dynashears

dynashears - Kevin Raesly Team Number 3 Dynashears March...

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Kevin Raesly Team Number 3 Dynashears March 12, 2008 Problem The problem, in this situation, does not deal with Dynashears as much, but rather with Mr. Winthrop, of Wellington National Bank of New York City. Mr. Winthrop must decide what the bank wants to do with the loan they are giving to the company. Alternative One The first alternative for Mr. Winthrop is to flat out extend and increase the loan. This alternative entails Mr. Winthrop going through the income statements and balance sheets that Mr. Sheehan, treasurer of Dynashears, submitted for the meeting and deciding that the company was in a good position to increase their profit and pay back the loan in the future. Dynashears’ sales have decreased from $2624 thousands of dollars per month in 1990 to $1447 thousands of dollars per month in 1991. This decrease can immediately be attributed to the recession the economy is in and is not a reflection on the company’s operations. In addition to this drop in sales, profit and retained earnings had gone into negative values by March of 1991. By extending and increasing the loan, Mr. Winthrop shows confidence in company to turn everything around. The increase in loans is mainly due to the fact that Dynashears is in the process of a plant modernization program, which is ultimately make the company more efficient and help them accommodate to the economic change that is occurring. Dynashears loan history is also important in considering what to do with the loan. The company has a great history with paying back loans and has always done it by December 31 st of the fiscal year. This is a fact that should give Mr. Winthrop assurance that Dynashears is good for the money. One ratio to
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This note was uploaded on 09/24/2008 for the course AEM 2220 taught by Professor Perez,p.d. during the Spring '06 term at Cornell.

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dynashears - Kevin Raesly Team Number 3 Dynashears March...

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