Clarkson Lumber Company

Clarkson Lumber Co

Discussion Questions

I hope everyone has a copy of the case. One thing you need to keep in mind is that any case can be analyzed in many ways. For the purposes of this course, I will give you certain questions that one should think about. I will post a list of questions for all the cases in the course content before our class begins officially.

Clarkson has been expanding rapidly for several years. Part of the available funds have also been used to buy out the partner. Mr. Clarkson must decide whether to continue to expand, and if so, how to raise the necessary funds.

The main questions that you need to discuss are:

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

2. How has Mr. Clarkson met the financing needs in the past?

3. How much will Mr. Clarkson need to finance the expected expansion in slaes to $5.5 million in 1996 and to take all trade discounts?

4. What would you do as an advisor to Mr. Clarkson? What would you do as a banker who needs to approve the loans?

As for participation you can provide inputs to any of the questions with some reasoning. Once the session starts, I will provide hints and methods on how to start thinking about the case.

If you decide to post a solution or reaction paper to the case you should make your submission in the Assignments Folder under Case1 by Monday night following the start of the session. Please do not use more than four pages.

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