Surecut Shears, Toy World

Case Study Comparison
In this case study comparison of SureCut Shears, Toy World, and Clarkson Lumber we will look at the individual markets, competitive characteristics, and operations specific to each entity. Using the information from the text I will derive and assert what financial strategies each is utilizing and how ratio tests can help decipher the information contained in their income statements and balance sheets. From that information we will explore potential solutions to any challenges they might be facing in an effort to apply and reflect on what we have learned form our readings and any classroom discussions.
SureCut Shears, Inc. has a diverse network of customers that include wholesalers, specialty stores, and local department

has made a profit every year since 1958. Their have attained above average growth throughout this same period which has placed them in an excellent competitive posture as compared to new entrances into the industry. Their biggest competition, according to the text, is overseas companies. Those foreign companies have a competitive advantage of cheaper labor and raw materials available to them. Both would give them a better cash advantage and allow them to more readily expand operations if the need arises.
Operating on a declining seasonal sales cycle, SureCut Shears has the potential to encounter some challenges, one being a failure to repay any short-term liabilities. A modernization plan has contributed to this liquidity dilemma. These challenges will be addressed later in this essay.
Toy World, Inc has a specific and difficult market to compete in, toys. What is popular today not might be popular tomorrow; making it difficult to predict sales or revenues which impact the cost of storing inventory and purchasing of raw materials. With a seasonal market of more then 30% of sales happening in the later part of the year the market is volatile and has a negative effect on season to season

has a limited market base consisting of new homes being built and home repairs. The bulk of this market is between April and August again limiting them to seasonal sales and difficulty managing cash flows and inventory. Competition for Clarkson can not be derived from the information given, al biet I can assume from the financials that the company is generating a profit and having higher receivables then payables which would make me assert if there is competition Clarkson is meeting the challenge and remaining competitive.
Operating on a seasonal sales cycle from April-September Clarkson has the capacity to store product from one season to the next allowing for a more smooth production year versus a ramp up then shut-down cycle, allowing Clarkson to progressively growing year after year.
Now that the basic information of each companies situation is known, lets dive into the financial strategies of each company and see if they are successful or in need of some adjustments. Table 1.1 shows how liquid the assets are for our three companies.
Table