The Team Assignment requires an analysis of specific financial data of Bob Smith Inc. Bob is an existing bank customer. When the loan to Bob was originally made in 2013 the bank required Bob to increase the YE 2014 cash balance to at least $70,000. The Cash Flow Statement and Balance Sheet show an actual YE 2014 cash balance of less than $34,000. The Team Assignment requires participation in a team effort to complete the (partially prepared) 2014 Cash Flow Statement. In Seminar 1 you discussed how to complete and use the 2014 Cash Flow Statement outcomes to explain how specific accounts influenced Bob’s low cash balances…in other words…some reasons why Bob has no cash! This information allows you to substantiate the 2015 loan denial. You are aware this action will create dire financial circumstances for Bob’s company. As the loan officer you Units 1-3 [MT480: Corporate Finance] must pass along the news in a business letter that is most professional and written in an objective manner. Please use values in the letter whenever possible.

ASSETS		2014		2013	Cash Up or Down
Cash and marketable securities	$	33,411	$	16,566	$ 16,845
Accounts receivable	$	260,205	$	318,768	$ 58,563	EXPLAIN
Inventory	$	423,819	$	352,740	$ (71,079)	EXPLAIN
Other current assets	$	41,251	$	29,912	$ (11,339)	The bank told Bob to increase cash to $70,000 from 2013 to 2014. But cash increased from $16,566 in 2013 to just $33,411 in 2014, well short of $70,000, ... why... Explain how the 58,563 and 71,079 highlighted accounts impacted cash flow from one year to the next. The accounts either added or reduced the cash balance from one year to the next. I.e., the accounts were either a Source or Use of cash.