Case
Teaching Notes
Supplementary Resources
Abstract
Over-land trucking and freight has a long-established and mutually beneficial business relationship with a major international automotive parts company, FHP Technologies. Management at FHP has approached Over-land with a request to provide additional routes that are important to the efficiency of its supply chain. Over-land’s management wishes to nurture the business relationship with FHP but is concerned about the available capacity to service the new routes, potential risks, and profitability associated with FHP’s request.
This case was prepared for inclusion in Sage Business Cases primarily as a basis for classroom discussion or self-study, and is not meant to illustrate either effective or ineffective management styles. Nothing herein shall be deemed to be an endorsement of any kind. This case is for scholarly, educational, or personal use only within your university, and cannot be forwarded outside the university or used for other commercial purposes.
2024 Sage Publications, Inc. All Rights Reserved
Resources
Exhibit 1: Income from Operations
(All financial information in the case has been scaled and disguised for educational purposes.)
Over-land Trucking and Freight Income from Operations For the year ending December 31, 2013 | ||
Revenue | FYE 12/31/2013 | Per Mile |
Line Haul | $20,925,280 | $1.86 |
Fuel Surcharge | 4,950,160 | 0.44 |
Miscellaneous | 450,120 | 0.04 |
Total Revenue | $26,325,570 | $2.34 |
Variable Expenses | ||
Insurance | 675,120 | 0.06 |
Fuel | 8,775,190 | 0.78 |
Oil Lubricants | 112,700 | 0.01 |
Tolls | 112,550 | 0.01 |
Parts and Small Tools | 787,630 | 0.07 |
Hourly Wages: Drivers | 4,950,160 | 0.44 |
Trailer Pool Expense | 255,120 | 0.02 |
Total Variable | 15,638,480 | 1.39 |
Fixed Expenses | ||
Insurance | ||
General Liability | 112,620 | 0.01 |
Physical Damage | 225,010 | 0.02 |
Workers Compensation | 226,000 | 0.02 |
Health Insurance | 224,500 | 0.02 |
Security | 111,750 | 0.01 |
Depreciation | 2,137,500 | 0.19 |
Salaries, Benefits (Garage) | 675,000 | 0.06 |
Salaries, Benefits (Office) | 1,012,520 | 0.09 |
Bad Debt Expense | 113,500 | 0.01 |
Permits | 111,520 | 0.01 |
Rental Equipment | 1,013,000 | 0.09 |
Payroll Taxes | 562,500 | 0.05 |
Accounting Fees, Supplies, Computer Maintenance | 112,350 | 0.01 |
Miscellaneous | 337,510 | 0.03 |
Total Variable | 6,975,280 | 0.62 |
Income from Operations | $3,681,810 | $0.33 |
Note: Per-mile values are based on 11,250,000 miles and have been rounded to two decimal places.
Exhibit 2: Over-land Balance Sheet
Over-land Trucking and Freight Balance Sheet For the year ending December 31, 2013 | ||
Assets | ||
Current Assets | ||
Cash | $200,000 | |
Accounts Receivable | 300.000 | |
Total | $500,000 | |
Property Plant and Equipment | ||
Land | 1,000,000 | |
Buildings | 3,000,000 | |
Accumulated Depreciation Buildings | (1,250,000) | |
Tractors, Trailers, and Equipment | 18,650,000 | |
Accumulated Depreciation | (4,750,000) | |
Total | $16,650,000 | |
Total Assets | $17,150,000 | |
Liabilities and Equity | ||
Current Liabilities | ||
Accounts Payable | 150,000 | |
Taxes Payable | 65,000 | |
Current Portion of Long-Term Debt | 35 000 | |
Total Current Liabilities | $250,000 | |
Long-Term Liabilities | ||
Notes Payable | 1,865,000 | |
Total Long-Term Liabilities | $1,865,000 | |
Total Liabilities | $2,115,000 | |
Owner’s Equity | ||
Contributed Capital | 3,550,000 | |
Retained Earnings | 11,485,000 | |
Total Owner’s Equity | $15,035,000 | |
Total Liabilities and Owner’s Equity | $17,150,000 |
This case was prepared for inclusion in Sage Business Cases primarily as a basis for classroom discussion or self-study, and is not meant to illustrate either effective or ineffective management styles. Nothing herein shall be deemed to be an endorsement of any kind. This case is for scholarly, educational, or personal use only within your university, and cannot be forwarded outside the university or used for other commercial purposes.
2024 Sage Publications, Inc. All Rights Reserved