Cartwright Lumber Company Case

Cartwright walk Company I.Company Background & Situation Cartwright lumber company was locate in a suburb of a large urban center in the Pacific Northwest; its operations were limited to the retail distribution of lumber products in the local area. In 1994, Cartwright thump Company was established as a partnership by Mark Cartwright and his brother-in-law Henry Stark. However, in 2001, Cartwright brought out Henrys interest for $105,000 and incorporated the company. About 55% of the total sales of Cartwright Lumber Company were made in the six months from April through September. There were no sales representative; orders were taken solo over telephone. Sales volume had been largely on the derriere of successful price competition, made possible by careful control of operating expenses and by quantity purchases of material at substantial discounts. Besides, good relationship with suppliers and high loyalty of employees contributed to its success. Cartwright Lumber Companys financial status was promising; from 2001 to 2004, they experience an average sales increase rate of about 29.7% yearly. However, debt existed.

In order to buy off Starks interest, Cartwright got a loan of $70,000 in late 2001; the loan was secured by the three estates and buildings, carried an interest rate of 11%, and was repayable in every quarter installments at the rate of $7,000 a year over the following(a) 10 years. During the last two years, Cartwright Lumber Company was wretched for funds arising from the purchase of Starks interest in the business and the additional investment in working chief city associated with the companys increasing sale volume. The tentative discussions among Northrop Bank and Cartwright Lumber Company had been about a revolving secured 90-day dividing line not to exceed $465,000. Interest would be set on a floating-rate basis, which was about 10.5% under conditions in effect in early 2004. The problems were, how much should Cartwright borrow, should Northrop Bank approve the loan?... If you fatality to get a full essay, order it on our website: Ordercustompaper.com

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