Butler Lumber Case Study Annotated Bibliography
Search for the following concepts when looking for appropriate resources:
�Financial Analysis
�Ratio Analysis
�Financing operations
�Current Asset Management
General guidelines for completing this assignment:
�You need to find at least three relevant and credible sources that can be used to support the concepts
discussed in the case (Three sources is the minimum; having only three will not get you the highest
grade.)
�The bibliography needs to be done as an APA formatted annotated bibliography. Please use the link
below to see how an annotated bibliography is formatted.
�Each cited source needs to be specifically linked to the concepts in the case. Please do not cite
random sources.
�Make sure your annotation captures the important point of the source. Please do not give a one-
sentence summary.
Arbidane, I., & Zelgalve, E. (2012). Current Assets Structure and Exploration of Business in
Latvia. European Integration Studies, 6, 185-191.
Authors of this article explore business and current asset structure in Latvia with an
emphasis on current asset management which has been gaining increasing importance in
control system to ensure financial stability in firms. Authors sought to analyze and
explore the current asset’s structure as well as the effectiveness of the indicators that
characterize the Latvian business with regards to economic conditions that are ever
changing. The exploration and analysis of the current asset structure considered the
changing trends and calculation of the indicators that characterize the current assets’
effectiveness such as working capital, turnover of current assets and liquidity based on
economic development tendencies at various stages. The authors found that current assets
of Latvian companies, their indicators and structure are considerably influenced by
BUTLER LUMBER ANNOTATED BIBLIOGRAPHY 2
economic conditions whereby they are favorable under flourishing and stable economic
situation, and vice versa. The study is highly applicable to the Butler Lumber case study,
which is seeking for sources of finance to fund its expansion operations.
Bolek, M. (2014). Return on current assets, Working capital and required Rate of return on
equity. Financial internet Quarterly “e-Finanse”, 10(2), 1-10.
The author in this paper presents an analysis of the problem of return on working capital
and return on current assets in relation to the cost of equity which is invested in a
company. The author states that the company’s management decisions and equilibrium
are influenced by the risk, liquidity, rate of return and profitability trade-offs. The Capital
Asset Pricing Model was used to conduct the analysis and the findings show a positive
relationship between the cash conversion cycle and return on current assets as well as
return on working capital and cost of equity meaning that profitability is related to the
cash conversion cycle, working capital and the management of current assets. The
findings of this study mirrors the situation at Butler Lumber, which despite the increasing
profits is faced by an acute shortage of finance to finance expansion strategy something
which can be averted based appropriate balancing of working capital, return on current
assets as well as return on equity.
El- Dalabeeh, A.-R. (2013). The Role of Financial Analysis Ratio in Evaluating Performance
(Case Study: National Chlorine industry). Interdisciplinary Journal of Contemporary
Research in Business, 5(2), 13-28.
The author of this article sought to identify the management accountant role in the
evaluation of performance of companies based on the methods of financial analysis with
regards to the National Chlorine Industries Co. Ltd performance. The author analyzed the
BUTLER LUMBER ANNOTATED BIBLIOGRAPHY 3
company’s financial statements over a period between 2003 and 2008 using Vertical
Analysis, Horizontal Analysis and Financial Ratios. The authors concluded that analysis
of the company’s financial statements by an administrator accountant led to identification
and explanation of the undesired extreme results and the deviations meaning establishing
a management accounting department in the company which is independent can be used
in performance evaluation through deviations’ analysis. As a result, hiring of a
management accountant by Butler Lumber to be conducting regular financial analysis
would be a better move to avoid cash shortage and increase it credit worthiness.
Gagnon, J., Raskin, M., Remache, J., & Sack, B. (2011). The Financial Market Effects of the
Federal Reserve’s Large-Scale Asset Purchases. International Journal of Central
Banking, 7(1), 3-43.
Authors of this article state that there has been a lower bound of zero of the target federal
funds rate for the traditional policy instrument of the Federal Reserve since December
- As a result, Federal Reserve purchased considerable quantities of assets with long
and medium maturities after easing the monitory policy stance due to the deteriorated
economic outlook. In this paper, the authors provide an explanation of how the
implementation of these purchases was carried out and present a discussion of the
mechanisms through which the economy can be affected by them. In this paper, authors
present evidence on how such purchases resulted to economically long-lasting and
meaningful reductions in interest rates on various securities in long-term, including
securities not considered in the purchase programs. These reductions in interest rates
caused by the large-scale purchases of assets by the Federal Reserve are a reflection of
low risk premiums that include term premiums, instead of lower expectations of short-
BUTLER LUMBER ANNOTATED BIBLIOGRAPHY 4
term interest rates in future. The applicability of this study to the Butler Lumber case
study is in the company’s quest for financing from the bank, especially the loan it intends
to take with regards to the interest rates charged.
Kumbirai, M., & Webb, R. (2010). A financial Ratio Analysis of Commercial Bank Performance
in South Africa. African Review of Economics and Finance, 2(1), 30-53.
Authors of this article conducted an investigation of the commercial banking sector in
South Africa for the period between 2005 and 2009. Financial ratios were used as
measurements for the credit quality performance, liquidity, and profitability of five large
commercial banks in South Africa. The study findings showed that there was
considerable increase in overall bank performance for the first two years considered the
financial statements analysis in context of the obtained financial ratios. However, the
trend significantly changed in 2007 at the global financial crisis onset, and continued to
reach its peak during 2008 to 2009 resulting to deteriorating credit quality, low liquidity
and falling profitability in the banking sector of South Africa. This study is similar to the
case facing Butler Lumber where performance indicated by financial ratios reflects the
prevailing economic situation.
Tugas, F. C. (2012). A Comparative Analysis of the Financial Ratios of Listed Firms Belonging
to the Education Subsector in the Philippines for the Years 2009-2011. International
Journal of Business and Social Science, 3(21), 173-190.
The author states that the focus of most financial statement analyses is directed on
companies within a sector which contributes to significant proportions of economic
figures or posits in a business environment which is highly competitive. However,
irrespective of what motivates the financial statement analysis, the availability of the
BUTLER LUMBER ANNOTATED BIBLIOGRAPHY 5
obtained findings should be ensured to all economic sectors mainly for the purpose of
benchmarking and comparability. The author’s analysis of the financial ratios focuses on
listed firms that belong to the education subsector in Philippines, particularly the three
firms belonging to the education subsector that are listed (i.e. iPeople, Inc. also known as
Malayan Colleges, Far Eastern University, and Centro Escolar University). The financial
statements for the firms considered in this article are for three consecutive years such as
2009, 2010 and 2011 with a specific emphasis on financial ratios including leverage
ratios, activity ratios, liquidity ratios as well as market value ratios. The data to conduct
the analysis of financial statements for the three listed companies were obtained from the
website of Philippine Stock Exchange (PSE) and the results showed that in overall Far
Eastern University ranked first with 44 points, followed by Malayan colleges which
ranked second with 40 points, and then Centro Escolar University ranked third with 36
points. Butler Lumber requires embracing regular analysis of financial ratios such as
leverage ratios, activity ratios, liquidity ratios as well as market value ratios in order to
control its business strategy.
BUTLER LUMBER ANNOTATED BIBLIOGRAPHY 6
Bibliography
Arbidane, I., & Zelgalve, E. (2012). Current Assets Structure and Exploration of Business in
Latvia. European Integration Studies, 6(3), 185-191.
Bolek, M. (2014). Return on current assets, Working capital and required Rate of return on
equity. Financial internet Quarterly “e-Finanse”, 10(2), 1-10.
El- Dalabeeh, A.-R. (2013). The Role of Financial Analysis Ratio in Evaluating Performance
(Case Study: National Chlorine industry). Interdisciplinary Journal of Contemporary
Research in Business, 5(2), 13-28.
Gagnon, J., Raskin, M., Remache, J., & Sack, B. (2011). The Financial Market Effects of the
Federal Reserve’s Large-Scale Asset Purchases. International Journal of Central
Banking, 7(1), 3-43.
Kumbirai, M., & Webb, R. (2010). A financial Ratio Analysis of Commercial Bank Performance
in South Africa. African Review of Economics and Finance, 2(1), 30-53.
Tugas, F. C. (2012). A Comparative Analysis of the Financial Ratios of Listed Firms Belonging
to the Education Subsector in the Philippines for the Years 2009-2011. International
Journal of Business and Social Science, 3(21), 173-190.
