Lending Situation paper Term Example | Topics and Well Written Essays - 750 words

Lending Situation - Term Paper Example As it looks, the company is currently struggling in the market since the margins reflected in the last financial records show that it made a profit of only $275,000 the previous year. It is even more worrying to learn that there was a drop in the company’s revenues from the previous year (6,150,000 to 5,200,000); an indication that the company’s revenues have been declining over the years. It is also clear that this decline is majorly attributed to the fact that the company is still operating on the traditional old ways of print media while the current world is shifting to the digital media. Indications are that the company is competing with other major producers which give the company a stiff competition in the market. For the construction of the new plant to take place, it will need a duration of 12 months to be completed which is a long time since during this period there will be no increase in production and the company will therefore have to rely only on the already depreciating revenues from the old press. On the positive end, Mr. Harvey’s plan seems to be a well thought out investment to salvage the company from declining; it is a promising kind of investment since this is where the market trend is heading to. With the establishment of the new plant, he will be able to maintain and even increase company’s market share. This will tremendously increase the revenue base of the company. The company is well located in the suburbs where there is availability of labour required in the plant. An area of 150 miles is a large area dominated by the company and focusing on this market will give the company good revenue. It is also important to note that Mr. Harvey is not abandoning the printing altogether because there will always be a need for print media even with the shift in technology. This will provide continuous income to the company. As pointed out by Ahlers, print media in the form of books, magazines, newspapers will