Case Questions Jackson Automotive (1) Prepare a Sources and Uses of Funds (aka Cash Flow) Statement for the period August, 2012 through May, 2013. (2) What insight(s) should the above Sources and Uses of Funds give Heather James, Vice President at Michigan State Bank? (3) Prepare a monthly cash budget and monthly pro-forma income statements and balance sheets for the last four months of the fiscal year. Be prepared to discuss the implications of these statements in class.

I need a balance sheet, an income statment, and a statement of cash flow and the step by step method of ever # entry. thanks

Background

1.

Jackson Automotive System was founded in 1961.2.

Larry Edwards took over the business in the mid 1990s.3.

Successfully led the company through 2008-2009 global recessions.4.

Jackson was on pace for its first year of capacity sales since 2007.5.

In 2013, there were over 5,000 supplies in US with less than 200 companies had annual sales ofmore than $100 million.6.

Located in the Michigan area with the Big Three.

7.

In 2008, sales dropping more than 30%; The Industry was running at about 55% capacity duringthe financial crisis.8.

The industry has rebounded since 2010 and returned profitability 2010 and returnedprofitability in 2011.

Issues

1.

Group of dissident shareholders moved Edwards to repurchase 40%of outstanding commonshares for $10 million.2.

& 5 million came from cash and the other $5 million came from a 10 month short term loan.3.

Emerging from the financial crisis looking to ramp up production.4.

$2.4 Million worth of capital equipment needed to maintain production capacity5.

$5 Million Short Term Loan Now due6.

Shipment Delays due to material shortages caused shortfall in April-May Actual Sales7.

Shortfalls hindered the companys ability to pay back 5 Million loan in June

8.

These components have arrived and items are to be shipped in June

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Scenario Comparison for Jackson AutomotiveBalance Sheet September 30 2013

Scenario 1 Scenario 2 Scenario 3Cash 870 4,470 2,860Accounts Receivable 5,954 5,954 5,954Inventory 7,300 7,300 7,300Current Assets 14,124 17,724 16,114Gross PP&E 47,900 47,900 47,900Accumulated Depreciation 32,408 32,408 32,408Net PP&E 15,492 15,492 15,492Prepaid Expenses 54 54 54Total Assets 29,670 33,270 31,660Accounts Payable 5,200 5,200 5,200Notes Payable, Bank - - 2,000Accrued Taxes 748 748 745Other Accrued Expenses 1,142 1,142 1,142Costumer Advance - - -Payments 1,479 1,479 1,479Current Liabilities 8,569 8,569 10,566Shareholders' Equity 21,101 24,701 21,094Total Liabilities and Equity 29,670 33,270 31,660

Ratio Analysis2012 2013

Aug Sept Aug SeptNet Working Capital 12,917 3,267 6,107 9,155Current Ratio 4.38 2.37 2.36 3.88Inventory Turnover 0.70 0.64 0.77 0.79Average Age of Inventory(Days) 523 569 475 463Debt Ratio 23% 42% 2% 26%Times Interest Earned - - 14.62 15.71

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5Cs :

Credit Character, Credit Capacity, Credit Conditions, Credit Collateral, Credit Capital

Conclusion

1.

Requesting Extension for 5M dollar short-term loan for 4 months2.

Additional 2.4 M dollar short-term loan3.

Payable over one year4.

Monthly principle payments $200,0005.

Annual Interest Rate of 7%6.

Interest Payments of $91,000