| Jefferson Furniture || |
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BUDGETS!!!
examines pricing, buying, unit sales, fixed costs, inventory and accounts receivable to create a realistic profit target and an action program to hit it.
Purchasing
You are responsible for controlling the raw materials stock levels. The maintenance of adequate stocks of quality lumber is a particular concern. You are interested in JIT and like the ideas, although you don't know how to go about introducing them. You are not sure how relevant JIT is to your timber stocks; timber requires conditioning before it can be processed. But, you feel that a JIT system might be more appropriate for JJFC than some computerized solution.
Currently JJFC uses a reorder point system for raw materials. This is certainly possible with the manufactured items such as hardware and chipboard. As far as possible, you negotiate bulk discounts through competitive tendering. This can lead to substantial cuts in purchase prices, but it does mean that you have to carry very large stocks of certain items. However, JJFC's manufacturing suppliers will only deliver in certain minimum batches by weight or cubic area.
The purchase of solid lumber is particularly problematical. You know a lot about timber, especially in choosing high quality stock. Here it is rare for large purchases to be made. The selection necessary means that unpredictable and varying amounts will be purchased as and when timber stock of the appropriate quality and type becomes available. Moreover, because of the natural characteristics of wood, timber stocks have to be held under controlled conditions sufficiently long for the material to stabilize. In some cases the company takes an option on wood still standing. In these cases, of course, the final yield is difficult to estimate.
There are also occasional opportunities to purchase excellent specimen timber stocks in small quantities, for instance following gales or storms which inevitably bring some trees crashing to the ground unexpectedly. You are always on the lookout for such opportunities. In such cases, you keep close contact with the CDO, who will come up with "specials" which incorporate the specimen timber as a feature.
operations
2000 Sales
$ mil. % of total
Wood furniture 25.7 70
Upholstered furniture 9.7 27
Other 1.2 3
Total 36.74 100
Financials
Fiscal Year-End: November 2000
2000 Sales (mil.): $36.74
1-Yr. Sales Growth: (6.8%)
2000 Net Inc. (mil.): $1.00
1-Yr. Net Inc. Growth: (44.4%)
2000 Employees: 410
1-Yr. Employee Growth: (12.8%)
see finance charts
All amounts in millions of US Dollars except per
share amounts.
Some figures may not add up due to rounding.
| Nov 00 | Nov 99 | Nov 98 | |
| Revenue | 36.7 | 39.4 | 39.8 |
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| Cost of Goods Sold | 30.2 | 30.9 | 32.4 |
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| Gross Profit | 6.5 | 8.5 | 7.4 |
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| Gross Profit Margin | 17.7% | 21.6% | 18.5% |
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| SG&A Expense | 6.27 | 7.3 | 6.4 |
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| Operating Income | .35 | 1.25 | .97 |
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| Operating Margin | 1.0% | 3.2% | 2.4% |
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| Nonoperating Income | 2.3 | 1.4 | 1.1 |
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| Nonoperating Expenses | .45 | 0.0 | 0.0 |
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| Income Before Taxes | 1.5 | 2.6 | 2.1 |
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| Income Taxes | .47 | .83 | .54 |
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| Net Income After Taxes | 1.0 | 1.8 | 1.6 |
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| Continuing Operations | 1.0 | 1.8 | 1.6 |
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| Discontinued Operations | 0.0 | 0.0 | 0.0 |
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| Total Operations | 1.0 | 1.8 | 1.6 |
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| Total Net Income | 1.0 | 1.8 | 1.6 |
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| Net Profit Margin | 2.7% | 4.6% | 3.9% |
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| Diluted EPS from Continuing Operations | 0.85 | 1.44 | 1.20 |
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| Diluted EPS from Discontinued Operations | 0.00 | 0.00 | 0.00 |
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| Diluted EPS from Total Operations | 0.85 | 1.44 | 1.20 |
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| Diluted EPS from Total Net Income | 0.82 | 1.44 | 1.20 |
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| Dividends per Share | 0.60 | 0.80 | 1.00 |
| Nov 00 | Nov 99 | Nov 98 | |
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| Cash | 3.3 | 5.7 | 5.5 |
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| Net Receivables | 70.3 | 64.7 | 59.2 |
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| Inventories | 50.2 | 50.2 | 47.3 |
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| Other Current Assets | 13.1 | 15.6 | 31.7 |
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| Total Current Assets | 136.9 | 136.3 | 143.6 |
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| Net Fixed Assets | 94.0 | 93.2 | 56.4 |
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| Other Noncurrent Assets | 115.8 | 113.4 | 121.4 |
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| Total Assets | 346.7 | 342.8 | 321.5 |
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| Accounts Payable | 20.3 | 30.1 | 20.2 |
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| Short-Term Debt | 0.0 | 0.0 | 0.0 |
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| Other Current Liabilities | 21.6 | 26.8 | 24.5 |
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| Total Current Liabilities | 41.9 | 56.9 | 44.7 |
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| Long-Term Debt | 45.0 | 18.0 | 0.0 |
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| Other Noncurrent Liabilities | 10.6 | 11.0 | 11.3 |
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| Total Liabilities | 97.5 | 87.1 | 56.6 |
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| Preferred Stock Equity | 0.0 | 0.0 | 0.0 |
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| Common Stock Equity | 249.1 | 255.8 | 264.9 |
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| Total Equity | 249.1 | 255.8 | 264.9 |
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| Shares Outstanding (mil.) | 11.8 | 11.9 | 12.8 |
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| Nov 00 | Nov 99 | Nov 98 | |
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| Net Operating Cash Flow | (4.3) | 16.7 | 4.5 |
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| Net Investing Cash Flow | (11.1) | (7.4) | 1.6 |
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| Net Financing Cash Flow | 12.9 | (9.1) | (14.9) |
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| Net Change in Cash | (2.5) | 0.2 | (8.9) |
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| Depreciation & Amortization | 10.0 | 8.4 | 6.9 |
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| Capital Expenditures | (18.3) | (47.8) | (22.6) |
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| Cash Dividends Paid | (9.5) | (10.0) | (10.4) |
| Year | Revenue ($ mil.) |
Net Income ($ mil.) |
Net Profit Margin |
Employees |
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| Nov 00 | 367.4 | 10.0 | 2.7% | 4,100 |
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| Nov 99 | 394.4 | 18.0 | 4.6% | 4,700 |
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| Nov 98 | 397.6 | 15.7 | 3.9% | 5,400 |
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| Nov 97 | 446.9 | (19.6) | -- | 5,700 |
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| Nov 96 | 450.7 | 18.5 | 4.1% | 6,900 |
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| Nov 95 | 490.8 | 22.9 | 4.7% | 7,400 |
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| Nov 94 | 510.6 | 24.5 | 4.8% | 7,800 |
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| Nov 93 | 503.8 | 25.9 | 5.1% | 7,800 |
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| Nov 92 | 473.4 | 27.5 | 5.8% | 7,400 |
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| Nov 91 | 401.6 | 19.8 | 4.9% | 8,500 |
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