REQUIRED
1. 2. 3. 4. 5.  Using the data input provided (Exhibit 1), prepare LAF’s
master budgets in Excel. Do not hard-code numbers into
the spreadsheet, except in the financing section of the
cash budget.
 Conduct a sensitivity analysis, decreasing sales 2%, 5%,
and 10% for April through August. New sales levels are
provided in Exhibit 2. Adjust the financing and cash
needs at these new sales levels.
 Determine a credit recommendation for Kent Bank, to
lend or not. Be prepared to justify your credit decision.
 Explain why the cash budget is more important to a bank
than the accounting net income when determining a
credit decision.
Explain why decreases in sales is examined in a
sensitivity analysis for a credit decision.