Financial Analysis of Budd Canada, Inc.

Paper Summary:

This is a financial report on Budd Canada, Inc, a company in the business of supplying automotive components, specializing in the production of bumpers, chassis components and light truck frames. It is the writer's recommendation that a banking institution does not consider Budd to be a viable investment risk at this time as it has had a ten year history of increasing sales coupled with even greater decreasing profits. This paper shows how the company's position in the market is precarious.

From the Paper:

"This general industry trends also touched Budd Canada. The Corporation reported a $94.2 million dollar net loss as of September 30, 2001. Budd had mixed results this year due to the need to ramp-up production on its new state-of-the-art system in order to meet customer demand. Typically, the introduction of new equipment produces a negative financial effect initially. The 2001 losses were anticipated however early losses were greater than anticipated and a new management team was put into place. Traditional product lines declined, as order shifted to newer product lines. The Budd Company is substantially dependent upon two major customers. These two customers account for 99% of sales and 99% of the accounts receivable balance."

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