Yates Motors is a family owned and operated car dealership, which means the Yates' are directly involved in day-to-day operations
Yates Motors is a family owned and operated car dealership, which means the Yates' are directly involved in day-to-day operations and know many of their customers on a first-name basis. They are committed to the promise of something better and that's exactly why they've been satisfying customers for over 50 years. Yates Motors is about more than selling cars. Management and staff are committed to offering a total customer care experience, from purchase to ongoing maintenance of the customer's vehicle. In addition to the GMC showrooms, the dealership includes an extensive Parts and Service Department, a state-of-the-art Body Shop, and a full-service Auto Cleaning and Detailing Centre. As well, financing can be handled on the premises.
The Yates Promise:
- To be the leading provider of automotive sales and service in Central Ontario
- To provide superior customer care through honesty, integrity and respect.
- To provide our employees with a safe and positive workplace
- To be a responsible business member of our community.
The Yates automotive story began in 1958, when Mr. George Yates opened his first Auto Repair facility in Barrie. George Yates Jr. and Peter Yates began working with their father while still quite young, and became involved on a full-time basis after graduating from university. In 1974, George Yates Sr. and his sons began selling GM automobiles. In 1988, after their father's retirement, the Yates brothers opened up their cleaning and detailing centre. Since that time, several of George Yates' grandchildren have also joined the company.
When you come to the dealership you will find a 71,000 sq ft GMC dealership and service department. The building features spacious showrooms, large, comfortable waiting areas, and customer work centers with internet access. The Yates Motors team is committed to giving back to the community that has supported them for over 50 years. Long-time supporters of countless local charities and community events, the family's efforts have assisted close to 200 charitable groups in recent years.
- Part 1 - Internal Sources of Funding
- Part 2 - Budget
- Part 3 - The Expansion
PART 1 - INTERNAL SOURCES OF FUNDING
The management of Yates Motors is considering investing $950,000 to purchase a Hyundai dealership and expand operations in Barrie. Last year's financial figures are as follows:
Prior Year - Financials
Next year the company expects sales to increase by 80% due to the expansion. The return on sales is expected to fall to 11.5% due to the initial set up costs.
Management also expects there to be changes in the working capital accounts on the balance sheet.
Due to increased sales with the new dealership, average accounts receivable is expected to increase to $160,000 - a total increase of $70,000 on last year.
Again due to the expansion, Yates' expects to take on more inventory next year. They expect it to increase by $125,000 to $525,000.
Total current assets
Long term Assets
Liabilities and Equity
Working Capital Loan
Total Current liabilities
Long term debts
TOTAL SHAREHOLDERS EQUITY
TOTAL SHAREHOLDERS EQUITY and LIABILITIES
- What was the company's return on total assets last year? ( 2 marks)
- How much cash will internal operations provide (i.e. what is generated by net income and changes in A/R, inventory etc.)? ( 3 marks)
- How much will the company have to raise from external sources to continue with an investment of 950,000 in capital assets? ( 2 marks)