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Thomas Money Service Business Proposal

In: Business and Management

Submitted By mcmart01
Words 2036
Pages 9
Revised Business Proposal
ECO/561
February 13, 2012

Revised Business Proposal
Background
Thomas Money Service Inc. began its operations in 1940 as a consumer finance company granting small loans for household needs. By 1945 TMS had expanded its services to include business loans, business acquisition financing, and commercial real estate loans. The following year, the company branched out into equipment financing through a subsidiary named Future Growth Inc. (FGI). The company’s decision was made at just the right time. The end of World War II brought about an increasing demand for construction and forestry equipment and paved the way for the company to purchase an equipment manufacturing company in 1951. The manufacturing company allowed FGI to build, sell, and finance their own brand of building and forestry equipment. At the same time, FGI made the decision to discontinue financing other brands of equipment.
The company continuously increased profits year after year for 67 years. Even economic downturns did not slow them down and FGI continued operations without laying off a single worker. The value of the company’s stock grew to $85.60 from $5.00 and experienced six stock splits from 1975 to 1998. The present stock value is $35.
A recent global downturn in the economy has affected the industry. Several forestry states including Oregon and Washington have encountered flooding, massive fires, and protests from animal activists. The effect of these disasters affected FGI by lowering profits 30% from the previous year. This resulted in a substantial reduction of the company’s workforce; 33% of FGI’s employees were laid off.
The economic downturn has also resulted in a drop in new-home sales. Current sales are down 30% from last year and additional declines are expected. The decreasing sales have trickled down throughout the entire construction industry.

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