Dry Supply owner Kaitlyn Nieson has requested approximately $60,000 to purchase three new delivery vans in the coming year.
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Is this loan request consistent with the profile of a typical wholesaler?
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Based on the purpose of the loan and the use of funds, what type of borrowing arrangement(s) is (are) most appropriate?
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Using the financial data, what are feasible repayment terms for Dry Supply for the appropriate borrowing arrangement you identified?
20xz $918 $113 112 $_1 $919 ($631) $ 72 _67 $ 5 $ 31 46 ($ 15) ($641) ($228) $ 12 11 $_1 ($227) $ 5 ($ 0) $ 5 ($ 17) $ 7 6 $ 1 Dry Supply UCA Cash Flow Worksheet Dry Supply UCA Cash Flow Worksheet for 20x 15 In Soom) 20xy net sales $937 + 20xx accounts receivable $109 - 20xy accounts receivable 113 + Accounts receivable (increase) decrease {$_4) $933 =Cash from sales 20xy cost of goods sold (net of depreciation) (5667) +20xx inventory $ 73 - 20xy inventory 72 $ 1 + Inventory (increase) decrease 20xy accounts payable $ 46 20xx accounts payable 42 + Accounts payable increase (decrease) $ 4 = Cash production costs ($662) ($230) 20xy selling, gen. & admin exp. (net of deprec.) +20xy accrued expenses $ 11 20xx accrued expenses 10 + Accrued expenses increase (decrease) $ 1 =Cash operating expenses ($229) 20xy other income $ 5 20xy other expenses ($ 0) = Total miscellaneous $ 5 20xz income tax expense ($ 12) +20xy income taxes payable $ 6 20xx income taxes payable 5 + Income taxes payable increase (decrease) $ 1 = Cash paid for taxes ($ 11) NET CASH AFTER OPERATIONS $ 36 20xy interest expense ($ 7) 20xy dividends or distributions 0 = Financing costs ($ 7) = Net cash income $ 29 - 20xx CMLTD CASH AFTER DEBT AMORTIZATION $ 29 20xy depreciation expense ($ 12) + 20xx net fixed assets $ 45 20xy net fixed assets (49) + Other current assets (increase) decrease ($ 4) = Capital expenditures ($ 16) + 20xx investments (CSVLI) 13 20xy investments (CSVLI) 14 = Total long-term investments ($ 172 FINANCING SURPLUS (REQUIREMENT) $ 12 - 20xx notes payable bank short-term ($ 81) + 2Oxy notes payable bank short-term 68 + Short-term debt increase (decrease) ($ 13) + 20xy CMLTD $ 0 + 20xy long-term debt 58 - 20xx long-term debt 48) + Incremental long-term debt $ 10 - 20xx stockholders equity (excl. ret earnings) ($ 2) + 20xy stockholders equity (excl. ret. earnings) 2 + stockholders equity increase (decrease) $ 0 TOTAL EXTERNAL FINANCING ($ 3) CASH AFTER EXTERNAL FINANCING $ 9 ($ 16) $ 40 ($ 11) 0 ($ 11) $ 29 (80) $ 29 ($0) ($ 13) $ 49 (53) (S4) ($ 17) 14 (16) ($ 19) $ 10 ($ 68) 59 ($ 9) $ 0 67 (58) $ 9 ($ 2) 2 $ 0 $ 0 $ 10 20xz $918 $113 112 $_1 $919 ($631) $ 72 _67 $ 5 $ 31 46 ($ 15) ($641) ($228) $ 12 11 $_1 ($227) $ 5 ($ 0) $ 5 ($ 17) $ 7 6 $ 1 Dry Supply UCA Cash Flow Worksheet Dry Supply UCA Cash Flow Worksheet for 20x 15 In Soom) 20xy net sales $937 + 20xx accounts receivable $109 - 20xy accounts receivable 113 + Accounts receivable (increase) decrease {$_4) $933 =Cash from sales 20xy cost of goods sold (net of depreciation) (5667) +20xx inventory $ 73 - 20xy inventory 72 $ 1 + Inventory (increase) decrease 20xy accounts payable $ 46 20xx accounts payable 42 + Accounts payable increase (decrease) $ 4 = Cash production costs ($662) ($230) 20xy selling, gen. & admin exp. (net of deprec.) +20xy accrued expenses $ 11 20xx accrued expenses 10 + Accrued expenses increase (decrease) $ 1 =Cash operating expenses ($229) 20xy other income $ 5 20xy other expenses ($ 0) = Total miscellaneous $ 5 20xz income tax expense ($ 12) +20xy income taxes payable $ 6 20xx income taxes payable 5 + Income taxes payable increase (decrease) $ 1 = Cash paid for taxes ($ 11) NET CASH AFTER OPERATIONS $ 36 20xy interest expense ($ 7) 20xy dividends or distributions 0 = Financing costs ($ 7) = Net cash income $ 29 - 20xx CMLTD CASH AFTER DEBT AMORTIZATION $ 29 20xy depreciation expense ($ 12) + 20xx net fixed assets $ 45 20xy net fixed assets (49) + Other current assets (increase) decrease ($ 4) = Capital expenditures ($ 16) + 20xx investments (CSVLI) 13 20xy investments (CSVLI) 14 = Total long-term investments ($ 172 FINANCING SURPLUS (REQUIREMENT) $ 12 - 20xx notes payable bank short-term ($ 81) + 2Oxy notes payable bank short-term 68 + Short-term debt increase (decrease) ($ 13) + 20xy CMLTD $ 0 + 20xy long-term debt 58 - 20xx long-term debt 48) + Incremental long-term debt $ 10 - 20xx stockholders equity (excl. ret earnings) ($ 2) + 20xy stockholders equity (excl. ret. earnings) 2 + stockholders equity increase (decrease) $ 0 TOTAL EXTERNAL FINANCING ($ 3) CASH AFTER EXTERNAL FINANCING $ 9 ($ 16) $ 40 ($ 11) 0 ($ 11) $ 29 (80) $ 29 ($0) ($ 13) $ 49 (53) (S4) ($ 17) 14 (16) ($ 19) $ 10 ($ 68) 59 ($ 9) $ 0 67 (58) $ 9 ($ 2) 2 $ 0 $ 0 $ 10
