Kenneth Austin, chief financial officer of Morin Equipment Ltd., is responsible for the company's budgeting process. Austin's staff is preparing the Morin cash budget for 2014. A key input to the budgeting process is last year's statement of cash flows, which follows (amounts in thousands):

Requirements
1. Prepare the Morin Equipment Ltd. cash budget for 2014. Date the budget simply "2014" and denote the beginning and ending cash balances as "beginning" and "ending." Assume the company expects 2014 to be the same as 2013, but with the following changes:
a. In 2014, the company expects a 15% increase in collections from customers and a 20% increase in purchases of inventory.
b. There will be no sales of investments in 2014.
c. Morin plans to issue no shares in 2014.
d. Morin plans to end the year with a cash balance of $2,000 thousand.
2. Does the company's cash budget for 2014 suggest that Morin is growing, holding steady, or decreasing in size?

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Morin Equipment Ltd. Statement of Cash Flows 2013 (in thousands) Cash Flows From Operating Activities Collections from customers Interest received Purchases of inventory 60,000 100 (44,000) (13,900 2,200 Net cash provided by operati Cash Flows From Investing Activities Purchases of equipment Purchases of investments Sales of investments (4,300) (200) Net cash used for investing activities (4,100) Cash Flows From Financing Activities Payment of long-term debt Issuance of shares Payment of cash dividends (300) 1,200 Net cash provided by financing activities Increase (decrease) in cash. Cash, beginning of year Cash, end of year (1,500) 2,700 S 1,200