Emerald City Umbrellas sells umbrellas and rain gear in Seattle, so its sales are fairly level across the year. However, it is branching out to other markets where it expects demand to be much more variable across the year. It expects sales in its new markets to be as follows.

	Q1	Q2	Q3	Q4
Sales	$19,750	$49,750	$10,500	$50,250

It carries inventory equal to

22%

of next quarter's sales, has accounts payable of

9%

of next quarter's sales, and has accounts receivable of

22%

of this quarter's sales.

a. Assume that it starts with

$4345

in inventory,

$1778

in accounts payable, and no accounts receivable for the new market. Forecast its working capital levels and changes over the four quarters.

b. If Emerald City Umbrellas has net income equal to

18%

of sales, what will be its financing needs over the next quarter?