Why does Mr. Cartwright have to borrow so much money to support this profitable business? In order for the Cartwright Lumber Company to sustain its growth rate, they will have to get additional external funding. Growth in sales nearly doubled from 2001 to 2003, with a percentage of 18% and 34% in 2002 and 2003, respectively ("Cartwright Lumber Company," 2004). While sales are growing at a steady rate, the company's cash is steadily decreasing as the years pass by 20% and 17%, in 2002 and 2003 ("Cartwright Lumber Company," 2004). The financial statements indicate that the accounts receivable has grown at a higher rate than sales, which suggest that the company cannot support the growing sales only by relying on the assets. Although financial statements indicated that Cartwright has a positive cash ow and increasing revenue over the past few years, Cartwright's borrowings and loans have continued to increase as well. Cartwright wanted to purchase all of Stark's stocks or ownership in the company, which made him pull loans for those purchases. To pay off Stark, Cartwright gave him a note of $105,000 to be paid off in 2002 ("Cartwright Lumber Company," 2004). To pay off that specific note, Cartwright took another loan of $70,000 to be paid in the next 10 years and that loan also carried an interest rate of 11%. These borrowings reduced Cartwright's spending potential, which prevented him from taking any purchase discounts in order to settle the lender's credits early. Any cash ow that was generated was invested back into the business, which would increase the sales volume