BR Q(10)

Case Link Directions: Click the stream Communications case link and use the information provided to answer this question. What is the impact of sales powth on stream Communications borrowing needs? O Estream Communications has no long-term sales growth and no seasonal sales growth so there is no borrowing used by sales growth ObStream Communications has long-term sales growth and seatonal sales growth both of which are borrowing cam Communication has long-term sules growth wdreasonal sales growth, which reduce its need to borrow trean Communication has been als growth, which is a borrowing cause, but it has no Jong-term sales growth Question (10) ExStream Communications ExStream Communications The following case information includes: Part A Statement of financial position Statements of comprehensive income Monthly sales figures ExStream Communications Part A ExStream Communications Statement of Financial Position (in $000s) As At December 31, 2014: $ ASSETS Current assets Accounts receivable Inventory Other current assets Total current assets 2.350 1,600 495 4,445 Fixed assets 7.750 300 Other noncurrent assets TOTAL ASSETS $ 12.495 $ LIABILITIES AND EQUITY Current liabilities Short-term debt Current portion-LTD Accounts payable Accrued expenses Other current liabilities Total current labioties 2.370 691 1,375 1.114 420 5.970 Long term debt 4,660 Owner's equity 1.865 TOTAL LIABILITIES AND EQUITY $ 12.495 ExStream Communications Part A ExStream Communications Statements of Comprehensive Income (in S000) Years Ended December 31: 2014 2013 2012 2011 $ Sales Cost of goods sold Gross profit $15.500 12.214 3.286 $ 12.200 10,370 1,830 9.750 8.535 1.215 $ 8.288 7.127 1.161 Operating expenses Selling general, and administrative expense Other expense Total operating expenses 1.425 49 1.474 858 28 886 706 20 726 671 19 690 Income before taxes 5 1.812 $ 944 $ 489 $ 471 Taxes 706 396 178 167 $ 1.106 Net Income $ 548 $ 311 $ 304 ExStream Communications Part A ExStream Communications Monthly Sales (In S000s) 2014 2013 January February March April May June July August September October November December Total sales $ 712 930 890 879 1,002 1,220 1.492 1,981 2.248 2.030 1,335 781 $ 15,500 $ 570 603 624 638 712 971 1,311 1.722 1,974 1,647 888 540 $ 12,200