1) Compute the Working Capital Requirements of Northwest Corporation.

2) What fraction of the firms current assets is (implicitly) being funded with long-term debt or equity? What is the significance if this figure is large versus small?

3) Assuming a 365-day year, calculate the firms asset cash-to-cash cycle, liability cash- to-cash cycle, and days deficiency. Using this information and the procedure described in the text, estimate the firms working capital loan needs.

4) What general concerns might you have regarding this loan request?

Assets Cash Accounts receivable Inventory Fixed assets $50,000 $375,000 $510,000 $925,000 $1,860,000 Liabilities and Equity Accounts payable $166,000 Accrued expenses $37,000 Notes payable $75,000 Current maturity of long-term debt $25,000 Long-term debt $475,000 Equity $1,082,000 Total liabilities and equity $1,860,000 Total assets Sales: $4,622,800 Cost of goods sold: $3,504,100 Operating expenses: $893,000 Purchases: $3,116,000