OK gang.

I made some changes to Jeff's memo.  See what you think.

Basically, my belief is that Clarkson will be able to make payments, but
the loan is not enough.  He will use it all up immediately and that the
cash will not be there in the near future to repay the principle.  I also
feel that his real problem is in AR and inventory turnover.

Mark:  Let me know if there is a problem putting it all together with the
spreadsheets.  I can help out.


Dylan


At 11:26 AM 1/28/01 -0600, Jeff.Dasovich@enron.com wrote:

>OK.  Jimmie and I duplicated effort just a bit.  Attached is the memo and
>the spreadsheet.  Note that in the memo, we have a dispute about whether
>$750k is adequate.  Therefore, I've left questions 4 and 5 attached to the
>memo for you folks to reconcile (if they take advantage of discounts and
>get A/R and inventory rates back in line with '93 rates, is $750 enough?).
>
>Also, I've included a common-size income statement in exhibit 1, a cash
>flow statement in exhibit 2, and I, too, completed exhibit 3.  We may want
>to clean up some of the calculations in the spreadsheet, given that we'll
>likely need to turn them in as attachments.
>
>Hope this helps.  I'd do more, but I'm off for the airport and New
>York--won't be in class tomorrow.
>
>Best,
>Jeff
>(See attached file: Clarkson--Dasovich.xlw)(See attached file: Clarkson
>Case Memo 0127.doc)
>
>
>
 >
                     JcjCal02@aol.

                     com                  To:     Jeff.Dasovich@enron.com,

                                          dwindham@uclink4.berkeley.edu

                     01/28/2001           cc:
guinney@haas.berkeley.edu,
>                     01:01 AM             JcjCal02@aol.com,
> jdasovic@enron.com,
>                                          jjackson@haas.berkeley.edu
 >
                                          Subject:     Re:
Clarkson
>
 >

>
>
>
>To simplify the analysis, I completed Exhibit 3 for 1993, 94, 95 for
>clarkson
>in the attached spreadsheet.  Whoever calculated ROA forgot to add interest
>expense and used year end assets instead of average.  For ROCE again,
>average
>instead of ending should be used.  The level of current liabilities jumps
>out
>when you compare it to the rest of the industry.  Dylan is right the growth
>in inventory is also alarming.  I will look at the data some more tomorrow.
>Jimmy
>
>(See attached file: CLARKS~1.XLS)
>
>
>

 - Clarkson Case Memo 0128.doc