Pinnacle Manufacturing Case Summary
After reviewing the information about the asset, debt, and equity it does not appear that the company has improved for the given two years. The assets all together are in fact lower than the prior year. The company earned a lesser amount of money in 2004 than in 2003. The majority of the assets seem to be inventory that has not been sold. In my opinion one should truly see more assets from sales instead of it coming from inventory. The long-term debt essentially has risen between the two years, which would not be a positive for the company. The company ought to be making the long-term debt decrease over the years, not rise up. Therefore, reviewing the information given I would not l say that the company is doing better than the prior year.
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In my opinion that as an investor one would not want to see a company with an extreme inventory and a lesser sales amount within the two years. I would think that one would prefer the exact opposite of that. One would prefer an increase on sales and lesser inventory. This would show that the company is in a good or better position. If I was creditor I would certainly not prefer to lend to a company that is has a debt that is higher in 2004 than originally was in 2003. This alone shows that the company is not getting as much sales like they possibly anticipated to pay off their debts owed. Looking at this as an investor or creditor one would not want to research a company or review that the company is not doing its best financially especially while the economy is not so great in itself. This would typically be a red flag and one would not be so eager to invest their money in a company that they would not be able to profit from. I mean this is why people want to invest their money so they can see a
In my opinion that as an investor one would not want to see a company with an extreme inventory and a lesser sales amount within the two years. I would think that one would prefer the exact opposite of that. One would prefer an increase on sales and lesser inventory. This would show that the company is in a good or better position. If I was creditor I would certainly not prefer to lend to a company that is has a debt that is higher in 2004 than originally was in 2003. This alone shows that the company is not getting as much sales like they possibly anticipated to pay off their debts owed. Looking at this as an investor or creditor one would not want to research a company or review that the company is not doing its best financially especially while the economy is not so great in itself. This would typically be a red flag and one would not be so eager to invest their money in a company that they would not be able to profit from. I mean this is why people want to invest their money so they can see a