Ask Question, Ask an Expert

+1-415-315-9853

info@mywordsolution.com

Ask Basic Finance Expert

This case involves the evaluation of Kitty (Hawk Food), Inc., a restaurant food wholesaler in eastern North Carolina. The firm is experiencing difficulty paying trade debt and collecting trade receivables on time, which is causing cashflow difficulties and threatening the creditworthiness of the firm. The case should require 1 to 1 1/2 hours of outside preparation by students, and can be effectively discussed in a one-hour class. It is appropriate for managerial finance courses at the undergraduate level, and perhaps at the lower MBA level as a minor exercise.

KHF Corporation is experiencing a threat to its creditworthiness due to difficulties in paying trade payables. Its colorful CEO, responsible for collections of receivables, is not providing for collections very well. He is much more of a good ole' boy marketing type. The firm is not performing very well, and faces large seasonal swings in business. The student is tasked with solving the dilemmas posed by the case.

1. Look at a map of Eastern North Carolina. Which of the towns served by KHF are resort areas? What proportion of KHF's business is resort business?
2. What are the characteristics of resort business in comparison to year-round business? Assuming these areas open for business around March 15th, and close around October 15th, would you say that KHF's overall business is seasonal?
3. Survey the financial condition and performance indicated by KHF's financial statements, and summarize your findings. Does anything stand out?
4. KHF is basically a merchandising firm, buying inventory, marking it up, and then selling it. Is KHF's dependence on trade accounts (both receivables and payables) surprising for a merchandising firm?
5. Develop a plan for solving KHF's problem.

 

Basic Finance, Finance

  • Category:- Basic Finance
  • Reference No.:- M926036

Have any Question? 


Related Questions in Basic Finance

1 why do level or constant monthly mortgage payments

1. Why do level or constant monthly mortgage payments increase so sharply during periods of inflation? What does the tilt effect have to do with this? 2. As inflation increases, the impact of the tilt effect is said to b ...

Define a currency option related terms and pricing

Define a currency option, related terms, and pricing factors.

Ai enterprises is a computer corporation and its present

AI Enterprises is a computer corporation and its present sources of funds are $20,000,000 in equity capital and $8,000,000 in preferred stock. The company wants to fund some of its future projects (estimated cost: $12,00 ...

Katherine wishes to endow a professorship in honor of her

Katherine wishes to endow a professorship in honor of her beloved mycology professor. The University's development office has prepared a proposal for her review, to wit, "The Agnew Chair in Fungus Studies," which will co ...

In practice how could you measure that much stretch in a

In practice, how could you measure that much stretch in a bolt of this size? The bolt of problem 1 is put in service and its temperature rises to 2508F. How much change in length of the bolt would you expect this increas ...

Required for each of the following numbered items you are

Required For each of the following numbered items, you are to select the lettered item(s) that indicate(s) its effect(s) on the corporation's statements. If more than one effect is applicable to a particular item, be sur ...

In a study participants were asked to plunge a hand into

In a study, participants were asked to plunge a hand into icy water and keep it there as long as the pain would allow. In one condition, the participants repeated their favorite curse words while their hands were in the ...

Briefly describe each of the following funds transfer

Briefly describe each of the following funds transfer mechanisms: a. Depository transfer check (DTC) b. Automated clearinghouse (ACH) debit transfer c. Wire transfer Why are wire transfers typically used only for high-do ...

A congresswoman introduces a bill to outlaw credit

A Congresswoman introduces a bill to outlaw credit rationing by banks. The bill would require that every applicant be granted a loan, no matter how high the risk that the applicant would not pay back the loan. She defend ...

Define each of the followinga call optionb put optionc

Define each of the following: a. Call option b. Put option c. Strike price d. Expiration date 2. How do the rights and obligations of options buyers and sellers differ from the rights and obligations of futures buyers an ...

  • 4,153,160 Questions Asked
  • 13,132 Experts
  • 2,558,936 Questions Answered

Ask Experts for help!!

Looking for Assignment Help?

Start excelling in your Courses, Get help with Assignment

Write us your full requirement for evaluation and you will receive response within 20 minutes turnaround time.

Ask Now Help with Problems, Get a Best Answer

Section onea in an atwood machine suppose two objects of

SECTION ONE (a) In an Atwood Machine, suppose two objects of unequal mass are hung vertically over a frictionless

Part 1you work in hr for a company that operates a factory

Part 1: You work in HR for a company that operates a factory manufacturing fiberglass. There are several hundred empl

Details on advanced accounting paperthis paper is intended

DETAILS ON ADVANCED ACCOUNTING PAPER This paper is intended for students to apply the theoretical knowledge around ac

Create a provider database and related reports and queries

Create a provider database and related reports and queries to capture contact information for potential PC component pro

Describe what you learned about the impact of economic

Describe what you learned about the impact of economic, social, and demographic trends affecting the US labor environmen