Garden State Container Corporation pp-1

Garden State Container Corporation pp-1 - GARDEN STATE...

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 5/11/09 Click to edit Master subtitle style Garden State Container  Corporation Financial Analysis and Forecasting Group 2 Mike Argyrou, Rob Curl, Dan Mills, Patrick Bross,  David Lloyd
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 5/11/09 Introduction Manufactures boxes and other containers for farm  products More than 85% of sales from PA, NJ, NY, and MD Fell into financial turmoil in 1992, with the worst  ratios ( current, quick, and debt ) Creditors could legally call all the loans to Garden  State and if not repaid within 10 days, force the  company into bankruptcy
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 5/11/09 Introduction Martha Menendez ,Vice President of Atlantic First  National Bank, alerted of negative reports for  Garden State Container Corporation. Bank required Altman z-score of 3.20 Current Ratio required by bank, 2.0x Quick Ratio required by bank, 1.0x Debt Ratio’s required by bank, 55%
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 5/11/09 Introduction cont’d Jim Jackson, founder and president of Garden State  Container Corporation. Signed contract for plant expansion, requiring  $12,750,000 of capital. Cannot cancel contract due to high cancellation fees  with bank and construction companies. Met with senior management team to discuss how to  get the company afloat and remain there.
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 5/11/09 Introduction cont’d Recession plagued U.S. economy in early 1990s. Severe droughts simultaneously occurred for two  straight summers. Garden State reduced prices in ‘91-’92 to stimulate  sales. Unfortunately, inventories increased sharply. GSCC relaxed its credit standards, in an attempt to  reduce inventory.
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 5/11/09 Introduction cont’d After meeting with senior management, they  concluded GSCC’s sales would grow by 10% from  ‘92 to ’93, then 15% from ’93 to ’94.
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This note was uploaded on 05/02/2009 for the course FINC 312 taught by Professor Varma during the Spring '08 term at University of Delaware.

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Garden State Container Corporation pp-1 - GARDEN STATE...

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