Compass Record

CORPORATE FINANCE

QUESTIONS FOR CASES

(a) Questions are provided to guide students understand and analyze the case.

(b) Students are not limited to answering the questions listed below.

(c) Each presenting student can discuss one or more issues related to the case.

(d) All students have to participate and speak.

(e) Extra credit will be given for well-presented a.

SIA 2014: Assessing Future Financial Health (All to Prepare for Class Discussions)

Q1. Review the Harvard Framework to assess a company’s future financial health.

Comment on the key elements? What are the elements difficult to evaluate?

Q2. Using past year data, what is the approximate sustainable growth of SIA? Is it in line with economic, industry and corporate reality?

Q3. Examine the product-market strategy of SIA? Is this strategy relevant and sustainable?

Q4. How did SIA support its product-market strategy? What investments, financing and operational requirements are needed?

Q5. Is SIA financially healthy in 2014?

Clarkson Lumber (All to Prepare for Class Discussions)

Q1. Why has Clarkson Lumber borrowed increasing amounts despite its consistent profitability?

Q2. How has Clarkson met the financing needs of the company during the period 1993 through 1995?

Q3. Do you agree with the estimates of Mr Clarkson regarding the loan requirements? How much will he need to finance the expected expansion in sales to $5.5 million in 1996 and to take all trade discounts?

Q4. How attractive is it to take the trade discounts?

Q5. As Mr Clarkson’s financial adviser, would you urge him to go ahead with his anticipated expansion and his plans for additional debt financing?

Case 1: Jackson Automotive (For Presentation)

Q1. Why is a profitable company like Jackson unable to repay its loan? Why does the company need an additional loan?

Q2. Will Jackson be able to repay am even larger...