For the summary, I would like you to submit the following to me 2 page maximum Approach the case from the prospective of a banker at Northrop National Bank Provide a summary of the case - 0.5 page max...

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  1. For the summary, I would like you to submit the following to me



    • 2 page maximum

    • Approach the case from the prospective of a banker at Northrop National Bank

    • Provide a summary of the case - 0.5 page max

    • Provide a recommendation on whether a loan should be extended or not. Support your argument - 0.5 page max

    • Highlight key considerations the bank should consider with its credit decision

      • Financial

      • Non-financial



    • Perform basic financial analysis of the Operating Statement and Balance Sheet

      • Identify trends

      • Compute basic financial ratios

        • Current Ratio = Current Assets / Current Liabilities

        • Quick Ratio = (Current Assets - Inventory) / Current Liabilities

        • Debt Ratio = Total Liabilities / Total Assets

        • Profit Margin = Net Income / Net Sales

        • Return on Assets = Net Income / Total Assets





    • Will the business be able to make the loan payments?







Answered 1 days AfterSep 17, 2022

Answer To: For the summary, I would like you to submit the following to me 2 page maximum Approach the case...

Tanmoy answered on Sep 19 2022
57 Votes
Butler Lumber Company        4
BUTLER LUMBER COMPANY
Table of Contents
Introduction    3
Analysis    3
Conclusion    5
References    6
Introduction
    It is
observed in the case of Butler Lumber Company that the company does not have sufficient funds for financing the future operations of the company. Also, there was a cash shortage which was been experienced by the company and necessitated issue of debt for future business operations. Further, the company is under tremendous pressure as there is payment which needs to be made to Mr. Stark for purchase of the shares at an amount of $105000 of the company. Since, the majority of the payment was being made, it was Butler who still owes Stark another $35000 which he intended to finance through another loan. The company is also using their cash reserves for repayment of the liabilities which is not a positive indicator and must be used only for the purpose of investment. It can be observed that the cash flow from operations, the cash balances were being reducing on an annual basis with a total decline of $17000 from 1988 to 1990.
Analysis
Recommendation on whether a loan should be extended or not:
There are two options available for Butler Lumber Company to support the operations. Firstly, it will be in the form of a loan which will be received from Suburban National Bank to the amount of $250000 which is secured with real property. This has resulted in an increase in the risk...
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