Creditors Case Studies Samples For Students

Reducing Debts at Credit Solutions of America

Credit Solutions America (CSA) is a company that is headquartered in Richardson, Texas but has many branches in many other states. The company has several customers who are enrolled in debt reduction programs. The company helps those customers who do not want to file for bankruptcy, but they would wish to settle their debts. Despite its years of success, the company was sued in eight states after it was found to be engaging in fraudulent activities. Although the methods employed by the company in their debt reduction program puts the customers in a stressful situation, they are left satisfied ...

Business

Business

Response to Questions

Employees are those people who may be given a job either on a part time or full time basis under an employment contract that can either be written or oral. When talking of an independent contractor, it could refer to professionals such as doctors, engineers and various other professionals who may be carrying out individual businesses through which they offer direct service to the public. For an agent, these are people that may be authorized to act on behalf of other businesses. Their contracts are normally in written form. For instance, a company may be making sales through someone in a different ...

Introduction

Pehr Weisengraf could not interpret the financial ratios of his business after he was presented with a document of the calculated ratios by the banker following a failure to secure a loan for his business from the bank. The ratios are calculated to predict and ascertain the performance of the business by credit issuing institutions. The comparison of the ratios from the previous and current year did not match the required industry average that could have consequently determined what amount of loan could be awarded to his business. In this regard, it is essential that Weisengraf learns what the ratios mean and ...

Answer 1

As a legal person, a company can be sued by any person if the directors had entered into a contract with the person and failed to honor the deal, therefore, resulting to financial loss to either party. However, recent case laws have shown that there are instances when directors can be held liable or personally liable for any financial loss to a creditor or any other party. An instance where a company’s director makes statements on behalf of the company that can be considered as lies or misrepresentation of the company can result to the civil suit against both the company and the ...

Clarkson Lumber is a young company that needs many sources of finance to keep running its operations. However, recently a bank has denied Clarkson Lumber a financing of $750,000. This is a big loss for the company. The company is highly geared with the leverage of $1 amount of debt for every $1 of equity invested. The current ratio of the company is also in a bad condition signifying working capital difficulties. For every $1 in current liability, the company has only $0.6 in current assets. This situation is very alarming. In future, if the creditors of the company ask Clarkson Lumber to ...

Question 1

According to the article by Joseph Johnston, he argues that stakeholders’ interests are worth in a social aspect, but they prove to be hard in imposing them. In this case, Joseph explains the objective of starting a business enterprise and compares with the social responsibilities a company is obliged to fulfill. Additionally, the social responsibilities of a company usually conflict with the main objectives of starting a business enterprise. Generally, managers are owed the responsibility of social welfare and benefit for the community at large. Therefore, a business enterprise is expected to function in favor of both shareholders’ interests and stakeholders’ interests. In practice, stakeholders ...

Question 1

The Purpose and Usefulness of the Income Statement in Assessing Business Performance
Income statement is a financial document that attempts to measure financial performance of an organization over a specified accounting period. The major purpose and usefulness of an income statement is to summarize the business revenue stream and expenses by categorizing activities into operating and non-operating accounts. Income statement is useful in business performance assessment by showing any net loss or profit earned over a specified accounting year or a quarter .
The operating section of income statement is important to assess business performance of Sportswear-Kit since it discloses information about ...

The production director of Wilmslow Ltd wants to schedule production for quarter 3 (the twelve weeks ending 17 September) and asks you to use the revised information to prepare the following:
- The revised production budget for Alphas and Betas;

Closing stock is 5 days and 10 days of sales for Q4, for alpha and beta respectively, which is 20% more than the new estimated demand, so the Q4 estimated demand is 120% of 2000 and 2400 respectively
=120/100*2000=2400
2400/12=200 units (12 weeks because each week is 5 days)..For Alpha

For beta;

=120/100*2400=2880
2880/6=480 ...

1).
Underwriter model exists where a company contracts another financial institution to offer its securities for sale to interested investors the risk associated with this is the company issuing its securities will have to pay the financial institution some commission which might end up reducing the expected amount by the issuing company and is more riskier if the two parties don’t agree on a eat stock status which might see the issuing company get back it unsold securities. The investment model is where by the issuing company decides to sell its securities directly to the investors the risk with ...

It is suggested that several parties can benefit from a conceptual framework. Do you consider that a conceptual framework is more important for some stakeholder groups than others? Explain your reasoning.
Conceptual Framework: In the words of Duska, Duska & Ragatz (2011, p.11) “The conceptual framework is a coherent system of interrelated objectives and fundamentals that is expected to lead to consistent standards and that prescribes the nature function and limits of financial accounting and reporting”. In the light of the above definition it is clear that the main areas of concerns related to financial accounting and reporting that are addressed by a ...

The establishment of a legal entity that is detached from the individual entities of the individuals for the purposes of conducting business as a group is known as incorporation.1 It is a simple and voluntary act which is ideal for small enterprises that is an alternative to forming a company that is limited by guarantee or a co-operative. With the incorporation of a company come certain advantages and responsibilities as defined by the Australian Law. The individuals who chose to form an incorporated association are not entitled to use the profits accrued in the process of conducting the business for personal gain.
There are ...

Current Challenges

JC Penney is a mid-size departmental store operator that is struggling with a myriad of challenges, among them, a tough operating environment, reduced sales and financial challenges. The retail has seen increased competition with the rise of e-commerce and companies like Amazon and E-Bay. In the last ten years, for instance, JC Penney stock has lost 86% of its value, from a high of $83.43 in March 2007 to a low of $7.70 in May 2016. In May 2016, the company announced a drop in sales in the first quarter, 2016. However, the company cut down on losses, from ...

Financial Accounting

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Computations of the 2014 liquidity ratios for Coca-Cola and PepsiCo

The computations of the 2014 liquidity ratios for Coca-Cola and PepsiCo, including the current ratio, accounts receivable turnover, average collection period, inventory turnover, days in inventory and current cash debt coverage, are provided below.

The 2014 liquidity ratios for Coca-Cola and PepsiCo

According to the above-performed analysis, PepsiCo had better liquidity ratios in 2014 comparing to Coca-Cola’s financial performance in this regard.
Thus, PepsiCo’s liquidity ratios, such as the current ratio, inventory turnover and current cash debt coverage, are significantly larger than Coca-Cola’s similar financial figures.
As a result, PepsiCo’s average collection period, as well as the ...

Grave industry is a corporation that was founded in the year 1920s to participate in the manufacturing of hardware and tooling. The corporation converted to a public company in 1926 and listed its stake in the New York stock Exchange. The company grew with its revenue rising to $41.5 million by the year 1945. By 1981, the company had expanded to the extent of separating its structure into producing and selling tools and hardware to hardware distribution chain. By 1963, the management had resolved to expand its activities into marine hardware production through acquisition of Lohnes Marine Hardware company. Under the ...

1. The name of the organisation, the industry it operates in and the issue relevant to ethics and corporate governance with which it was connected.
a. What were the conditions at the organisation that led to this example of poor corporate governance? (5 marks)
b. What were the outcomes for the board of directors, the shareholders, the staff of the organisation, its customers and the general public? (5 marks)
The processes and structures for control and direction of firms is corporate governance. It is concerned with the associations between board of directors, management, control of major ...

Introduction. 3

Question 1 3
Question 2. 8
Question 3. 9
Question 4..10
Question 5..10

Question 612

Introduction
Thunder Electronic Company is one of the players in the electronics industry. The strength of any company within the industry that it operates is determined by its financial position. The basic aim of any venture or business is to make or increase its profits. There are several financial ratios that are used in determining a company’s financial position.

Question 1

Liquidity ratios gauge a company’s ability to convert its short term assets into cash. Liquidity ratios for TEC Company are moderately poor ...

1. What is piercing the corporate veil?
This is a situation whereby an individual from a corporation is held liable for the debts of the corporation by the court. It overlooks the principle that holds the corporation solely liable according to contract or tort (Miller & Cross, 2013).
2. What are the factors that a court considers to pierce the corporate veil?
- Whether the owner came up with the corporation with the objective of his own personal gains.
- When a corporation transfers its assets to another corporation to avoid liability.
- When the owner transfers his property ...

1. Background to the Acquisition
This proposed acquisition is between two firms, Congoleum Corporation (Abridged) and Prudential Insurance Company of America where by Congoleum is the targeted company and Prudential the acquiring one. The negotiations of the acquisition shall be handled by First Boston and Century Capital Corporation whereby the former is the lead negotiator while the latter shall one of the prospective equity participants. Congoleum is a highly diversified company with three products market segment; home furnishings, ship building and automotive and industrial distribution. The firm has an asset and revenue base of $323million and $576million respectively. In ...

The estate plan is intended to reduce the amount of both federal and state tax payable on the gross estate of the clients. The estate plan seeks to develop efficient gifting plans by the clients to specific beneficiaries and effectively reduce the amount of tax that is payable from the gifting plans to the minimum. The estate plan should enable Rich distribute his estate to all his beneficiaries without any conflict of interest arising from the remarriage of his wife after his death.
The estate plan seeks to revise the client’s will to be more effective and ...

Calculate & analyze current ratios and acid test

Financial ratios are an integral part of any business, which help to quantify various aspects of company’s operations and performance. When making a decision on the loan, creditors usually consider liquidity ratios in their analysis. Such ratios help to understand whether the company is able to repay its debt by converting its short-term non-cash assets into cash. The higher liquidity ratios are, the safer it is to give loans to this company. Current ratio and acid-test ratio are among the most commonly used ratios for liquidity analysis. Current ratio can be calculated as a ratio of current assets to current ...