Working capital management is critical for any company's financial health and operational success. In this case, we will examine Baldwin's current working capital position and project the next two turns to forecast future performance. This will allow us to advise executive management on potential risks, key goals, and recommended actions to maintain adequate liquidity. Baldwin World 2. Analysis: Please provide a series of footnotes and short narratives where you report out to management regarding the following issues/questions:

1. Describe your assumptions for each line item

2. Identify what are the key goals behind your projection

3. Explain the risks associated with your projection and assumptions

Cash Flow Statement Survey
Cash flows from operating activities
Net Income (Loss)	$1,788
Adjustment for non-cash items:
Depreciation	$10,213
Extraordinary gains/losses/write-offs	$0
Changes in current assets and liabilities:
Accounts payable	-$2,785
Inventory	$19,024
Accounts receivable	-$2,231
Net cash from operations	$26,010
Cash flows from investing activities
Plant improvements (net)	-$13,200
Cash flows from financing activities
Dividends paid	$0
Sales of common stock	$5,000
Purchase of common stock	$0
Cash from long term debt issued	$5,000
Early retirement of long term debt	$0
Retirement of current debt	-$17,879
Cash from current debt borrowing	$0
Cash from emergency loan	$0
Net cash from financing activities	-$7,879
Net change in cash position	$4,931
Balance Sheet Survey
Cash	$4,931
Accounts Receivable	$12,582
Inventory	$16,144
Total Current Assets	$33,657
Plant and equipment	$153,200
Accumulated Depreciation	-$51,867
Total Fixed Assets	$101,333
Total Assets	$134,990
Accounts Payable	$6,466
Current Debt	$6,950
Total Current Liabilities	$13,416
Long Term Debt	$58,650
Total Liabilities	$72,066
Common Stock	$37,060
Retained Earnings	$25,865
Total Equity	$62,925
Total Liabilities & Owners' Equity	$134,990
Income Statement Survey
Sales	$153,080
Variable Costs (Labor, Material, Carry)	$99,626
Contribution Margin	$53,454
Depreciation	$10,213
SGA (R&D, Promo, Sales, Admin)	$31,710
Other (Fees, Writeoffs, TQM, Bonuses)	$500
EBIT	$11,031
Interest (Short term, Long term)	$8,225
Taxes	$982
Profit Sharing	$36
Net Profit	$1,788

Answer rating: 100% (QA)

1 Assumptions for each line item Net Income Loss The assumption is that the companys net income for the period is 1788 Depreciation The assumption is that the depreciation expense is 10213 This is a n... View the full answer