Hanson Ski Products Case Solution

Case Solution

Within the finish in the budget cycle, the manager must test whether plans are achievable given financing plans and constraints. Cash needs are excellent due to seasonality. Needed financial financial loans ought to be calculated at five separate dates, and budget forecast-ed. This is often a rewritten type of Hanson Industries (B) and (C).

Excel Calculations

Hanson Ski Products - Yearly Balance Sheets

Yearly and Projected

Questions Covered

Using the information in the balance sheet for March 31, 1986 (Exhibit 2), and the   fiscal year 1987 budgets (Exhibits 3 and 4), prepare a projected balance sheet for Hanson Ski Products for March 31, 1987. (To do this, you will need to estimate   the size of the commercial bank loan—“Notes-bank”—on that date.) Does your   balance sheet tell you whether or not the plans on which the budgets are based are feasible?

Project the size of the commercial bank loan at the end of each quarter of FY 1987. Can Hanson stay within the commercial banks’ line of credit of $4.2 million? Will the company have sufficient collateral?

Prepare quarterly balance sheets for Hanson Ski Products for June 30, 1986;   September 30, 1986; and December 31, 1986. What do the four balance sheets you   have prepared tell you about the financial structure and strength of Hanson Ski   Products?

Denny Hanson was particularly concerned that the stockholder loans be paid off in November1986 when they were due, and he asked Dave Snyder, treasurer, to prepare a cash budget by months for the third quarter of FY 1987 (Exhibit 5). Do you see any problems in paying off the loans on time?What could Hanson do to be sure the loans can be paid