ABC Company, Inc. (ABC) is a 30+ year publication company . Founded by Abe, Barry , and Craig, (ABC), three well known publication executives. The company has grown from humble beginnings as an owner/ operator of some small secondary-market publication houses toone of thelargestethnic-owned and orientedpublication operations in the U. S. Located in Chicago, Illinois . ABC posted net revenues of $78m in 2016 . ABC consists of two core businesses: 1) Ownersh ip of 6 magazine companies and 2) Ownership and operation of the largest targeted publicat ion advertising network in the U.S.

Magazine

ABC's magazin es are all operated under local publication agreements (LPAs) with a publication serviceprovider called Publication Org. ABC owns the assets and provides back-office support (including accounting) to these ventures, but is not involved in programm ing decisions or the direct operations of these businesses.

Network

ABC's network - ABC VISION - is a leading advertising network of outlets in major U.S. markets. ABC's network business involves affiliating with individual outlets by providing a combination of compensation and publication services in exchange for advertising inventory (commercial windows). ABC then combines its inventory int o a number of network products, which it sells to large publ icat i on houses.

Situation

Over t he past five years, the publication industry has performed poorly and ABC has experienced deterioration in both its top-line and profit abilit y. The company had experienced particular difficulty in generating sufficient cash flow to fund its operations and expansion . As a result , the company approached an investment banker regarding raisin g funds through borrowing. Two years ago, after a competitive process,ABC borrowed $14m from DISTRESSED ABL LENDER (DABL) in order to retire existing debt, consolidate certain operations, purchase an additional publication house, and pay down certain obligations including accounts payable and amounts due to insiders. The transaction was structured in the form of a $6m revolving line (secured by accounts receivable)and an $8m term note secured by the assets of ABC. Both obligations carry afixed interest rate of 9.85%. Theterm note amortization is five years beginning in January 2016. Abe, CFO of ABC, a former professional athlete , and the daughter of co-founder and CEO Barry, approached you In late 2016 on the recommendat ion of DABL and her counsel following projection of an apparent liquidity issue in the first quarter of 2017. Abe's cash flow projections indicated that the company might run out of cash as soon as February. As of 12/31/16, ABC has $429k in cash and

$5.883m drawn on its revolver (capped at 60% of A/R) .

Task

I have been asked to make a thirteen-week direct cash flow modelfor the first quarter of 2017 togetherwith an integrated financial projection model (balance sheet, income statement, and direct cash flow) for the year. Also a preliminary liquidation analysis for ABC for a twelve-month wind-down of the business . The company has provided you with actual performance for 2016 as well as certain supporting schedules and a revenue projection for 2017 included in the attached .