Copyright

Hampton Machine Tool Company

Harvard Business School Case 9-280-103
Case Software 2-298-713
Copyright 1997 by the President and Fellows of Harvard College
This case was prepared as the basis for class discussion rather than to
illustrate effective or ineffective handling of an administrative situation.

Page 1

Exhibit 1

Exhibit 1

Shipments at Selling Price (thousands of dollars)

As Forecast
December
1978

1979

January
February
March
April
May
June
July
August

Eight months total

September
October
November
December

As Forecast
Actual September 1979

$1,302
1,872
1,635
1,053
1,293
1,479
1,488
1,797

$861
672
1,866
1,566
873
1,620
723
507

$11,919

$8,688

$1,299
1,347
1,311
2,298

Page 2

$2,163
1,505
1,604
2,265

Exhibit 2

Exhibit 2

Balance Sheets, 1978-1979 (thousands of dollars)

1978

1979

NovemberDecember
Cash
Accounts receivable, net
Inventories

March

June

July

August

$2,520
1,245
2,601

$491
1,863
2,478

$505
1,971
3,474

$1,152
1,893
3,276

$1,678
1,269
3,624

$1,559
684
4,764

6,366

4,842

5,950

6,321

6,571

7,007

4,010

4,010

4,010

4,010

4,010

4,010

2,998

3,010

3,040

3,070

3,080

3,090

Net fixed assets

Prepaid expenses

1,012
62

1,000
40

970
39

940
24

930
24

920
42

Total assets

$7,440

$5,872

$6,959

$7,285

$7,525

$7,969

-$348
561

$1,000
371
777

$1,000
681
849

$1,000
399
678

$1,000
621
585

$1,000
948
552

150
840

74
1,040

373
1,040

354
1,566

407
1,566

479
1,566

1,899

3,262

3,943

3,997

4,179

4,545

Common stock ($10 par value) 1,178

Surplus
4,363

428
2,182

428
2,588

428
2,860

428
2,918

428
2,996

5,541

2,610

3,016

3,288

3,346

3,424

Total liabilities and net worth$7,440

$5,872

$6,959

$7,285

$7,525

$7,969

Current assets
Gross fixed assets
Accumulated depreciation

Notes payable, bank

Accounts payable
Accruals
a

Taxes payable
Customer advance payments
Current liabilities

Net worth

Tax payments in 1979 included $75,000 due March 15 on underpayment of 1978 taxes and four equal payments
of $181,000 due on the fifteenth of April, June, September, and December for estimated 1979 tax liability with
any underpayment of 1979 taxes due March 15, 1980.

Page 3

Exhibit 3

Exhibit 3

Income Statements, 1978-1979 (thousands of dollars)

Fiscal
Year Ending
12/31/1978

December
1978

$7,854

$1,551

$861

5,052

1,122

474

369

1,362

1,137

567

1,197

2,802

429

387

303

504

429

306

1,296

248

103

61

205

172

--

--

15

15

15

Net income before taxes

Income taxes

1,506
723

181
87

269
129

227
109

284
136

Net income

$783

$94

$50

$25

Net sales
Cost of sales

Gross profit
Selling and
administrative
expenses
Interest expense

Dividends

January February

$140

March

1979
April May

June

July August

$672 $1,866 $1,566 $873 $1,620 $723

$118

--

--

$148
--

$507

$8,668

510

276

5,892

423

213

231

2,796

96

130

87

66

920

15

15

15

15

15

120

242
116

195
94

278
133

111
53

150
72

1,756
842

$126 $101
--

--

$145
$100

$58
--

Includes depreciation charges of $150,000 in 1978, $12,000 in December 1978, and $10,000 per month in 1979.

Page 4

Eight
Months
Ending
#######

$78
--

$914
$100