Show the minimum size loan that would be needed to support the company and that the company can afford. Show as much work, data analysis as you can.

Exhibit 2 Balance Sheets, 2012-2013 (thousands of dollars)
	2012					2013
	August	September	October	November	December	January	February	March	April	May
Cash	8,350	3,328	3,523	4,511	4,239	4,878	5,182	3,962	6,277	4,994
Accounts receivablea	5,793	5,969	6,421	5,851	6,009	6,170	5,606	5,197	3,365	3,744
Inventory	7,154	7,364	7,524	7,219	7,277	7,097	7,529	8,371	11,234	12,163
Current assets	21,297	16,661	17,468	17,581	17,525	18,145	18,317	17,530	20,876	20,901
Gross PP&E	45,500	45,500	45,500	45,500	45,500	45,500	45,500	45,500	45,500	45,500
Accumulated depreciationb	30,368	30,488	30,608	30,728	30,848	30,968	31,088	31,208	31,328	31,448
Net PP&E	15,132	15,012	14,892	14,772	14,652	14,532	14,412	14,292	14,172	14,052
Prepaid expenses	242	58	23	45	47	52	65	46	46	54
Total assets	36,671	31,731	32,383	32,398	32,224	32,729	32,794	31,868	35,094	35,007
Accounts payablec	4,977	5,197	5,347	5,352	5,110	5,130	5,162	5,122	6,223	5,969
Notes payable, bank	0	5,000	5,000	5,000	5,000	5,000	5,000	5,000	5,000	5,000
Accrued taxesd	252	4	174	331	107	269	417	140	216	273
Other accrued expenses	1,500	1,542	1,542	1,542	1,542	1,542	1,542	1,142	1,142	1,142
Customer advance payments	1,651	1,651	1,651	1,200	1,200	1,200	800	800	2,700	2,700
Current liabilities	8,380	13,394	13,714	13,425	12,959	13,141	12,921	12,204	15,281	15,084
Shareholders' equity	28,291	18,337	18,668	18,973	19,265	19,588	19,874	19,664	19,813	19,923
Total liabilities and equity	36,671	31,731	32,383	32,398	32,224	32,729	32,794	31,868	35,094	35,007
a Selling term of net 30 days.
b Depreciation of $120,000 per month.
c Purchase terms of net 30 days.
d Outstanding taxes on 2012 fiscal year income were due January 15, 2013. On December 15, 2011, March 15, 2012, June 15, 2012, and September 15, 2012, payments of 25% of each of the estimated tax for 2012 ($1,500,000) were due. Taxes payable for 2013 were assumed to be $1,500,000 and would be paid on December 15, 2012, March 15, 2013, June 15, 2013, and September 15, 2013, in equal increments.
		-9,954
		18,337

Exhibit 3 Income Statements, 2012-2013 (thousands of dollars)
	2012 August	2012 September	Fiscal Year Ending 09/30/2012	2012 October	2012 November	2012 December	2013 January	2013 February	2013 March	2013 April	2013 May	Eight Months Total
Net sales	6,321	5,969	71,642	6,421	6,302	6,009	6,170	6,006	5,197	4,165	3,744	44,014
COGS	4,994	4,727	56,955	5,003	4,914	4,695	4,815	4,692	4,087	3,215	2,876	34,297
Gross profit	1,327	1,242	14,687	1,418	1,388	1,314	1,355	1,314	1,110	950	868	9,717
Operating expenses	773	763	9,509	777	788	733	728	744	685	587	566	5,608
Depreciation and amortization	120	120	1,440	120	120	120	120	120	120	120	120	960
Interest expensea	0	0	0	25	25	25	25	25	25	25	25	200
Interest incomeb	13	14	120	6	6	8	7	8	9	7	10	60
Profit (loss) before tax	447	373	3,858	502	461	443	489	433	289	225	167	3,009
Income taxesc	152	127	1,312	171	157	151	166	147	98	76	57	1,023
Net income	295	246	2,546	331	304	293	323	286	191	148	111	1,986
Dividends	0	200	400	0	0	0	0	0	400	0	0	400
a 6% annualized interest rate charged on outstanding bank loans.
b 2% annualized rate of return on beginning monthly cash balances.
c The federal tax rate on all earnings was 34%.

Jackson Automotive Systems It was early June 2013. Heather James, vice president at the Michigan State Bank, was considering a loan request from a longtime client, Jackson Automotive Systems. Jackson had requested the renewal of an existing term loan with the bank in the amount of $5 million that was originally scheduled to be repaid at the end of the month. Jackson was also seeking to borrow an additional $2.4 million to fund the acquisition of a long-needed piece of equipment, which it planned to purchase in late July. Both loans, which totaled $7.4 million, would be repayable on September 30, 2013 Jackson Automotive Systems, an Original Equipment Manufacturer (OEM) located in Jackson, Michigan, carried product lines in advanced heating and air conditioning systems, engine cooling systems and parts, and fuel injection and transfer systems, as well as various other engine parts. Production of these lines required sophisticated and expensive precision equipment. The company's customers were relable and reputable automotive assemblers located nearby in the Michigan area. Industry Background At the time of the loan in 2013, there were over 5,000 automotive parts suppliers located in the U.S. Less than 200 companies had annual sales of more than $100 million, while the remaining companies were small producers, representing a highly fragmented market. Small private companies, such as Jackson Automotive Systems, had specialized production lines and relied on sales to local customers. Given the location of the "big three" U.S. automotive companies, the state of Michigarn hosted the l argest presence of OEMs in comparison to the rest of the country The U.S. OEMs experienced a severe slump in production after the 2008 financial crisis, with sales dropping more than 30%. Many suppliers managed to survive the economic downturn by rationing capacity and production. The industry was running at about 55% capacity during the financial crisis. Traditional products that required low-skill labor had already had their production shifted to Asia. Overseas producers from countries such as China and India were increasingly competing for U.S. market share, with any gains coming at the expenses of U.S. manufacturing participants. This fierce competition, coupled with higher cost structures, forced a number of U.S. OEMs into bankruptcy Fortunately, the industry had rebounded since 2010 and had since returned to profitability in 2011. However, given the slow economic recovery and the high prices of raw materials, competition was still fierce