Table 3.3 shows the December 31, 2022, pro forma balance sheet and income statements for R&E Supplies, Inc. The pro forma balance sheet shows that R&E Supplies will need external funding from the bank of $1.38 million. However, shown is almost $1.3 million in cash and short-term securities. Why are they talking to the bank about such a large amount when they have most of this sum in their cash account?

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TABLE 3.3 Pro Forma Financial Statements for R&E Supplies, Inc., December 31, 2022 ($ thousands) Income Statement Net sales Cost of goods sold Gross profit Expenses: General, selling, and administrative expenses Net interest expense Earnings before tax Tax Earnings after tax Assets Current assets: Cash and securities Accounts receivable Inventories Prepaid expenses Total current assets Net fixed assets Balance Sheet 2022 $25,766 22,159 3,607 3,092 90 425 106 $ 319 $ 1,271 3,600 2,462 20 7,353 280 Comments 25% increase 86% of sales 12% of sales Initially constant 25% tax rate 18 days' sales 51-day collection period 9 times turnover Rough estimate See text discussion