StudentShare
Contact Us
Sign In / Sign Up for FREE
Search
Go to advanced search...

Analyse case study financially - Essay Example

Cite this document
Summary
The main issue to be resolved in the case of the Crowne Inn is to identify the fair transaction to be accepted for the bar to be sold to Bruce Johnston by his mother Barbara Johnston. It is evident that there are three options for Barbara: 1) have Bruce pay a lump sum, 2) have…
Download full paper File format: .doc, available for editing
GRAB THE BEST PAPER98.8% of users find it useful
Analyse case study financially
Read Text Preview

Extract of sample "Analyse case study financially"

Download file to see previous pages

However he purchased the stock from his partner and became the sole owner. In 1994, when Harvey retired, it was agreed that his wife, Barbara will own the business and after her, it would go to Bruce. However, Bruce will be running the business and getting its proceeds and in turn will look after Barbara’s medical expenses, pay for mortgage ($23,500) and pay her $500 every month. Due to the recent issues raised by Barbara that Bruce had not been paying her properly, Bruce has come up with a contract.

The contract indicates that he will make a down payment of $50,000 and then $500 thereafter for the remainder of Barbara’s life. Barbara and family are confused, whether this was a fair offer or not. In order to identify a fair offer, it is essential to understand the reasons behind Bruce pushing this contract to be signed at the earliest. It is clear that the return on total assets has doubled in one year, indicating that the assets are effectively generating profits for the bar. The return on equity has also doubled, indicating that the payoff on equity is higher (Drury, 2005).

This can be main reason behind Bruce wanting to own all of the Crowne Inn, as he will be the sole owner of the company and can claim the entire profits. It is evident from the above ratios that the Crowne Inn has actively reduced the debt level over the past few years and the debts contribute to lesser than 50% of the assets. The total equity in the company has also risen in the last three years. Based on these ratios, the total debt can be cleared within a period of another 3 years and the whole company will be owned by the equity shareholders.

Hence Bruce is very particular about buying the whole company, as he and Sharon only will have the claim to the business’ proceeds (Pendlebury and Groves, 2003). Barbara gives importance to her relationship with her son; however she is also particular about the oral agreement that Bruce has to take care of her. It is

...Download file to see next pages Read More
Cite this document
  • APA
  • MLA
  • CHICAGO
(“Analyse case study financially Essay Example | Topics and Well Written Essays - 750 words”, n.d.)
Retrieved from https://studentshare.org/miscellaneous/1552210-analyse-case-study-financially
(Analyse Case Study Financially Essay Example | Topics and Well Written Essays - 750 Words)
https://studentshare.org/miscellaneous/1552210-analyse-case-study-financially.
“Analyse Case Study Financially Essay Example | Topics and Well Written Essays - 750 Words”, n.d. https://studentshare.org/miscellaneous/1552210-analyse-case-study-financially.
  • Cited: 0 times

CHECK THESE SAMPLES OF Analyse case study financially

Shell Oil Reserves Controversy

Running Head: MANAGEMENT 1 Management Name Professor Course Date case study on Royal Dutch/Shell Oil Reserves Controversy Introduction Reports show that royal Dutch/shell has been mixed up in inflating its oil assets.... hellip; The study provides comprehensive insights into the part played by the high rank management at the company leading to controversy of oil reserves.... Analysts reported that the law firm, Berger, was only one among the many law firms who were launching case....
4 Pages (1000 words) Case Study

Financial Performance of EMI Group PLC

rofit and Loss AccountProfit and loss account of the company provides a record of all revenues and expenditures and totals the profit or loss over a given period of time (in our case the financial year ending March 31, 2005).... This report is devoted to the analysis of the financial performance of EMI Group PLC in the financial year ending March 31, 2005....
15 Pages (3750 words) Case Study

Turnerwood Plc Strategic Management

However if demand is not as expected, the sale would be slow and in this case forecasting technique of what customers actually want in terms of value would be important in production, marketing and management (Walters, 1997).... However, the company balance sheet and profit and loss accounts should be taken into consideration to analyse whether Turnerwood Plc is in a sound financial position....
10 Pages (2500 words) Case Study

Financial Decision Making and Risk Analysis

This is a two-option financial investment appraisal case which compares the cost of operating an existing sub-assembly line with the cost of a new automated assembly cell.... We utilised common investment criteria to analyse this project and considered other factors that may affect its financial viability....
9 Pages (2250 words) Case Study

Feasibility Report for SkiZone

These solutions are also financially analysed using investment appraisal methods and the cost benefits are identified.... will prove to be most effective here in the case of SkiZone.... The paper "Feasibility Report for SkiZone" states that using QuickBooks Enterprise Systems 10....
16 Pages (4000 words) Case Study

CASE STUDY - Financial Statement Analysis

The above figures shows unstable growth rate of the company, from 50% growth in 2010 to a forecasted growth of 39.... 1% in 2011.... et income growth gives a good picture on how a company's profits increases. Chem-Med's current ratio for 2010 is 2.... times while that of Pharmacia… This shows that Chem-Med will be able to pay its current liabilities using its current assets and as such would not resort to additional external financing....
2 Pages (500 words) Case Study

Are the German Banks Riskier than the European Competitors

The study "Are the German Banks Riskier than the European Competitors?... highlights there is a greater extent of fluctuations in the liquidity ratio of the German banks rather than in their non-German European peers.... It has been rooted by a considerable change in the German economy in 1994-2008 that affected the German financial and banking sector....
7 Pages (1750 words) Case Study

Sources of Finance and Financial Planning

The case study "Sources of Finance and Financial Planning" points out that companies are exposed to financial sources for expanding business by means of scheme funds, bank borrowing, loan stocks, issuing new shares or the right shares in the capital market, government sources.... In this case, the buyer has the possession of the assets but not the ownership during the period of repayment....
10 Pages (2500 words) Case Study
sponsored ads
We use cookies to create the best experience for you. Keep on browsing if you are OK with that, or find out how to manage cookies.
Contact Us