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Sonla Case

1. Operation

There is a steady growth in sales of the company from 2004-2006. In 2007, the sale doubled as compared to 2006, since the firm had considerable success with laminated wood beams, designed and produced for commercial construction.

In 2008, the company continued to emphasize of this end of biz had growth in sales, through it had to suffer from poor economic conditions.

Through the net income declined from 2004 to 2006, it could be said that the SG&A, depreciation and amortization decreased over three years.

Till 2007 and 2008, net income rose rapidly and 45% of its revenue from laminated wood beam. It could be said that in 2009, the economic seems to concentrate on laminated wood beams show good prospects.

The comp has very low cash in hand in 2008, which can affect seriously on the comps operation. This is due to a very high level of AR high inventory in 2008. The reason for that is the poor economic condition in 2008, leading to the fact that the buying firms meet difficulties in payment for Sonla, and Sonla cannot sell inventories. However, this is the difficult time for not only Sonla, but also others. Therefore, it can be said that Sonla had good operation management with flexibility switch to laminated wood beams.

Assets of the company increased over years, showing their strategy of investment in plant equipment to improve productivity.

In terms of liabilities, in 2008, there is and sudden high increase in not payment bank due to the lack of cash , as mentioned above however, this is due to the overall hard conditions for all the market, not only Sonla.

Total liabilities grew to 105.88% in 2008, however, total asset growth is also 84.55%. It could be said that the company had the strategy to take advantage of the crisis to invest in assets, with low cost of borrowing.

Its current ratio and quick ratio is low in 2007 & 2008, however, this was again due to the crisis, and it also remains attractive to the 2006 level.

Its working capital was improved through years, showing its ability to repay debt. Also its profitability indication are also very positive, with 6,23% operating profit margin in 2008. And its net income margin is 3.16%, in 2008. Regardless poor economic condition. An attractive client for the bank.

2. Business The companys sales were tied closely to residential read estate construction in VN, which expanded rapidly (line of bathtubs & sinks product). However, since vn had to suffer from effects of the world crisis, they switched to laminated wood beams and turned to other potential markets. This shows the flexibility & diversified products of the company. Therefore, their business wide ranges of product lines will help the company overcome the hard time and succeed in the future. 3. Management The board of director is very experience, which is shown through the strategy of a diversified product lines. Also, the organization subordinates. This will help the firm react; beside, the salary incentives for employees are so high. The corporate mgt is good; making both its customers & clients fell satisfied. its worth to lend money to the company