For Q 1 refer to spreadsheet 1

Q1a:Discuss how the interest expense (row 25) calculation works and whether or not it includes theshort term borrowing on the Cartwright balance sheet. HINT: What is the source ofthe data used in the ratio on row 14?

Q1b:How much does Cartwright need to borrow and when? Explain by citing specifics from the forecast.

For Q2 refer to spreadsheet 2

Q2a:Explain how the p 45 table from the Cohen Finance Workbook, shown above starting on row 47, works and its significance to Cartwright's (and most other businesses too) external financing needs problem.

Q2b:Revise the short-form forecast model from Q1, using the 'input cells zeroed' model at the top of this tab.As the banker, assume a lower growth rate in sales, and explain, showing specifics from the revised forecast,how it helps Cartwright solve his external financing needed problem. Enter revised data in the blue cells, using your judgment.

Case Cartwright Lumber Company Learning Objectives Following the Wk1 assignment on financial ratio analysis of the historical financial statements and making a judgment about Cartwright's business, Wk2 forecasts the financial statements five years into the future so you can understand the relationship between sales growth and external financing needs (EFN Reading If your knowledge of accoounting terminology and ratios is sound, good. If not, re-read Chapters 1 & 2. Treat accounting as a foreign language that must be mastered; without it you understand little or nothing. Know Chapters 1 & 2 so you can refer to them when necessary. IT IS VITAL THAT YOU STUDY THE Wk1 SOLUTIONS TEMPLATE BEFORE PROCEEDING WITH THE Wk2 ASSIGNM The 4th & 5th tabs in this Excel file are the Wk1 Assignment Q1 & Q2 Solutions so you don't have to switch back Notice that the GRAY-colored part of the FLOW DIAGRAM is what you are learning about in Wks 1&2 Assignmen Chapter 3 discusses the Wk2 assignment, based on the short-form forecasting explained step-by-step beginning on page 33. Also, pay special attention to the discussion of: a circular reference beginning on page 41 b external financing needed beginning on page 42 c free cash flow definition on page 45 Questions 1 The short-form forecasting model (Q1 tab) shows 2003 as the base year (historical) and five forecast years, 2004 The forecast assumptions are entered for you in C4.G15. Show your understanding of the short-form forecasting model by answering the questions in the Q1 boxes. 2 Study the table on p 45 of the Cohen finance book and explanations on the pages following. Then, as the banker, explain to Mr. Cartwright why he must reduce his sales growth rate to reduce his external financing needs, supported by a revised forecast. The Q2 tab includes a working (with the formulas) version of the p 45 table and the short-form forecasting model with zeros in the assumption cells C4,G15, so you can forecast a scenario more to the banker's liking than the scenario in the Q1 & Q2 tab. THERE IS NO SINGLE CORRECT ANSWER TO THIS CASE. THE PURPOSE OF THE ASSIGNMENT IS TO LEARN THE PROCESS OF FINANCIAL STATEMENT ANALYSIS AND FORECASTING. PERFECTION IS NOT EXPECTED. THIS IS WORK-IN-PROCESS; NOT FINISHED PRODUCT...I.E., A LEARNING EXPERIENCE. BUT, YOU MUST MAKE A CLEAR RECOMMENDATION BASED ON THE RESULTS OF YOUR ANALYSIS. financial statements nancial statements five years wth and external financing needs (EFN). If not, re-read Chapters 1 & 2. you understand little or nothing. Know the content of ROCEEDING WITH THE Wk2 ASSIGNMENT. utions so you don't have to switch back-and-forth between two Excel files. learning about in Wks 1&2 Assignments. sting explained step-by-step historical) and five forecast years, 2004-08. ng the questions in the Q1 boxes. he pages following. es growth rate to reduce le and the short-form forecasting enario more to the banker's INCOME STATEMENT Revenue Cost of sales Gross profit Other operating income Other operating expenses Total cost and expenses Operating profit (EBIT) Interest, finance costs Profit before tax Income tax Net profit after tax Dividends Reinvested in the business BALANCE SHEET ASSETS LIABILITIES AND EQUITY Current assets Current liabilities Cash Trade payables Investments Other accruals Trade receivables Tax liabilities Inventories Short-term loans, leases Non-current assets Non-current liabilities Property, plant & equipment Loans, debt, leases due after 1 year Investment property Retirement benefit obligation Goodwill Deferred tax liabilities Total non-current liabilities WORKING CAPITAL spontaneous change with revenue ?what levels of ca, cl, s-t loans? CAPITAL BUDGETING ?what projects to accept? FINANCING ?what is the debt capacity? COST OF DEBT K-WACC Stockholder's equity (Net worth) Preferred stock Common stock Additional paid-in-capital Retained earnings OPERATING LEVERAGE FINANCIAL LEVERAGE Total assets Total liabilities & equity COST OF EQUITY VALUATION CASH FLOW COST OF CAPITAL ANALYSIS STEPS: FINANCING 1-HISTORICAL RATIOS 2-K-WACC HISTORICAL RATIOS I/S & B/S FORECAST 3-CAPITAL BUDGETING 4-FORECAST & EFN LONG-FORM FORECAST I/S, B/S, & RATIOS 5-EQUITY VALUATION 6-FINANCING CAPITAL BUDGETING OP & CAP NATCF, NPV, IRR, PAYBACK VALUATION ENTERPRISE VALUE USING FREE CASH FLOW MARKET MULTIPLES: P/E, MV/BV, REV, EBIT EFN DEBT EQUITY DEBT EQUITY EBIT CHART income K-WACC risk control mktblty flexblty timing A 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 Year Net Sales Growth rate in net sales Cost of goods soldet sales GS&A expenseset sales Long-term debt Current portion long-term debt Interest rate Tax rate Dividend/earnings after tax Current assetset sales Net fixed assets Current liabilities/ net sales Owner's equity (net worth) B C ENTER DATA IN BLUE-COLORED CELLS 2004 $2,694 2004 D E F G 2005 2006 2007 2008 33.6% 20% 20% 20% 20% 72.4% 72.4% 72.4% 72.4% 72.4% 24.4% 24.4% 24.4% 24.4% 24.4% $ 50 $ 43 $ 37 $ 30 $ 23 $ 7 ### $ 7 ### $ 7 8.0% 8.0% 8.0% 8.0% 8.0% 35.0% 35.0% 35.0% 35.0% 35.0% 0.0% 0.0% 0.0% 0.0% 0.0% 28.8% 28.8% 28.8% 28.8% 28.8% $ 157 $ 160 $ 163 $ 166 $ 168 11.2% 11.2% 11.2% 11.2% 11.2% $348 16 17 INCOME STATEMENT Year Net sales Cost of goods sold Gross profit GSA expense EBIT Interest expense Earnings before tax Tax Earnings after tax Dividends paid Additions to retained earnings Equations Forecast 2004 2004 2005 2006 2007 =B3+(B3*C4) $3,600 $4,320 $5,184 $6,220 =C5*C20 2,606 3,127 3,752 4,502 =C20-C21 994 1,193 1,432 1,718 =C6*C20 879 1,055 1,266 1,519 =C22-C23 115 138 165 199 =(C7+C8)*C9 5 4 4 3 =C24-C25 110 134 162 196 =C10*C26 39 47 57 68 =C26-C27 72 87 105 127 =C11*C28 0 0 0 0 =C28-C29 72 87 105 127 BALANCE SHEET Current assets Net fixed assets Total assets =C12*C20 =C13 =C33+C34 18 19 20 21 22 23 24 25 26 27 28 29 30 2008 $7,464 5,403 2,061 1,823 238 2 236 83 153 0 153 31 32 33 34 35 1,037 157 1,194 1,244 160 1,404 1,493 163 1,656 1,792 166 1,958 2,150 168 2,318 404 50 420 873 484 43 507 1,034 581 37 612 1,230 697 30 739 1,466 837 22 893 1,751 $321 $370 $426 $491 $567 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55 56 57 58 59 60 61 62 63 64 65 66 67 68 69 70 71 72 73 74 75 76 77 78 79 80 81 82 83 84 85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 100 101 102 103 104 105 106 107 Current liabilities =C14*C20 Long-term debt =C7 Equity =B15+C30 Total liabilities and =C37+C38+C3 shareholder's equity EXTERNAL FUNDING REQUIRED=C35-C40 Q1a Discuss how the interest expense (row 25) calculation works and whether or not it includes the short term borrowing on the Cartwright balance sheet. HINT: What is the source of the data used in the ratio on row 14? Q1b How much does Cartwright need to borrow and when? Explain by citing specifics from the forecast. Q1c Does Cartwright have the ability to pay the interest expense? Explain by citing specifics from the forecast. Q1d Does Cartwright have the ability to repay the loan principal? Explain by citing specifics from the forecast. H I J A 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 B C D ENTER DATA IN BLUE-COLORED CELLS Year Net Sales Growth rate in net sales Cost of goods soldet sales GS&A expenseset sales Long-term debt Current portion long-term debt Interest rate Tax rate Dividend/earnings after tax Current assetset sales Net fixed assets Current liabilities/ net sales Owner's equity (net worth) 2004 $2,694 2004 2005 E F G 2006 2007 2008 H I J K 0.0% 0% 0% 0% 0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% $ 50 $ 43 $ 37 $ 30 $ 23 $ 7 ### $ 7 $ 7 $ 7 0.0% 0.0% 0.0% 0.0% 0.0% 35.0% 35.0% 35.0% 35.0% 35.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% $ 157 $ 160 $ 163 $ 166 $ 168 0.0% 0.0% 0.0% 0.0% 0.0% $348 16 17 INCOME STATEMENT Year Net sales Cost of goods sold Gross profit GSA expense EBIT Interest expense Earnings before tax Tax Earnings after tax Dividends paid Additions to retained earnings Equations Forecast 2004 2004 2005 2006 2007 =B3+(B3*C4) $2,694 $2,694 $2,694 $2,694 =C5*C20 0 0 0 0 =C20-C21 2,694 2,694 2,694 2,694 =C6*C20 0 0 0 0 =C22-C23 2,694 2,694 2,694 2,694 =(C7+C8)*C9 0 0 0 0 =C24-C25 2,694 2,694 2,694 2,694 =C10*C26 943 943 943 943 =C26-C27 1,751 1,751 1,751 1,751 =C11*C28 0 0 0 0 =C28-C29 1,751 1,751 1,751 1,751 BALANCE SHEET Current assets Net fixed assets Total assets =C12*C20 =C13 =C33+C34 18 19 20 21 22 23 24 25 26 27 28 29 30 2008 $2,694 0 2,694 0 2,694 0 2,694 943 1,751 0 1,751 31 32 33 34 35 0 157 157 0 160 160 0 163 163 0 166 166 0 168 168 36 37 38 39 40 41 42 Current liabilities =C14*C20 0 0 0 0 0 Long-term debt =C7 50 43 37 30 22 Equity =B15+C30 2,099 3,850 5,601 7,352 9,104 Total liabilities and =C37+C38+C3 2,149 3,893 5,638 7,382 9,126 shareholder's equity EXTERNAL FUNDING REQUIRED=C35-C40 ($1,992) ($3,733) ($5,475) ($7,216) ($8,958) 43 44 45 46 FROM P 45 IN COHEN FINANCE WORKBOOK: 47 FOR EACH $1 CHANGE IN REVENUE: 48 Assumptions: 49 revenue 2694 1.6% 50 net profit margin 51 CHANGE IN ASSETS (USES OF FUNDS) 52 53 CURRENT ASSETS 54 55 cents RECEIVABLES INVENTORY 56 CA/SALES 57 58 FIXED ASSETS 59 60 61 62 FA/SALES 63 317 418 27.3 CHANGE IN LIABILITIES+EQUITY (SOURCES OF FUNDS) cents CURRENT LIABILITIES PAYABLES 256 OTHER ACC 39 CL/SALES 11.0 LONG-TERM DEBT PLANT PROPERTY EQUIPMENT 0 EQUITY INCR IN RET EARN/S 1.6 0.0 TOTAL FORECASTED SOURCES 12.6 EXTERNAL FINANCING NEEDED 14.7 67 TOTAL FORECASTED USES 27.3 ADJUSTED TOTAL FORECASTED 68 69 70 Q2a 71 Explain how the p 45 table from the Cohen Finance Workbook, shown above starting on row 47, works and its 72 significance to Cartwright's (and most other businesses too) external financing needs problem. 73 74 75 76 77 78 79 80 81 82 83 84 85 86 87 88 89 Q2b 90 Revise the short-form forecast model from Q1, using the 'input cells zeroed' model at the top of this tab. 91 As the banker, assume a lower growth rate in sales, and explain, showing specifics from the revised forecast, 92 how it helps Cartwright solve his external financing needed problem. Enter revised data in the blue cells, using your judgment. 93 94 95 96 97 98 99 100 101 102 103 104 105 106 107 108 109 110 111 112 27.3 64 65 66 Case Cartwright Lumber Company Learning Objectives Following the Wk1 assignment on financial ratio analysis of the historical financial statements and making a judgment about Cartwright's business, Wk2 forecasts the financial statements five years into the future so you can understand the relationship between sales growth and external financing needs (EFN Reading If your knowledge of accoounting terminology and ratios is sound, good. If not, re-read Chapters 1 & 2. Treat accounting as a foreign language that must be mastered; without it you understand little or nothing. Know Chapters 1 & 2 so you can refer to them when necessary. IT IS VITAL THAT YOU STUDY THE Wk1 SOLUTIONS TEMPLATE BEFORE PROCEEDING WITH THE Wk2 ASSIGNM The 4th & 5th tabs in this Excel file are the Wk1 Assignment Q1 & Q2 Solutions so you don't have to switch back Notice that the GRAY-colored part of the FLOW DIAGRAM is what you are learning about in Wks 1&2 Assignmen Chapter 3 discusses the Wk2 assignment, based on the short-form forecasting explained step-by-step beginning on page 33. Also, pay special attention to the discussion of: a circular reference beginning on page 41 b external financing needed beginning on page 42 c free cash flow definition on page 45 Questions 1 The short-form forecasting model (Q1 tab) shows 2003 as the base year (historical) and five forecast years, 2004 The forecast assumptions are entered for you in C4.G15. Show your understanding of the short-form forecasting model by answering the questions in the Q1 boxes. 2 Study the table on p 45 of the Cohen finance book and explanations on the pages following. Then, as the banker, explain to Mr. Cartwright why he must reduce his sales growth rate to reduce his external financing needs, supported by a revised forecast. The Q2 tab includes a working (with the formulas) version of the p 45 table and the short-form forecasting model with zeros in the assumption cells C4,G15, so you can forecast a scenario more to the banker's liking than the scenario in the Q1 & Q2 tab. THERE IS NO SINGLE CORRECT ANSWER TO THIS CASE. THE PURPOSE OF THE ASSIGNMENT IS TO LEARN THE PROCESS OF FINANCIAL STATEMENT ANALYSIS AND FORECASTING. PERFECTION IS NOT EXPECTED. THIS IS WORK-IN-PROCESS; NOT FINISHED PRODUCT...I.E., A LEARNING EXPERIENCE. BUT, YOU MUST MAKE A CLEAR RECOMMENDATION BASED ON THE RESULTS OF YOUR ANALYSIS. financial statements nancial statements five years wth and external financing needs (EFN). If not, re-read Chapters 1 & 2. you understand little or nothing. Know the content of ROCEEDING WITH THE Wk2 ASSIGNMENT. utions so you don't have to switch back-and-forth between two Excel files. learning about in Wks 1&2 Assignments. sting explained step-by-step historical) and five forecast years, 2004-08. ng the questions in the Q1 boxes. he pages following. es growth rate to reduce le and the short-form forecasting enario more to the banker's INCOME STATEMENT Revenue Cost of sales Gross profit Other operating income Other operating expenses Total cost and expenses Operating profit (EBIT) Interest, finance costs Profit before tax Income tax Net profit after tax Dividends Reinvested in the business BALANCE SHEET ASSETS LIABILITIES AND EQUITY Current assets Current liabilities Cash Trade payables Investments Other accruals Trade receivables Tax liabilities Inventories Short-term loans, leases Non-current assets Non-current liabilities Property, plant & equipment Loans, debt, leases due after 1 year Investment property Retirement benefit obligation Goodwill Deferred tax liabilities Total non-current liabilities WORKING CAPITAL spontaneous change with revenue ?what levels of ca, cl, s-t loans? CAPITAL BUDGETING ?what projects to accept? FINANCING ?what is the debt capacity? COST OF DEBT K-WACC Stockholder's equity (Net worth) Preferred stock Common stock Additional paid-in-capital Retained earnings OPERATING LEVERAGE FINANCIAL LEVERAGE Total assets Total liabilities & equity COST OF EQUITY VALUATION CASH FLOW COST OF CAPITAL ANALYSIS STEPS: FINANCING 1-HISTORICAL RATIOS 2-K-WACC HISTORICAL RATIOS I/S & B/S FORECAST 3-CAPITAL BUDGETING 4-FORECAST & EFN LONG-FORM FORECAST I/S, B/S, & RATIOS 5-EQUITY VALUATION 6-FINANCING CAPITAL BUDGETING OP & CAP NATCF, NPV, IRR, PAYBACK VALUATION ENTERPRISE VALUE USING FREE CASH FLOW MARKET MULTIPLES: P/E, MV/BV, REV, EBIT EFN DEBT EQUITY DEBT EQUITY EBIT CHART income K-WACC risk control mktblty flexblty timing A 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 Year Net Sales Growth rate in net sales Cost of goods soldet sales GS&A expenseset sales Long-term debt Current portion long-term debt Interest rate Tax rate Dividend/earnings after tax Current assetset sales Net fixed assets Current liabilities/ net sales Owner's equity (net worth) B C ENTER DATA IN BLUE-COLORED CELLS 2004 $2,694 2004 D E F G 2005 2006 2007 2008 33.6% 20% 20% 20% 20% 72.4% 72.4% 72.4% 72.4% 72.4% 24.4% 24.4% 24.4% 24.4% 24.4% $ 50 $ 43 $ 37 $ 30 $ 23 $ 7 ### $ 7 ### $ 7 8.0% 8.0% 8.0% 8.0% 8.0% 35.0% 35.0% 35.0% 35.0% 35.0% 0.0% 0.0% 0.0% 0.0% 0.0% 28.8% 28.8% 28.8% 28.8% 28.8% $ 157 $ 160 $ 163 $ 166 $ 168 11.2% 11.2% 11.2% 11.2% 11.2% $348 16 17 INCOME STATEMENT Year Net sales Cost of goods sold Gross profit GSA expense EBIT Interest expense Earnings before tax Tax Earnings after tax Dividends paid Additions to retained earnings Equations Forecast 2004 2004 2005 2006 2007 =B3+(B3*C4) $3,600 $4,320 $5,184 $6,220 =C5*C20 2,606 3,127 3,752 4,502 =C20-C21 994 1,193 1,432 1,718 =C6*C20 879 1,055 1,266 1,519 =C22-C23 115 138 165 199 =(C7+C8)*C9 5 4 4 3 =C24-C25 110 134 162 196 =C10*C26 39 47 57 68 =C26-C27 72 87 105 127 =C11*C28 0 0 0 0 =C28-C29 72 87 105 127 BALANCE SHEET Current assets Net fixed assets Total assets =C12*C20 =C13 =C33+C34 18 19 20 21 22 23 24 25 26 27 28 29 30 2008 $7,464 5,403 2,061 1,823 238 2 236 83 153 0 153 31 32 33 34 35 1,037 157 1,194 1,244 160 1,404 1,493 163 1,656 1,792 166 1,958 2,150 168 2,318 404 50 420 873 484 43 507 1,034 581 37 612 1,230 697 30 739 1,466 837 22 893 1,751 $321 $370 $426 $491 $567 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55 56 57 58 59 60 61 62 63 64 65 66 67 68 69 70 71 72 73 74 75 76 77 78 79 80 81 82 83 84 85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 100 101 102 103 104 105 106 107 Current liabilities =C14*C20 Long-term debt =C7 Equity =B15+C30 Total liabilities and =C37+C38+C3 shareholder's equity EXTERNAL FUNDING REQUIRED=C35-C40 Q1a Discuss how the interest expense (row 25) calculation works and whether or not it includes the short term borrowing on the Cartwright balance sheet. HINT: What is the source of the data used in the ratio on row 14? Q1b How much does Cartwright need to borrow and when? Explain by citing specifics from the forecast. Q1c Does Cartwright have the ability to pay the interest expense? Explain by citing specifics from the forecast. Q1d Does Cartwright have the ability to repay the loan principal? Explain by citing specifics from the forecast. H I J A 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 B C ENTER DATA IN BLUE-COLORED CELLS Year Net Sales Growth rate in net sales Cost of goods soldet sales GS&A expenseset sales Long-term debt Current portion long-term debt Interest rate Tax rate Dividend/earnings after tax Current assetset sales Net fixed assets Current liabilities/ net sales Owner's equity (net worth) 2004 $2,694 2004 D E F G 2005 2006 2007 2008 H I J K 0.0% 0% 0% 0% 0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% $ 50 $ 43 $ 37 $ 30 $ 23 $ 7 ### $ 7 $ 7 $ 7 0.0% 0.0% 0.0% 0.0% 0.0% 35.0% 35.0% 35.0% 35.0% 35.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% $ 157 $ 160 $ 163 $ 166 $ 168 0.0% 0.0% 0.0% 0.0% 0.0% $348 16 17 INCOME STATEMENT Year Net sales Cost of goods sold Gross profit GSA expense EBIT Interest expense Earnings before tax Tax Earnings after tax Dividends paid Additions to retained earnings Equations Forecast 2004 2004 2005 2006 2007 =B3+(B3*C4) $2,694 $2,694 $2,694 $2,694 =C5*C20 0 0 0 0 =C20-C21 2,694 2,694 2,694 2,694 =C6*C20 0 0 0 0 =C22-C23 2,694 2,694 2,694 2,694 =(C7+C8)*C9 0 0 0 0 =C24-C25 2,694 2,694 2,694 2,694 =C10*C26 943 943 943 943 =C26-C27 1,751 1,751 1,751 1,751 =C11*C28 0 0 0 0 =C28-C29 1,751 1,751 1,751 1,751 BALANCE SHEET Current assets Net fixed assets Total assets =C12*C20 =C13 =C33+C34 18 19 20 21 22 23 24 25 26 27 28 29 30 2008 $2,694 0 2,694 0 2,694 0 2,694 943 1,751 0 1,751 31 32 33 34 35 0 157 157 0 160 160 0 163 163 0 166 166 0 168 168 36 37 38 39 40 41 42 Current liabilities =C14*C20 0 0 0 0 0 Long-term debt =C7 50 43 37 30 22 Equity =B15+C30 2,099 3,850 5,601 7,352 9,104 Total liabilities and =C37+C38+C3 2,149 3,893 5,638 7,382 9,126 shareholder's equity EXTERNAL FUNDING REQUIRED=C35-C40 ($1,992) ($3,733) ($5,475) ($7,216) ($8,958) 43 44 45 46 FROM P 45 IN COHEN FINANCE WORKBOOK: 47 FOR EACH $1 CHANGE IN REVENUE: 48 Assumptions: 49 revenue 2694 1.6% 50 net profit margin 51 CHANGE IN ASSETS (USES OF FUNDS) 52 53 CURRENT ASSETS 54 55 cents RECEIVABLES INVENTORY 56 CA/SALES 57 58 FIXED ASSETS 59 60 61 62 FA/SALES 63 317 418 27.3 CHANGE IN LIABILITIES+EQUITY (SOURCES OF FUNDS) cents CURRENT LIABILITIES PAYABLES 256 OTHER ACC 39 CL/SALES 11.0 LONG-TERM DEBT PLANT PROPERTY EQUIPMENT 0 EQUITY INCR IN RET EARN/S 1.6 0.0 TOTAL FORECASTED SOURCES 12.6 EXTERNAL FINANCING NEEDED 14.7 67 TOTAL FORECASTED USES 27.3 ADJUSTED TOTAL FORECASTED 68 69 70 Q2a 71 Explain how the p 45 table from the Cohen Finance Workbook, shown above starting on row 47, works and its 72 significance to Cartwright's (and most other businesses too) external financing needs problem. 73 74 75 76 77 78 79 80 81 82 83 84 85 86 87 88 89 Q2b 90 Revise the short-form forecast model from Q1, using the 'input cells zeroed' model at the top of this tab. 91 As the banker, assume a lower growth rate in sales, and explain, showing specifics from the revised forecast, 92 how it helps Cartwright solve his external financing needed problem. Enter revised data in the blue cells, using your judgment. 93 94 95 96 97 98 99 100 101 102 103 104 105 106 107 108 109 110 111 112 27.3 64 65 66