1) What seems to be the major problem with McGovern Distributing Inc.? Why has this problem occurred?

2) Based on the prior years' financial statements, what conclusion do you think Carl would be justified in reaching? What calculations should he make to analyze the cash position of the company? Substantiate your answer by making the necessary calculations.

3) Should Carl prepare a quarterly or monthly cash budget got McGovern Distributing Inc.? Explain why.

4) Prepare a suitable cash budget for McGovern Distributing Inc. Build in a minimum cash balance and a maximum cash balance as requested by Robert. Assume that the cash position at the start of the budgeting period is zero.

5) Based on your calculations, which months seem to be the most vulnerable to cash deficits and which ones have the greatest surplus funds?

6) If borrowed funds cost 10% per year and excess funds can be invested at 6% per year, prepare an annual financial plan for McGovern Distributing Inc.

7) How might the firm avoid cash shortages in the future? Please explain.

8) Based on the data provided calculate and comment on the absolute liquidity of McGovern Distributing Inc.