MBA 605 - Corporate Finance Chapter 27- Short Term Financial Planning Class Activities # 06 ID: Name: Q. 01: Sailboats Etc. is a retail company specializing in sailboats and other sailing-related equipment. The following table contains financial forecasts as well as current (month 0) working capital levels. During which months are the firm's seasonal working capital needs the greatest? When does it have surplus cash? Months ($ 000) 0 1 2 3 4 5 6 Net Income $ 10 $ 12 $ 15 $ 25 $ 30 $ 18 Depreciation 2 3 3 4 5 4 Capital Expenditure 0 0 1 0 0 Levels of Working Capital Accounts Receivable $ 2 3 4 5 7 10 6 Inventory - 3 2 4 5 5 4 2 Accounts Payable 2 2 2 2 2 2 2 Solution