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Butler Lumber Company

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on 28 January 2014

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Transcript of Butler Lumber Company

Butler Lumber Company
As an Adviser for Mr. Butler
Encourage him to take the line of credit if offered by Northrop National Bank
The company is growing rapidly and needs a source that is sufficient enough to meet the growing needs.
Increasing: Return on invested capital, return on equity, growth in fixed asset turnover
As an Adviser for Northrop National Bank
I would encourage NNB to extend the line of credit in the amount of $465,000.00.
Debt Ratio has slightly increased, but still at a low rate so they shouldn't be alarmed at this point.
Debt to equity ratio has decreased.
Projected growth in 1990 suggests the company is more than capable of taking on a line of credit in the amount of $465,000.00
Pro Forma Balance Sheet (1990)
Financial Ratios
The Situation
Mark Butler is looking for a loan to satisfy the needs of Butler Lumber Company
He is interested in a line of credit from Northrop National Bank (not to exceed $465,00.00.)
He currently has business relations with Suburban National Bank (loan not to exceed $247,000.00)
Pro Forma Income Statement
Full transcript