%.
    bInterest is fixed at 11% times the outstanding balance.
    cInterest is fixed at 10.0% times the outstanding balance; the term loan is secured by the fixed assets
    and is repayable in semiannual installments of $10,000.

    Page 2
    Exhibit 3

    Exhibit 3 Selected Statistics on Lumber Outlets


    Low-Profit High-Profit
    Outletsa Outletsa
    Percent of sales:
    Cost of goods 76.9% 75.1%
    Operating expense 22.0% 20.6%
    Cash 1.3% 1.1%
    Accounts receivable 13.7% 12.4%
    Inventory 12.0% 11.6%
    Fixed assets, net 12.1% 9.2%
    Total Assets 39.1% 34.3%

    Percent of total assets:


    Current liabilities 52.7% 29.2%
    Long-term liabilities 34.8% 16.0%
    Equity 12.5% 54.8%

    Current ratio 1.31 2.52

    Return on sales -0.7% 4.3%


    Return on assets -1.8% 12.2%
    Return on equity -14.3% 22.1%

    aDefined as the bottom 25% and as the top 25% of all contributors, based on return on sales.

    Page 3

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