1.Where has the cash gone? Why is there a liquidity problem even though Clarkson looks profitable? Can you pinpoint where the problems might be inventory, receivables?

2.How attractive is to take the trade discounts? Should Clarkson try to take advantage of the 2% trade discounts he can get if pays his Acct. Payables in 10 days versus 30-35 days?

3.Is the cash flow problem going to be effectively solved by taking the new bank loan? Is the loan going to be large enough to finance the expected expansion in sales to $5.5 million in 1996 and to take all trade discounts?

4.Should the bank make the loan? What should Clarkson do?