Question

Revise the pro forma financial statements for 1993 and 1994 assuming both of the following conditions:

(a). Short-term loans will be repaid when sufficient cash is available to do so without reducing the liquidity of the firm below the minimum requirements set by the bank and when the company is able to maintain at least the minimum cash balance (5 percent).

(b). Mark X will reinstate a 25 percent cash dividend in the year that all sort-term loans and credit lines have been fully cleaned up (paid in full).