Continuing problem 7, now assume that the bank is not willing to extend short-term debt by more
Question:
Continuing problem 7, now assume that the bank is not willing to extend short-term debt by more than $200,000. What policy changes would you recommend to Green Staples so that it can meet its growth target while remaining within the short-term financing limitations?
Problem 7
Continuing problem 6, use the financial statements and the following list of assumptions to construct the firm’s pro forma financial statements for 2019.
Problem 6
The management of Green Staples Inc., a wholesale distributor of office supplies on the East Coast of the United States, is in the process of developing the firm’s financial plans for year 2019. The company has met its goal of expanding its market coverage, having increased its 2018 sales by 8.1 percent, a growth much higher than the industry average. The management believes that 2019 will bring opportunities for further expansion, as one of the local key players is preparing to exit the market (due to the owner’s retirement). However, they also understand that they need to secure in advance the necessary financing sources in order to prudently meet the new target of 11 percent sales growth in 2019. The following charts show the company’s year-end financial statements for the last three years.
Step by Step Answer:
Practical Finance For Operations And Supply Chain Management
ISBN: 9780262043595
1st Edition
Authors: Alejandro Serrano, Spyros D. Lekkakos, James B. Rice