MBA 614
Plumb Parts Supply
Key Problem
The key line of work in this case is whether or not the bank should lend Plumb Part Supply (PPS) - and its relatively new possessor 160,000$ to purchase a new vehicle and new machinery.
The company would require an additional $25,000 in funding to meet its short-run cash requirements in the winter season.
The business would have to produce adequate money to cover the $26,200 principal and interest live each year.
The business must also generate enough money to allow for its owner to draw a net income of at least $35,000.
Situation Analysis
Strengths
Proven family business with an forward-looking and entrepreneurial former owner (James Taggart) and a well-schooled, well belowgo current owner (Sean Taggart).
National exposure through occupy marketing activities (semi-annual trade shows & 52-page catalogue).
Demonstrated ability to grow under unfavorable external conditions (sales growth in the early 1990s).
tumescent sales growth and increased profitability in 2003.
PPS has a track record of being customer-focused and as a conduce possesses a loyal customer base.
PPS has solid financial ratios above the application average in many cases.
Weaknesses
The construction patience in Canada is seasonal; this poses a potential cash coquet in the winter months.
Although PPSs liquidity is good, the company does not carry any cash. All current assets are secure up in accounts due and inventory. Due to the high receivable period (71.6 days in 2003), they can potentially be exposed if for some reason they run into difficulty accumulation their accounts receivables.
Opportunities
In 2004, the economic forecast is positive for the construction industry because of low interest rates and high consumer confidence.
Construction crossways Canada is expected to increase over the next few years.
Threats
In the year...If you want to get a full essay, order it on our website: Ordercustompaper.com
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