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Case Assignment 1 FIN

Case Assignment 1 FIN - Angel Pagan FIN 202:001 Prof Zheng...

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Angel Pagan FIN 202:001 Prof. Zheng 2/13/14 Case Assignment #1: Harrod’s Sporting Goods Intro This case is about Jim and Becky Harrod, owners of Harrod’s Sporting Goods. Harrod’s first opened in Omaha, Nebraska in 1992. By the year 2006, there were twelve Harrods stores producing $5 million in total sales and generating a profit of over $200,000 a year. In January 2007, Becky and Jim decided that they had it with the First National Bank of Omaha. The Harrods were trying to renew their loan and line of credit but the bank was trying to charge them 2.5 percent over the prime rate. This led to the Harrods asking the bank to review the financial statements in order to reconsider the premium they want to pay. Case Questions 2. All three ratios are experiencing similar trends. They all increased from 2004 to 2005, but then decrease from 2005 to 2006. The increase of profit margin indicates that Harrods was generating more net income per dollar of its sales until its profit margins dropped in 2006. The increase in return on assets from 2004 to 2005 indicated that Harrod’s was
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