Hampton Machine Tools

In: Business and Management

Submitted By tseveendorj
Words 546
Pages 3
Cases in Finance
September 26, 2012
Dr. Thomas McCue
Case 1: Hampton Machine Tools
Evan Cvejkus

Hampton Machine Tools is a company that specializes in the production and manufacturing of machine tools. The company has been in existence since 1915 and weathered all economic and internal struggles where most of their competitors met defeat. In order to purchase new equipment, Hampton requires a new loan of $350,000 and also wants to renew their current loan of $1,000,000 that will soon expire. In this case, we must decide whether or not the bank should give Hampton what it needs to succeed.
The bank should renew the loan to Hampton Machine Tools as well as giving them the new loan for equipment purchase. The reason for lag in loan payments is due to the fact that Hampton had purchased a larger amount of raw materials than normal in July and August. Also, there was a small halt in production when the company was awaiting a component for one of the electronic control mechanisms. As stated in the case, they had seven machines totaling $1,320,000 completed with the exception of the control mechanism. This was a onetime hiccup by the supplier and Hampton suffered because of it.
Hampton is a very transparent company. They offer up any and all financial statements that they have without even being asked. Benjamin Cowins, who is the president of Hampton, is an honest and trusted man. He is known throughout the community for his upstanding character and honesty within the business world. He is a very capable, energetic, and intelligent leader and has managed to keep Hampton strong during his tenure with the company.
Another reason to give Hampton the loan is because of their outstanding history. Hampton has been in existence since 1915 and survived through all the hardships the similar businesses had faced. During the most recent cycle, Hampton had record-breaking…...

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