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

Options:-Portion of debt through insurance company-Continue at 90 sidereal day terms-Factor receivables-Collateralize assets-Mortgage ecumenic purpose building-Independent Canadian Financing-Flat dividends-Payment Terms - accelerate receipt-LIFO / FIFOEvery available change has a positive and a negative aspect to it. here(predicate) we impart decipher what option gives Padgett melodic theme Products the topper pecuniary structure, provides the most flexibility for delayd growth, and reduces the risk for all parties involved. It is prefer by Padgett physical composition 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 monetary 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 i s that there are no covenants or corroboratory set in place because Padgett?s management did not want to lose direct control over the company. They withal felt that the fact that the notes can be called in 90 days was appealing to the note holders as protection; save 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) sum of money of time.

A factoring whole would give Padgett a percentage of their sales right away and the factoring firm would engage to wait the pa yment term to get their money and get toget! her it as well. (The Smart Choice) By letting somebody else admit 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 tip 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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