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Hampton Machine Tool Company Analysis

In: Business and Management

Submitted By jkramer112
Words 758
Pages 4
Student ID#: 285
Firm: Hampton Machine Tool Company
Nature of business: Machine Tool Manufacturing
Overview
Hampton Machine Tool Company was founded in 1915 and experienced record production and profitability throughout the years despite hard economic times for the machine manufacturing business. Sales declined throughout the mid 1970’s from the post Vietnam War demand, the declining automobile industry in St. Louis, and the gas embargo of the early 1970’s. Hampton did eventually recover due to an increase in military sales, the automobile industry rising, an overall improvement in the economy. Hampton is looking to take out a line of credit of $1,000,000 and an additional loan of $350,000 to purchase equipment, and an extend payment an additional three months to December 1979. Suppliers have hampered Hampton’s sales with late deliveries of machine parts. Because of this, Hampton is unable to pay its loan on time, which is due in September.
Marketing
Hampton Machine has bolstered its sales but is, unfortunately, not able to keep up with demand. This can be attributed once again to supply chain problems. The company currently has unfilled orders of $16,500,000 as of August 31. This accounts for 90% of its forecasted sales and the company is in desperate need to fill these orders by December so as to avoid disappointing its customers or sending a signal to the market that the company has severe management problems.
Operations
This company could possibly have severe operating issues in the near future. Hampton seems to have difficulty with its suppliers as mentioned before. Sales are being made, but there is a large disconnect with filling these orders. The company’s seasonal sales make its inventory levels fluctuate dramatically from March to August. This excess in inventory makes it difficult for the company to repay its loans and convert

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