Executive Summary
Statement of the Problem
September 14, 1979, Hampton Tools is going to default on their loan within two (2) weeks. A combination of problems has led Hampton to this position. Hampton took out their initial loan of $1 million for the purpose of purchasing the stock of a group of dissident shareholders. This loan was to be paid back at 1.5% per month and is due at the end of September 1979. This loan was based largely upon forecast sales that Hampton had given to the bank. Over the period from January through August 1979 Hampton sold completed only 73% of their projected sales.
This failure to meet forecast production levels can be attributed to three major factors. First, a major component supplier failed to deliver their part on time. This caused Hampton to have seven (7) machines worth $1.32 million completed except for the production of these parts. Second, the company bought $420,000 worth of components over its normal levels of inventory. Hampton expects to......
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Approximate Word Count: 602
Approximate Pages: 3 (260 words per double-spaced page) |