Analysis Of Hampton Machine Tool Company Financing Finance Essay

Analysis Of Hampton Machine Tool Company Financing Finance Essay Introduction: Hampton Machine Tool Company, a machine tool manufacturer, was founded in 1915. Until 1979, the company had successfully forecasted the severe cyclical fluctuations characteristic of the industry. The companys primary customer base included the aircraft and automobile manufacturers in the St. Louis area. During the mid to late 1960s, Hampton was very profitable due to a strong automobile market, and, to the heavy defense spending associated with the Vietnam War. However, in the mid-1970s, Hamptons profitability slowed down with the United States withdrawal from Vietnam War and the oil embargo. By the late 1970s, they had a larger share in the market due to their competitors who were unable to make it through these difficult times, while Hampton managed to stabilize. Case Background: Ten years prior to December, 1978, the company had no debt because it had conservative financial policies, which maintained a strong working capital position as a buffer against economic uncertainty. In December,1978, Hampton requested a $1 million loan from the St. Louis National Bank. The loans terms were a monthly interest payment at a rate of 1.5%, with the principal to be paid back at the end of September, 1979. Now (September of 1979), Benjamin G. Cowins, president of Hampton, has asked to renew the initial loan until end of 1979, and, has requested an additional loan of $350,000 with promise of repayment at the end of December, 1979 with an interest rate of 1.5% per month. This additional loan is required for an update of their machinery which hasnt been done since the economy went into a recession in the early 1970s. For the last several months, Hamptons shipment schedule has been upset because they have had to wait for parts from their suppliers. On August 31, the accumulation of seven machines cost about $1,320,000, in addition to the installation cost for these parts. They received the parts last week, and will be able to complete a number of machines within next few weeks. The reduction in work in progress of about $1,320,000 is due to not receiving the electronic control mechanisms on time. However, the remainder of their work in progress inventories will probably remain steady for the foreseeable future because of their capacity rate of production. In July and August, Hampton bought raw materials beyond their immediate needs to be assured of completing their order schedule to be shipped by the end of the year. Therefore, they currently have accumulated about $420,000 worth of scarcer components above their normal raw materials inventories. They estimate it will be used by the end of the year. Because they bought ahead this way, they expect to cut raw material purchases to about $600,000 a month in each of the four remaining months of 1979. The companys revised shipment estimates are: September, $2,163,000; October, $1,505,000; November $1,604,000; December, $2,265,000. The shipment estimates include a $2,100,000 order for the General Aircraft Corporation. Hampton is now scheduled to ship against this order as follows: September, $840,000; October, $840,000; November, $420,000. Because General Aircraft gave Hampton an advance payment of $1,566,000 on this order, the company will be due nothing on these shipments until their $1,566,000 credit with Hampton is exhausted. Hamptons assuming accruals will remain about the same on August 31, and their monthly outlay for all expenses other than interest and raw materials purchases should be around $400,000 per month. Due to poor economic conditions and the companys desire to conserve cash; they have spent little on new equipment in the last several years, 1979. This has contributed somewhat to the difficulties they have had in maintaining production at full capacity this year. As a result, Hampton has requested an additional $350,000 loan at an interest rate of 1.5% monthly, with promise of repayment at the end of December, 1979. This loan is necessary to purchase certain needed equipment to maintain the production. The tax people estimated the equipment will qualify for a 10% investment tax credit. The company is scheduled to pay $181,000 in taxes on September 15 and December 15. Also, Mr. Cowins has suggested paying $150,000 dividends to stockholders in December. Analysis: The Hampton Machine Tool Company is facing problems in paying its $1 million loan and requesting for a new loan from the St. Louis National Bank. By following Mr. Cowins plan, the company will be short $332,000 (Exhibit 1) in December. Hampton, a profitable firm, has fallen behind on their orders, and Mr. Cowins recommends that they need more financing to purchase certain needed equipment. Hampton has notified the St. Louis National Bank that they will not be able to repay in September. Also, they have requested an extension. For the past month or more, Hampton has been operating at full capacity, and with additional back orders, which has put them behind in their shipment of orders. In addition, their shipment schedule has been upset because they have been waiting for electronic control mechanisms from their suppliers. The falling behind has also caused them to have less than what is needed for accounts receivables turnover. The cash budgets and statement of sources and uses yield negative results concerning the principal payment of the loan for December (Exhibit 1), based on Mr. Cowins plan. This analysis is based on projected sales, dividend payments and tax payments. Consequently, the sales projects and accounts receivables are 30 days net; if not paid on time, then this could change the results significantly by putting the company in more of a financial bind. Based on my forecasts it seems that Mr. Cowins is incorrect about being able to repay the loan in December, but Hampton should be able to repay in January with more precise planning. Hampton used the initial loan plus $2 million in excess cash to repurchase a substantial fraction of its outstanding common stock, because it had decreased sufficiently in value. Although they had good intentions to increase the companys stock value, their finances have suffered because of the repurchase. Mr. Cowins offer to pay $150,000 in dividends in December is not reasonable, because Hamptons finances will suffer, causing them to have negative cash flows. (Exhibit 1) Recommendation: It is obvious that Hampton cannot afford to repay the loan in December, if they proceed with their original plans. The company will have a negative cash flow in December according to Exhibit 1. They should request a one-month extension on the loan, as they cannot afford to make a loan payment in December. Extending the loan repayment one month until January allows for account receivables of December to become collected, because of the company collection policy of 30 days net. This means Hampton will not have to go into the negative to pay the loan in December, keeping cash flow at an expectable level which is $1,168.50. (Exhibit 2) Hampton cannot afford to make a dividend payment in December, regardless of their willingness to do so. Canceling the dividend payment will free up $150,000 in December, keeping the net cash flow in the positive (Exhibit 2), which compensates for the $350,000 loan payment. This also helps keep the net cash flow positive in December, as well as waiting for accounts receivables of $2,265,000 to come in January for the final payment. This makes the company profitable for the future, and, in turn, the stock will not become valueless. Conclusion: My recommendation for Hampton Machine Tool Company is they should request a one month extension on the loan, and cancel the dividend payment to make the company more profitable. Also, this would strengthen Hamptons relationship with the bank by paying off both loans. Based on the forecasted cash budget, Mr. Jerry Eckwood, vice-president of the St. Louis National Bank, should reject the $350,000 loan request based on the current terms proposed by Hampton Machine Tool Company. According to Exhibit 1, there is an inability to repay the initial loan. The numbers fall short of being able to repay the original loan in December without even considering the requested loan. However, with the proper financial adjustments, both loans can be fully repaid by January. For relationship reasons, Mr. Eckwood may want to grant the loan, as long as the terms are reworked to help guarantee, that the bank will get paid. The extension of the loan and cancelation dividends will leave Hampton in a manageable situation, allowing them to continue to be a profitable customer of the bank. The St. Louis National Bank should bring up the solutions that I mentioned above, but Mr. Eckwood will want to make sure that the bank puts Hampton on a repayment plan, so, that in the nea r future they can expect to collect the principal of the outstanding loans. If I was the St. Louis National Bank, I would have to reject the loan on the current terms proposed by Mr. Cowins, because the Hampton Machine Tool Company shows an inability to repay the loan, based on the numbers they have forecast.

Travel and tourism

Student Name: Cheryl Facial Define Tourism: Tourism is when someone travels within their own country or to another country such as Spain, weather it is for leisure or business reason and for all other purposes. Types of Tourism Description: Example: Describe Domestic: A domestic holiday Is where someone who lives In the UK travel to another part of the LIKE. An elderly couple who lives Bradford goes on a two week holiday to Scarborough. Describe Outbound: An outbound holiday is when someone who travel out of the UK to a different entry.A group of friends from Liverpool goes on holiday to Pizza to have fun. Describe Inbound: An inbound holiday is when someone who live in a different country that comes to the I-J. A Chinese doctor travel to London for a medical convention. VISITOR TYPE Identify Tourism type (domestic/inbound/outbound. When someone goes on holiday to relax and have fun. A family of five goes to Disneyland Paris. This is an outbound holiday. When someone stays in they ow n country or goes to another country for a business eating.A business woman from London travel to Paris for meeting This Is an outbound holiday. 1 OFF When someone travels to visit family and friends. A girl from Bradford goes to London to visit her auntie. This is a domestic holiday. EDUCATION When a group of school student goes on an educational trip. To Normandy for a history trip. SPORT Year ten student goes When someone goes to a sporting event trip such as football. A football fan from Spain come to the I-J to watch the final of the champion league This is an inbound holiday.

Outline the Nature of Supermarkets Power on the High Street and Beyond Essay

Outline The Nature of Supermarkets Power On The High Street and Beyond. This essay is looking at the power of supermarkets and how they use this power. The word power is often used to â€Å"denote influence, control or domination† (Allen, 2009, p. 9) Supermarkets use this power over suppliers, workers, Councils, consumers and other shops and there are conflicting views as to whether this power is used for the good of everyone or at the expense of everyone other than the supermarkets themselves or as Dennis Wrong (1977) calls it Positive Sum Game- â€Å"where all parties involved benefit to some extent† or Zero Sum Game- â€Å"where supermarkets wield their power at the expense of others† (Allen, 2009, p. 70) Supermarkets due to their sheer size and buying power have a huge advantage over the small independent high street shops. They offer a massive choice of products at a low price because they are able to buy in large quantities at discounted prices, sometimes even below cost price. These out of town supermarkets have convenient parking and consumers are able to do all their shopping in one place, from food, clothing, electrical equipment, financial services, gas and electricity etc†¦ This all makes shopping in these retail parks easier and cheaper for the consumer and the smaller independent high street shops are unable to match these prices, choices and convenience and are therefore unable to compete against the giants. As we’ve seen a move towards more out-of-town, car-dependent stores with large-format retail dominating, its driven trade away from town centres which has clearly had an impact on the small shops that are there, and we see approximately fifty small shops, independent shops, closing every week† Helen Rimmer (Friends of the earth) (‘Evidence in the social sciences’, 2009 track 1) The big supermarkets have also introduced small high street Metro and Express stores to put further pressure on the independents and gain those consumers without cars and who are unable to get to the out of town retail park. According to Helen Rimmer (Friends of the Earth) â€Å"There’s been a study of the impact of Tesco Express which is the Tesco convenience store when they’ve moved into an area, that generally led to a decline, in the small shops locally, of about 30 to 40 per cent† (‘Evidence in the social sciences’, 2009 track 1) To keep their prices low, Supermarkets are putting huge pressures on suppliers both in the UK and globally, they are often dictating how much they will pay and even the size, shape and colour of fruit and vegetables. To meet these demands suppliers are being forced to cut their cost to the bare minimum and in many cases are operating at a loss, forcing the smaller suppliers out of business. There is massive wastage, as food is rejected if it doesn’t conform to the set cosmetic appearance that the supermarkets have imposed, often sacrificing taste and flavour for appearance. Farmers have been known to plough crops back into the land when they have been rejected or the supermarket wants to pay a ridiculously low price. The cost of this wastage is usually met by the supplier, as are the ‘buy one get one free’ (BOGOF) deals that the supermarkets offer to entice their customers. This cost cutting is passed onto their workers both in the UK and abroad. In the UK they are more often than not migrant agency workers who pick and sort the salad crops, who are paid very low wages, sometimes below the cost of living. â€Å"There is a high price to be paid for cheap goods and that cost is borne one-sidedly by the weakest and least powerful groups in the supply chain† (Allen, 2009, p. 3) Meanwhile abroad, cheap clothing is produced in sweatshops, with exploited workers enduring poor conditions, long hours and being paid an inadequate wage. â€Å"The true cost of the cheap jeans and trousers, as well as the bargain-priced shoes, which line Asda’s and Tesco’s aisles, War on Want claim, is the absence of a living wage for workers in their supply chain† (Allen, 2009, p. 85) However the fact that this work is being sourced in Asia means that the clothing industry in these countries is expanding rapidly and this means work that was not there previously. These jobs are in demand by the locals as it means a way out of poverty for them, â€Å"the last thing a country like this wants is for the big retailers to stop sourcing their labour from them. That, it is pointed out, would threaten the steadily rising living standards of the garment workers†. (Allen, 2009, p. 91) Supermarkets use their power over local government to persuade them to allow the further development of new stores. This is done by a method called ‘Planning Gain’ in which they pay for civic facilities to be built i. e. : leisure centres and Doctors surgeries, in return for planning permission for a new store. These developments are Sometimes in run down, poor areas and the development of a new store can be interpreted as a good thing in helping the regeneration of the area, creating new jobs for the unemployed and encouraging new business into the area. Again there is controversy surrounding this, many believe it is for the good of the community and other believing it is â€Å"merely the latest in a series of opportunistic moves by them to get stores built at a time when planners and government frown upon out-of–town developments† (Allen, 2009, p. 4) The supermarkets are providing consumers with what they want. Cheap products in the current climate of recession are a necessity for many having to tighten their belts. The ease of having everything in one place makes it convenient to shop for those who have cars and can get to the out of town stores. â€Å"People like what supermarkets do and the efficiencies that come from the scale of their operations, the quality and choice that they’re able to offer, the prices that people find appealing are all reasons why people choose to shop in supermarkets. Richard Dodd (British retail consortium. )(‘Evidence in the social sciences’ 2009, track 1) There is no doubt that supermarkets are powerful and it is very often a zero-sum game for their suppliers, the supplier’s workforce, and the independent shops on the high street, when they wield this power against them. Town centres and the smaller independent shops are in decline, â€Å"12 per cent of town centre retail premises are now vacant compared with 4 per cent last autumn so that’s a threefold increase†. Richard Dodd (British Retail Consortium) (‘Evidence in the social sciences’ 2009, track 1) and many farmers are going out of business. The consumers however are getting what they want, but at what cost! In this consumer Society that we live in they are seduced by the choice and bargains and turn a blind eye to the lengths the supermarkets are prepared to go to give them this. The exploitation of the workers in the sweatshops of Asia, the bullying of the farmers to sell their milk, fruit and vegetables to them at the price they dictate and the small shops being put out of business. Yes supermarkets are powerful but at the end of the day it is the consumer who is enabling them to continue being so. â€Å"If customers like what a retailer is offering, they will choose that particular store or type of store and they’ll use it. If the retailer gets it wrong, the customers won’t show up and that retailer will very quickly go out of business. It is customers who have the power in all of this†. Richard Dodd (British retail consortium) (‘Evidence in the social sciences’ 2009, track 1)

The Things They Carried By Tim O Brien - 1226 Words

â€Å"A Love story in the making/ the affects of war† The Vietnam War was a long conflict lasting between 1955 to 1975 between the communist North and the democratic south with help from the United States. More than 3 million people, including 58,000 American troops were killed in the conflict. Tim O brien s short story â€Å"The Things They Carried† follows a platoon named alpha company during the peak of the Vietnam war led by first lieutenant Jimmy Cross who is very charismatic but in his mind he is unsure how to lead his squad because his mind tends to wander to a thought of a girl back home. Throughout the story he has overcome with emotions and guilt because he believes he his the reason for some of his squadmates death. â€Å"The Things They Carried† Embodies the hardship, reality, and price/toll of war, ultimately Tim O’brien writes this masterpiece as not of a war story, but as a love story and how that love changed a man. To begin, the narrator who we perceived to be O’brien himself tells the story in a third person perspective, describing the thoughts and actions of first lieutenant Jimmy Cross. As the story opens we are met by 1LT.Cross, who is carrying letters from a girl back home named â€Å"Martha, a junior at Mount Sebastian College in New Jersey† (O’brien 1-2) who he has deep feelings for but she does not feel the same for him. O’brien depicts this story as a love story because he wants the readers to feel connected to the characters and give themShow MoreRelatedThe Things They Carried By Tim O Brien892 Words   |  4 PagesThe Vietnam War was a long, exhausting, and traumatic experience for all of the soldiers and those who came with them. The Things They Carried, by Tim O Brien illustrates the different affects the war had on a variety of people: Jacqueline Navarra Rhoads, a former nurse during the Vietnam war, demonstrates these effects within her own memoir in the book, The Forgotten Veterans. Both sources exemplify many tribulations, while s haring a common thread of suffering from mental unpredictability. DesensitizationRead MoreThe Things They Carried By Tim O Brien1377 Words   |  6 Pageslove to have it as good as we do. Tim O’Brien’s The Things They Carried discusses many veterans who experience the burden of shame and guilt daily due to their heroic actions taken during the Vietnam War. The book shows you how such a war can change a man before, during, and after it’s over.     Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚   As I reflect on the many conflicts America has been a part of, none can compare to the tragedies that occurred in The Vietnam war. As told in The Things They Carried (O’Brien), characters such as NormanRead MoreThe Things They Carried By Tim O Brien1457 Words   |  6 Pagesthe theme pertains to everyone regardless of their background. It conveys the same ideas to people from all across our society. Lastly, a classic is timeless, which means it has transcended the time in which it was written. In Tim O’Brien’s novel, The Things They Carried, he offers a new, intriguing way to view war or just life in general and also meets all of the crucial requirements mentioned above to qualify it as a book of literary canon. Though this book is technically a war novel, many peopleRead MoreThe Things They Carried By Tim O Brien1242 Words   |  5 Pagesâ€Å"Tim O’Brien is obsessed with telling a true war story. O Brien s fiction about the Vietnam experience suggest, lies not in realistic depictions or definitive accounts. As O’Brien argues, absolute occurrence is irrelevant because a true war story does not depend upon that kind of truth. Mary Ann’s induction into genuine experience is clearly destructive as well as empowering† (p.12) Tim O’s text, The Things they Carried, details his uses of word choice to portray his tone and bias. Tim O’BrienRead MoreThe Things They Carried By Tim O Brien1169 Words   |  5 Pagesbut are set in the past and borrows things from that time period. A story that fits this genre of literature is The Things They Carried. The story is about Tim O Brien, a Vietnam veteran from the Unite States, who tells stories about what had happ ened when he and his team were stationed in Vietnam. He also talks about what he felt about the war when he was drafted and what he tried to do to avoid going to fight in Vietnam. The Things They Carried by Tim O Brien was precise with its portrayal of settingRead MoreThe Things They Carried By Tim O Brien1004 Words   |  5 Pages Tim O’Brien is a veteran from of the Vietnam War, and after coming home from his duty he decided to be a writer. His work â€Å"The Things They Carried† is about a group of soldiers that are fighting in the Vietnam War. The first part of the story talks mostly about physical items that each soldier carries, and also mentions the weight of the items as well. Though, there is one exception to the list of physical things. Lieutenant Cross is a character of the story, and Tim O’ Brien quickly states theRead MoreThe Things They Carried By Tim O Brien896 Words   |  4 PagesTrouble without a doubt is what First Lieutenant Jimmy Cross c arried around his shoulders because he was out in war, where mistakes happen. Lost and unknown of his surroundings he had to lead his men into safety, while destroying anything they found. First Lieutenant Jimmy Cross only holds onto one thing for hope and that is Martha, the woman who he hopes is a virgin to come back to. Tim O’ Brien introduces symbolism by adding a character that has a meaning of purity and a pebble, which symbolizesRead MoreThe Things They Carried By Tim O Brien Essay832 Words   |  4 PagesSummary: â€Å"By and large they carried these things inside, maintaining the masks of composure† (21). In Tim O’brien’s The Things They Carried, the American soldiers of the Vietnam War carry much more than the weight of their equipment, much more than souvenirs or good-luck charms or letters from home. They carried within themselves the intransitive burdens—of fear, of cowardice, of love, of loneliness, of anger, of confusion. Most of all, they carry the truth of what happened to them in the war—aRead MoreThe Things They Carried By Tim O Brien1369 Words   |  6 PagesMany authors use storytelling as a vehicle to convey the immortality of past selves and those who have passed to not only in their piece of literature but in their life as an author. In Tim O’Brien’s work of fiction The Things They Carried, through his final chapter â€Å"The Lives of the Dead,† O Brien conveys that writing is a matter of survival since, the powers of s torytelling can ensure the immortality of all those who were significant in his life. Through their immortality, O’Brien has the abilityRead MoreThe Things They Carried By Tim O Brien1407 Words   |  6 Pages       Our introduction stated that in â€Å"The Things They Carried,† author Tim O’Brien tells us not directly of the soldiers of Vietnam, or the situations they find themselves in, but about the things they carry on their shoulders and in their pockets. These â€Å"things† identify the characters and bring them to life.   I find that to be true as the author unfolds the stories about war and the uncommon things one carries in to war both inadvertently and on purpose.  Ã‚  Ã‚  As it was noted: Stories about war –