Case Study for Padgett Paper Products Company- analysis for the options

Options:-Portion of debt through insurance company-Continue at 90 twenty-four hours terms-Factor receivables-Collateralize assets-Mortgage public purpose building-Independent Canadian Financing-Flat dividends-Payment Terms - accelerate receipt-LIFO / FIFOEvery available filling has a positive and a negative aspect to it. here(predicate) we result decipher what option gives Padgett melodic theme Products the outdo monetary structure, provides the most flexibility for delayd growth, and reduces the risk for all parties involved. It is prefer by Padgett idea Product?s management to continue at 90 day terms, save this may non be the best choice for the company or for Caslon. in that location is a chance that the company may be audited subsequently the 1997 fiscal year and C overlyn would prefer that new terms would be worked out and shown on the financial reports in a much than favorable outcome for Padgett. A nonher problem with the 90 day terms is that there ar e no covenants or confirming set in place because Padgett?s management did non want to lose direct control over the company. They also felt that the fact that the notes can be called in 90 days was appealing to the note holders as protection; thus far this could be a huge disadvantage to Padgett if too more people called their loans at one time. By factoring their receivables Padgett Paper Products could increase their cash flow in a scant(p) come in of time.

A factoring whole would give Padgett a percent of their sales right away and the factoring firm would puzzle to wait the payment term to get their money and call for it as well. (The Smart! Choice) By letting somebody else carry on with collecting their receivables Padgett could decrease the amount they were paying employees in the collections department, if not remove this department completely. Padgett has a higher modal(a) collection uttermost versus that of the industry. Meaning, since... If you want to get a replete essay, order it on our website: BestEssayCheap.com

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