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Butler Lumber Company

CLARKSON LUMBER COMPANY


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

1993
Net sales
Cost of goods sold:
Beginning inventory
Purchases
Ending inventory
Total cost of goods sold
Gross Profit
Operating expenses
Interest expense
Net income before income taxes
Provision for income taxes
Net income
See notes to case exhibit 1.

1994

1995

1st Qtr
1996

$2,921

$3,477

$4,519

$1,062

$330
$2,209
$2,539
$337
$2,202
$719
$622
$23
$74
$14
$60

$337
$2,729
$3,066
$432
$2,634
$843
$717
$42
$84
$16
$68

$432
$3,579
$4,011
$587
$3,424
$1,095
$940
$56
$99
$22
$77

$587
$819
$1,406
$607
$799
$263
$244
$13
$6
$1
$5

Butler Lumber Company

CLARKSON LUMBER COMPANY


Ex. 2: Balance Sheets at December 31, 1993-95, and March 31, 1996 (thousands of dollars)

1993

1994

1995

1st Qrtr
1996

Cash
Accounts receivable, net
Inventory
Current assets
Property, net
Total assets

$43
$306
$337
$686
$233
$919

$52
$411
$432
$895
$262
$1,157

$56
$606
$587
$1,249
$388
$1,637

$53
$583
$607
$1,243
$384
$1,627

Notes payable, bank


Notes payable, Holtz (current)
Notes payable, trade
Accounts payable
Accrued expenses
Term loan, current portion
Current liabilities
Term loan
Note payable, Mr. Holtz
Total liabilities
Net worth
Total liabilities & net worth

$0
$0
$0
$213
$42
$20
$275
$140
$0
$415
$504
$919

$60
$100
$0
$340
$45
$20
$565
$120
$100
$785
$372
$1,157

$390
$100
$127
$376
$75
$20
$1,088
$100
$0
$1,188
$449
$1,637

$399
$100
$123
$364
$67
$20
$1,073
$100
$0
$1,173
$454
$1,627

See notes to case exhibit 2.

CLARKSON LUMBER COMPANY


Selected statistics: 1993 through 1995
1993

1994

1995

Average

Percent of sales
Purchases
Cost of goods sold
Operating expenses
Cash
Accounts receivable
Inventory
Fixed assets (net)
Total assets

75.6%
75.4%
21.3%
1.5%
10.5%
11.5%
8.0%
31.5%

78.5%
75.8%
20.6%
1.5%
11.8%
12.4%
7.5%
33.3%

79.2%
75.8%
20.8%
1.2%
13.4%
13.0%
8.6%
36.2%

77.8%
75.6%
20.9%
1.4%
11.9%
12.3%
8.0%
33.7%

Percent of total assets


Current liabilities
Long-term liabilities
Equity

29.9%
15.2%
54.8%

48.8%
19.0%
32.2%

66.5%
6.1%
27.4%

48.4%
13.5%
38.1%

Current ratio
Return on sales
Return on assets
Return on equity

2.49
2.1%
6.5%
11.9%

1.58
2.0%
5.9%
18.3%

1.15
1.7%
4.7%
17.1%

1.74
1.9%
5.7%
15.8%

CLARKSON LUMBER COMPANY


Sources and Uses of Funds, 1993 - 1995, (thousands of dollars)
1993 to 1994

1994 to 1995

Sources of Funds:
Retained Earnings
Increase in Trade Payables
Increase in Accrued Expenses
Increase in Bank notes payable
Total Sources

1993 to 1995

$68
$127
$3
$60
$258

$77
$163
$30
$330
$600

$145
$290
$33
$390
$858

16.9%
33.8%
3.8%
45.5%
100.0%

Uses of Funds:
Increase in Cash Account
Increase in Accounts Receivable
Increase in Inventory
Increase in Fixed Asset Account
Buyout of Mr. Holtz
Decrease in Long Term Debt
Total Uses

$9
$105
$95
$29
$0
$20
$258

$4
$195
$155
$126
$100
$20
$600

$13
$300
$250
$155
$100
$40
$858

1.5%
35.0%
29.1%
18.1%
11.7%
4.7%
100.0%

CLARKSON LUMBER COMPANY


Cash from Operations, 1993 - 1995, (thousands of dollars)

Cash From Operations:


Retained Earnings (=WC from Operations)
Less:
Change in Accounts Receivable
Change in Inventory
Plus:
Change in Trade Payables
Change in Accrued Expenses
Equals:
Cash from Operations
Sources of Cash:
From Operations
From Bank Loans
Total Sources of Cash
Uses of Cash:
For Fixed Assets
For LTD Paydown
For Paydown of buyout debt
Total Uses of Cash
Change in Cash Holding:

1993 to 1994

1994 to 1995

1993 to 1995

$68

$77

$145

$105
$95

$195
$155

$300
$250

$127
$3

$163
$30

$290
$33

($2)

($80)

($82)

($2)
$60
$58

($80)
$330
$250

($82)
$390
$308

$29
$20
$49

$126
$20
$100
$246

$155
$40
$100
$295

$9

$4

$13

CLARKSON LUMBER COMPANY


Cash to cash cycle (dollars)
Change from
1993 to 1995
$4,378
10.7
(0.7)
$3,753
4.2
16.1
(1.2)

1993
$8,003
38.2
6.5
$6,052
55.7
35.2
58.7

1995
$12,381
48.9
5.8
$9,805
59.9
51.3
57.5

Increase in AR due to
Increased Average Collection Period:
Increased Sales:

$306,000

$606,000

$300,000
$85,707
$214,293

Increase in Inventory due to


Reduced Inventory Turnover:
Increased Sales:

$337,000

$587,000

$250,000
$25,303
$224,697

Increase in Payables due to


Slower Payment:
Increased Purchases:

$213,000

$503,000

$290,000
$97,457
$192,543

Increase in Net Working Assets due to


Reduced Activity Ratios:
Increased Operating Activity:

$430,000

$690,000

$260,000
$13,553
$246,447

Average Daily Sales


Average Collection Period: (AR Days)
Inventory Turnover
Average Daily Purchases
Days of Inventory
Days of Payables (Trade Notes and Accounts)
Days Cash to Cash:

CLARKSON LUMBER COMPANY


Projected income statement for 1996 (thousands of dollars)
1996
Net sales
Cost of goods sold:
Beginning inventory
Purchases (77.8% of sales)

$5,500
$587
$4,279
$4,866
$708
$4,158
$1,342
$1,150
$193
$69
$91
$171
$46
$125

Ending inventory
Total cost of goods sold (75.6% of sales)
Gross Profit
Operating expenses (20.9% of sales)
Operating Profit
Purchase Discounts*
Interest expense**
Net income before income taxes
Provision for income taxes
Net income
*Assume purchase discounts of 2% taken on all purchases after April 1, 1991.
**11% on the average outstanding balance.

Projected balance sheet for December 31, 1996 (thousands of dollars)


1996
Assets:
Cash (1.4% of sales)
Accounts recievable, net (11.9% of sales)
Inventory
Current Assets
Property, net (dollar amount)
Total Assets

$77
$655
$708
$1,440
$410
$1,850

Liabilities:
Accounts payable (10 days of purchases)
Accrued expenses (1.5% of sales)
Long-term debt, current portion
Bank note payable (plug)
Current Liabilities
Long-term debt
Total Liabilities
Net worth
Total Liabilities plus net worth

$117
$83
$20
$976
$1,196
$80
$1,276
$574
$1,850

Balance (Assets - Liabilities plus net worth)

$0