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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)
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.
Month | |||||||
($000s) | 0 | 1 | 2 | 3 | 4 | 5 | 6 |
Net Income | 10 | 12 | 15 | 25 | 30 | 18 | |
Depreciation | 2 | 3 | 3 | 4 | 5 | 4 | |
Capital Expenditures | 1 | 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 |
During which month are the firms seasonal working capital needs the greatest?
When does the firm have surplus cash?
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