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O.M Scott & Sons Case

In: Business and Management

Submitted By wevorancherito
Words 1551
Pages 7
A Case Study on
O.M Scott & Sons Co.

Table of Contents
Objective……………………………………………………….…………1
Company Background……………………………………………………1
Ratio Analysis…………………………………………………………….1
Pro Forma Analysis……………………………………………………….3
Sensitivity Analysis……………………………………………………….3
Recommendations for Management………………………………………4
Summary of Case Study…………………………………………………..4
Appendix………………………………………………………………….5

Objective
This paper will seek to analyze the financial statements of the O.M Scott & Sons Company during the years 1957-1961, in order to provide readers with a thorough understanding of the various factors that may influence the future success of this business. Additionally, recommendations based on an analysis of their financial statements will be offered for the management of O.M Scott & Sons to implement in the following years.
Company Background
Headquartered in Ohio, the O.M Scott & Sons Company has operated in the lawn care industry since 1868 and has grown into a successful business with a positive outlook. In fact, management within the company set an ambitious goal of increasing annual growth rate in sales and profits to 25% in the year 1959. According to management, one of the main factors limiting O.M Scott & Sons companies’ growth was the inability for their dealers to carry a sufficient amount of stock for customers. However, company officials feel that their use of a trust receipt program and other decisions will benefit the company’s current financial standing.
Ratio Analysis
An evaluation of the profitability, turnover control, and leverage/liquidity ratios sheds light on several strengths and weaknesses maintained by the O.M Scott & Sons Company. In regards to the profitability ratios, return on equity is shown increasing between the years 1957-1960 reaching a peak of 20%. A low ROE in 1961 of 13% indicates that the...

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