What other options does Mr. Monthly interest of 1. If the loan is undertaken Hampton would hold a negative hard currency balance at the terminal of the twelvemonth. Record breaking profits in Eckwood have, and what are their pros and cons?
What developments could change your consequences? What is the impact of this redemption on Hamptons fiscal public presentation? Based on the information in the instance. The statement shows that there will be a negative hard currency balance at the terminal of December.
What action should Mr. The fiscal statements show that Hampton will default on the loans. The loan was to be repaid by September of with monthly involvement payments at 1.
Eckwood should ask for a Security against Loan being sanctioned or it may increase interest amount. Principal has to be paid at the end of Dec If he decides to let the loan the bank will be at hazard at non being repaid.
So Hampton should non pay the dividend payment in December. What are the major risks associated with the proposed loan? What would you make? This could be due to the slow production in the months of October and November every bit good as the consequence of histories receivables non being collected until the following month.
Debtors have been paying their amount within stipulated period of 30days and no bad debts do occur. Calculation in excel sheet Question 3: Hampton wanted to pay off shares held by dissident shareholders who were trying to pull Hampton from its growth. Based on the prognosiss we assume that Hampton will run at a full capacity.
Do you agree with Mr. Make the hard currency budgets and the pro forma fiscal statements yield the same consequences? Eckwood take on Mr.
What major developments between November and August contributed to this situation? Eckwood take on Mr. Cowins proposal to pay significant dividend in December?
Why did Hampton buy back a significant fraction of its outstanding common stock? It may go for an option of making part payment during Oct 79 when it has cash in hand.
Question 2 Based on the information in the case, prepare a projected cash budget for the four months September through Decembera projected income statement for the same period, and a pro forma balance sheet as of December 31, We do not agree with Mr Cowins decision to pay substantial dividend in December, since dissident shareholders have already been paid off their Capital and payment of Dividend can be differed till next year.
Overall Hampton should concentrate on paying off the current loan before adding new debt onto it. Question 3 Review the results of your forecast. By making this Hampton reduced the figure of portions outstanding and increased the net worth of the company added to the excess doing Hampton look more profitable.
Cowins correct in his belief that Hampton can repay the loan in December? With these findings we are confident that if the loan would non be able to be repaid in December but with the extension the loan could be repaid the following one-fourth.Using this information we have prepared Hampton Machine Tool Company’s fiscal statements including a jutting hard currency budget.
pro forma income statement. and pro forma balance sheet. Hampton Machine Works Solutions. Hampton Machine Tool Company. and a pro forma balance sheet as of December 31, (Your income statement need not be monthly. You can make one covering the entire four months.) Pro Forma Income Statement September – December Sales Cost of sales Other expenses Profit before tax 5/5(2).
Hampton Machine Tool Co. MENU. and increase a loan to a small machine tool company. Case provides sufficient data for preparation of cash budgets and pro forma financial statements in order to. Hampton Machine Tool Co - Free download as Word Doc .doc), PDF File .pdf), Text File .txt) or read online for free.5/5(7).
View Homework Help - Hampton Machine Tools Pro Forma Statements from FINA at Northeastern University. $ Proposed Dec. Dividend Addition to retained earnings $ Equals -$ WIP88%(8).
Case #1: Hampton Machine Tool (2/3 students) Cash budget, pro-forma balance sheet and income statement – see Instructions Forecasting financial requirements.Download