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Product cover image for Strong Tie Ltd.

Strong Tie Ltd.

Dan Thompson

Product #:9B11N021
Supplier:Ivey
Discipline:Accounting, Finance
Setting:Canada, 2009
Details:Case (PDF) • 5 pages • 2012-02-21

Subjects:

Financial statementsFinance and investingAccounting

Industries:

Fabrication and manufacturing

Geography:

CanadaNorth America
Your Price:$4.62

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The CEO of Strong Tie received the draft 2008 financial statements for the company, which was a manufacturer of structural connectors used in the building industry. He began to question the company’s performance when he compared the statements to those of previous years. How were profits holding up given the intense price competition in the industry? Were attempts to lower costs through more automation paying off? Were the current problems in the U.S. housing market going to continue to reduce demand for connectors? How would lenders react to this poor performance? Was the company’s financing in danger?



After discussing the matter extensively with Strong Tie’s CFO, it was decided that an outside consultant should be hired to provide an independent analysis of the company’s recent performance and to provide suggestions for future action.

Learning Objectives

This case provides students who are taking their first course in corporate finance with the opportunity to apply their skills in financial statement analysis. Students not only calculate and analyze an array of financial ratios, they also learn to use this knowledge in plotting a strategic direction for a manufacturer of a low-tech product facing increasingly intense international competition.
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Case Study: Strong Tie Ltd. (English version) | Ivey Publishing