Business > CASE STUDY > Cartwright Lumber Co. By Thomas Piper (Case Notes/ Answer with Free Case File) (All)
Cartwright Lumber Co. By Thomas Piper (Case Notes/ Answer with Free Case File)
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The Cartwright Lumber Company has been expanding rapidly for several years. Increases in working capital requirements have outrun the capacity of the company to generate funds from internal sources.... Part of the company’s available funds have also been used by Mr. Cartwright to buy out his partner, thereby further increasing the financial pressure on the company. The company has been forced to forgo taking discounts on accounts payable and to borrow in increasing amounts from its bank to maintain its expansion. Mr. Cartwright must decide whether to continue to expand and, if so, how to raise the necessary funds. The alternative that he is actively considering is to seek a new bank connection from which he can borrow larger, but secured, amounts than from his present bank. The bank must estimate the amount of funds needed by Mr. Cartwright, the probable schedule of repayment on its loan, and the nature and degree of the risks it would be incurring in lending to Mr. Cartwright on the scale required. The appropriate terms for the loan from the standpoint of both parties also need to be examined. [Show More]
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May 12, 2023
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