Journal of Applied Case Research (JACR)

Loftin Distribution

• Sue Cullers, Buena Vista University
• Judy Lewis, Texas A&M University – San Antonio

Synopsis

This is a decision-based case. Most of the information about Loftin Distribution came from the company’s managers. The information about the other companies came primarily from annual reports filed with the SEC and from the companies’ websites. The names of the company and its president have been disguised in this case; however, all other information about the company was factual. Loftin Distribution operated in the industrial distribution industry, specializing in materials-handling components and related parts and services. This industry was mature and sensitive to economic downturns. Loftin Distribution was a family-owned partnership, had 42 locations in 2010, and its president was committed to growing the business. Issues faced by Loftin’s managers included how the company could continue to grow, how the company could continue to compete successfully in its industry, and how the company could reduce its vulnerability to the effects of the recession.

Keywords:

Strategic management, industrial distribution industry, SWOT decision case, competitive strategy, financial analysis, five forces analysis

Citation:

Cullers, S. & Lewis, J. (2011). Loftin distribution in 2010. Journal of Applied Case Research, V9(2), 1-32. http://swcra.net/Cases/V9_N2a_Loftin_Distribution_case.pdf

Evaluating Loftin

• Judy Lewis, Texas A&M University – San Antonio
• Sue Cullers, Buena Vista University

Synopsis

This is a description-based case. The primary source of data for Loftin Distribution was information provided by the company’s officials; the main source of data for the other companies was annual filings with the Securities and Exchange Commission. The name “Loftin Distribution” was a fictional name to disguise the actual name of the business. The rest of the information is authentic. Loftin Distribution, an industrial distribution company, specialized in materials handling components and related parts and services. Loftin operated in a mature industry, which was sensitive to economic downturns. Financial and non-financial information is given for Loftin Distribution, a partnership, and Applied Industrial Technologies, a corporation and one of Loftin’s chief competitors. Students are asked to analyze each company’s performance, using trend analysis, ratio analysis and common-sized statements. They are asked to consider how the difference in the form of organization might impact their analyses, and what adaptations they might make to the ratios to make them comparable. Students are asked to express an opinion regarding usefulness of the income statement compared to the cash flow statement in assessing a company’s performance. Additionally, students are asked to consider the usefulness of segment information provided by Motion Industries, another competitor of Loftin. Students are required to draw a conclusion regarding whether Loftin or Applied Industrial Technologies fared better in the recession and express an opinion regarding Loftin’s business model.

Keywords:

Financial statement analysis, upper-level financial accounting, segmental disclosures, industrial distribution industry, ratio analysis

Citation:

Lewis, J. & Cullers, S. (2011). Loftin Distribution – Evaluating Performance in a slowing economy. Journal of Applied Case Research, V9(2), 33-52. http://swcra.net/Cases/

V9_N2b_Loftin_Accounting_case.pdf