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Clarkson Lumber Company Essay

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Below is an essay on "Clarkson Lumber Company" from Anti Essays, your source for research papers, essays, and term paper examples.

Case Summary
The Clarkson Lumber Company had been founded in 1981 as a partnership by Mr. Clarkson and Henry Holtz. Mr. Clarkson then bought out Mr. Henry Holtz in 1994. The business was located in a growing suburb and owned its own land with four large storage buildings. The company’s operations were limited to the retailed distribution of lumber products in local area including plywood moldings and door products.
Sales volume had been built up largely on the basis of successful price competition made through control of operating expenses and quantity purchase of materials at substantial discounts. Most of the moldings and door products, which constitutes significant items of sales, were used for repair works. Quantity discounts and credit terms of net 30 days on open account were usually offered to customers. Clarkson Lumber sales growth are expected to continue over the foreseeable future and future sales are protected to some degree from fluctuations in new housing construction industry because of the fact that high proportion of the company market is directed to repair business.  
Mr. Clarkson was an energetic and hard working man, has personal control over every feature of his business and he possesses sound judgment about his business issues. Mr. Clarkson was actively looking for a new banking relationship where he can negotiate a larger loan than his recent limited loan ceiling ($400,000) offered by Suburban National Bank. He approached Northrup National Bank for a larger loan and the bank had to investigate his financial position, business historical sales and expenses, future forcastes and the owner credibility.  
Clarkson Lumber is planning to borrow an increasing amounts despite its profitability because he wants to pay off Mr. Holtz in order for himself to become the primary owner of the company.   Mr. Clarkson also needs to take a loan so he could increase the purchasing power for goods and increase the net income through acquiring supply trade...

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