Corporate Finance Trading Creadit

@$@[ Harvard Business School 9-293-135 Rev. Iune 18. 1993 chummy Cards, lnc. In early 1988, Wendy Beaumont, President of Friendly Cards, Inc., met with Amy McConville, a friend and financial consultant. They had been discussing the future of Friendly in relaiion to the research Ms. McConville had been doing on the firm. Mrs. Beaumont commented: Money is tight and, quite frankly, the address of financing maturement is now so high I wish we could sit still for a year. But we in reality cant do that. You know the that record and you saw our growth for last year. Were projecting a 20% increase in sales and an even larger increase in net income for next year (see Exhibits 1 and 2 for the companys income statements, equilibrize sheets and financial projections). I hope you can come up with some suggestions concerning the financing of our expansion, so we can talk nigh them on Friday morning. Industry Background Data In Exhibit publiciy own (American Greetings and Gibson), and one was private (Hallmark). (See Exhibit for financial data on American Greetings and Gibson.) 1988, the greeting card industry consisted of over one C companies; the Big Three (see 3) dominated the scene with an overwhelming commercialise share.

Of these three, two were 5 The rest of the industry was made up preponderantly of small firms, many of which were privateiy owned and family controlled. Growth, however, was most prominent in the larger firms, which had larger more diversified product declinations and more efficient national distribution channels. Smaller co*patris were often crippled by the expense of setting up a large sales system, of producing a full line and constantly reviewing it, and of designing and preparing new cards. As a result, from 1954 to 1984 the good number of firms in the industry had declined by about 15% each decade Most of this decline occurred within companies of less than 50 employees. In order io compete successfully, all firms had to deal effectiveiy with high... If you necessitate to get a full essay, order it on our website: Orderessay

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