Randall Industries
... firms orders. Randall’s technical expertise is amazing, but he does not have good business insight. The company has somehow managed to stay in the black most years and there has never been a shortage of orders. However, RI is in a financial dilemma. The credit line of $200,000 from the Bank of Ohio will not be renewed and the note must be paid off in three months. An extension will not be possible. Another problem is the situation with the suppliers. RI may not be able acquire the materials and parts to fill next month’s orders. The total of accounts payable is around $600,000 with 75% overdue more than 100 days. The suppliers are getting very impatient and stated that “enough is enough.” The three brothers decided to discuss the firm’s financial situation without their father. The family does not have enough equity to assist in this crisis and they must figure out where to go from here. Robert suggests that they appeal to a smaller bank since they may have more discretion in approving a loan. He believes that a bank that is more familiar with the firm would be more willing to listen to them. They know any bank will have to feel that the loan can be paid off and it is secure. Thomas was appointed to examine the firm’s costs and find where expenses could be reduced. Marvin consented to speak with all the firm’s suppliers and work out a reasonable payment plan. Robert went to two locally owned banks to find out if they would be amenable to a “sales pitch.” At the next meeting, Robert advised the other brothers that because of the firm’s outstanding reputation, the bank’s would listen. Thomas found many unnecessary expenses that could be eliminated. It would take approximately four to six months for the changes to be fully consummated. Marvin was successful with the suppliers. They agreed to work with them as much as they could. However, some suppliers demanded payment in full. Perhaps the greatest problem of all is Rand...