SureCut Shears Corporation

1. Surecut Shears informed HNB that the company would not be able to pay $1.25
million outstanding short-term loan balance due to the retailing recession and also the
companys inability to liquidate the loan.
2. SureCut Shears actually did not grow rapidly and needed extra fund to support its
unstable sales.
3. Risk of excess inventories during the seasonal sales.
American Home Products Corp.
1. AHP difficult to compare to other companies and they were unsure what the
company should do for its capital structure policy.
2. AHP has a corporate culture that it has been following for years. It would be very
difficult to change the culture of a company
Netflix.com, INC.
1. Netflix dropped to 3,794 (-25%) by April 18, 2000, on the day of Netflix S1
Filing. Netflix needs to sustain triple-digit growth for foreseeable future to proceed with
teh companys anticipated IPOs.
2. Netflix actually has not enough earning profit to show a positive cash flow
3. To sustain the sales growth, Netflix may consider a revenue sharing agreement
with movie studios. However, it is uncertain if movie studio willing to sign a revenue
sharing agreement with netflix since Blockbuster already signed with the major movie
studios.
4. Netflix also consider to drop the free-month service promotion in order to free up
enough working capital.
Lex Service PLC
1. Most of the balance from the its sales between 1991 and 1993 was used to pay
about 197 million of debt, leaving this company very little financial leverage.
2. Lex loss 3 million in 1991 compare to its gain on sales of 5 million in 1990.
3. Lex sold its electronic business to Arrow in 1991 and 1992. Lex also sold nearly
all of its share in Arrow Electronics by May 1993.
4. Volvo ended 4 years earlier than its import agreement and provide 100 million as
the value of concession. However, of the 100 million, 20 million was received in cash
on completion of the sale and three sterling loan notes of 26 million, 26 million and
28 million was payable on 1 January 1993, 1994 and 1995, respectively.
5. Lex actual leverage was below managements future target levels.
6. The current market value of Lex property was 31.4 million, about 23% lower
than book value. Lex actual leverage was below managements future target levels
Ocean Carriers
1. An attractive agreement was offered but no ship in Ocean Carriers current fleet
met the customer requirement. And capesize took approximately 10 months to build and
there is no sufficient large size capesizes available in the second hand market.
2. The differences in taxation policies between Hong Kong and United States.
3. The tenability of Ocean Carrier 15-year international regulation special survey.

4. Unreliable future order estimation and vessels would cancelled or converted to

other types of vessels if the market outlook was poor.