Artero Corporation, discussed in Problems 9 and 11, is a retailer of toy products. This is a
Question:
MONTH SALES FORECASTS ($)
July ......... 900,000
August ....... 1,100,000
September .... 1,400,000
October ...... 1,700,000
November ..... 2,800,000
December ...... 4,000,000
A. Based on your financial statement projections for the last six months of 2012, indicate (1) whether new bank borrowing will be needed to finance the seasonal sales pattern and (2) if a loan is needed, when does the need start occurring and what is the maximum amount needed?
B. Assume that sales are forecasted for the first three months of 2013 as follows:
January = $3 million, February = $2 million, and March = $1 million. Will Artero be able to pay off any bank borrowing that is needed in 2012? Based on your analyses, what type(s), if any, of bank loan(s) will be needed in 2012?
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Related Book For
Entrepreneurial Finance
ISBN: 978-0538478151
4th edition
Authors: J . chris leach, Ronald w. melicher
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